The head of the International Energy Agency said the shale revolution has made the U.S. the world's “undisputed” oil and natural gas leader, as he visited Capitol Hill Tuesday morning to discuss how the world energy system is changing.
“What we see is a result of the shale revolution," International Energy Agency chief Fatih Birol told the Senate Energy and Resources Committee. "The U.S. is becoming the undisputed leader of oil and gas production worldwide.”
Birol was in Washington to discuss the international agency's global assessment and energy projections into the next decade. The U.S. is a IEA member state and a contributor to the international energy body.
"Oil production is growing very strongly and will continue to grow," Birol said. "We think that this growth is unprecedented," both in the "size of the growth and the pace of the growth.”
He said the increases in the U.S. reminded him of Saudi Arabia’s meteoric rise nearly 50 years ago. "We have seen such a big growth in the history of oil only once, four and a half decades ago when Saudi Arabia expanded their very famous Ghawar oil field," Birol said. "It is the biggest oil field in the world.”
The agency has a similar outlook for natural gas. The U.S. will be the “largest” exporter of liquefied natural gas in the world in the 2020s, which is “good news” for the U.S. economy, as American's energy leadership will continue for decades, he said.
The U.S.’s biggest customer for natural gas will be China, as a result of America’s energy development.
Birol said half of all the coal in the world is consumed by China, but the country is phasing out its coal plants in the next decade as it transitions to more renewables. That means China will be using more natural gas during the transition, so demand from Asia for U.S. energy will surge, Birol said.
At the same time, Birol told senators that China’s demand for new energy resources will put the U.S. in the back seat for nuclear energy.
China will be “No. 1” and the U.S. “No. 2” on nuclear power “if policies don’t change,” Birol said. The U.S. has the largest fleet of 99 nuclear power plant reactors in the world, but one-third of all new nuclear development is happening in China.
"In 10 years of time, Chinese nuclear capacity will overtake the United States," Birol said.
The cost of renewables will continue to drop, making solar and wind move from what he called an aspiring “romantic fuel” for electricity, to a “mainstream fuel." That means that solar and wind will no longer require subsidies, he added.
Birol said renewable energy will not need government subsidies in as little as five years in some countries.