The United States has not only transformed nearly overnight from a net importer of oil and gas to achieving energy independence, but it is also about to be a leading exporter, says Fatih Birol, the Executive Director of the International Energy Agency (IEA).
“The U.S. is entering the second phase of the shale revolution,” Birol said during a panel at CERAWeek in Houston. The first revolution, he argued, was primarily focused on using domestic gas for domestic industry. The second phase will see the U.S. become an energy exporter, Birol said, overtaking Russia in about three years and Saudi Arabia in five.
According to the IEA’s annual oil markets report, released Monday during CERAWeek, the United States accounts for 70 percent of the total increase in global capacity through 2024 – an unprecedented growth from a nation that was just ten years ago a net importer of oil and gas.
But the growth seen in the U.S. is not being repeated abroad, said H.E. Mohammed Sanusi Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC).
“The shrinkage of investment in the last couple of years is still a huge challenge, because this rebound is only in the U.S. Outside of the U.S., we are only seeing a trickle of investment into the industry,” Barkindo said during the panel.
Barkindo argued for the Declaration of Cooperation, saying that there is a need for the 24 oil producing member countries to work together for long-term success, not as an organization, but as a platform or forum to build cooperation and synergy.
The world’s top two energy experts argued for strategic cooperation at an international level, discussed the rapidly changing geopolitical environments as a key risk for the sector and both hit on the importance of addressing climate change in a responsible way.
OPEC has specifically addressed climate change, and many OPEC countries have set ambitious targets to cut emissions, Barkindo said.
“Because we are also citizens of this world,” said Barkindo. “We have decided that we should stay together and that the rebalancing or balancing of the market continues to be a work in progress,” Barkindo added. “We, and more than several of our partners, are impacted by climate change and we have decided to be part of the solution.”
Still, Birol called the current climate targets set unrealistic, with most experts saying emissions need to be cut by 2020. In the 2019 report released yesterday, however, emissions were increasing.
“So what worries me in the climate change debate is there is a growing disconnect between those targets and what is happening in real life,” Birol said.