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IEA: US shale revolution has reshaped the energy landscape at home and abroad

The International Energy Agency (IEA) has released its latest in-depth review of US energy policies, welcoming US leadership on innovation and highlighting the far-reaching impact of the country’s shale revolution.

The shale boom has transformed the United States into the world’s top oil and gas producer and a leading exporter for the fuels. As a result, the US approach to energy policy making has shifted from a mind-set of scarcity to one seeking to maximise the benefits of energy abundance, according to the report. US government policy reflects a strategy to boost energy production, benefit from greater energy exports, be a global leader in energy technologies and keep consumer energy bills in check.

A central plank of the strategy is to reduce regulatory hurdles to expanding US energy production and increasing the competitiveness of the US energy industry. While emissions are expected to continue to decline over the coming decade, the IEA report encourages a strengthening of this trend. Nuclear plant retirements, as well as less stringent emissions regulations, risk offsetting gains from the move towards natural gas and renewables for electricity generation.

Since the last in-depth review five years ago, the United States has reshaped energy markets both domestically and around the world. In this context, the IEA commends the lifting of the US ban on crude oil exports as well as efforts to streamline regulatory approvals for LNG exports, which have helped bolster global energy security by diversifying supply options for importers.

—Dr Fatih Birol, the IEA’s Executive Director

The IEA report notes that future production growth and exports will depend on the complementary buildout of oil and gas pipelines. Though the government has made efforts to streamline federal licensing for energy infrastructure, there remain cases of midstream infrastructure struggling to keep pace with shale production growth. Timely siting of gas pipelines will also help efforts to reduce gas-flaring rates from oil production.

The abundance of low-cost natural gas has resulted in gas-fired generation overtaking coal-fired generation in the power sector. At the same time, falling costs and policy support for renewable power have motivated a surge in wind and solar generation capacity. Consequently, coal and nuclear plants—which have long underpinned US electricity markets —are facing closures. The IEA recommends policy and regulatory responses to ensure a smooth transition in the electricity sector that fully leverages the growth in variable renewables while also ensuring the overall power system remains reliable and resilient.

The IEA report notes the continued priority the United States places on energy security and the protection of its energy infrastructure. It applauds steps taken by the government to update its security frameworks, including by introducing processes to address new trends such as cyberthreats.

Moreover, as the shale revolution tips the United States into becoming a net oil exporter, continued careful consideration is required when examining proposals to modernize and sell down the US Strategic Petroleum Reserve.

Comments

SJC

net oil exporter...
Where do you get that?
We still import 10 million barrels per day, 2 million from the Saudis.

gryf

According to U.S. Energy Information Administration (EIA) the U.S. imports 2.34 million barrels of oil per day (in 2009 the number was 10 million barrels per day). Saudi Arabia accounts for 897 thousand barrels per day and OPEC makes up 2.571 million barrels per day. The U.S. exports to Non-OPEC countries a net of 231 thousand barrels per day.

gryf

Actually those are 2018 numbers. For the month of June-2019, OPEC was 1.518 million barrels per day (Saudi Arabia accounted for 570k barrels per day of that number) and the U.S. exported 1.012 million barrels per day to Non-OPEC countries. For August-2019, this number looks like it is going down further. This also does not include Natural Gas Liquids where the U.S. is a major exporter.

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