Senate panel explores sources of ‘upheaval’ in domestic, global energy markets

Disruption in global energy markets, advancements in energy technologies and changes to U.S. energy policy highlighted a Senate Energy and Natural Resources Committee oversight hearing that explored the domestic and global energy outlook on Tuesday.

Fatih Birol, the executive director of the International Energy Agency, testified about areas of “upheaval” in global energy markets. He identified the United States’ emergence as a leader in gas and oil production, renewable energies becoming more affordable, China’s emphasis on clean energy, and more reliance on electricity as four main points of disruption.

“We have huge deposits of oil and gas in the Arctic region across the world,” Birol said. “In terms of oil, according to the U.S. Geological Survey, we have huge deposits, especially in the Arctic National Wildlife Refuge area. We see there is a very important attractiveness there, namely the availability of the Trans-Alaska Pipeline, which is underutilized today substantially.”      

Birol also noted that the United States’ geographical advantage creates significant marketing opportunities for oil and liquified natural gas (LNG) exports, particularly to Asia.

“China is moving in the direction of gas. They are going to import a lot of LNG to replace their coal,” Birol said. “From the LNG point of view, I see significant chances to provide gas to gas-hungry Asia.”   

U.S. Sen. Lisa Murkowski (R-AK), the chairwoman of the committee, highlighted recent efforts to help build those markets, including expediting LNG export terminals along the coasts.

“And we have gone from lamenting our reliance on foreign oil, and the steep price of that oil, to the United States being the world’s swing producer in an era of abundant energy,” Murkowski said. “Technology innovation and the shale revolution have led the way, and the administration is working hard to reduce barriers to energy development. Allowing for increased exploration and production in the United States — as we did last year with the opening of Alaska’s 1002 Area — will provide for our long-term security and allow us to extend our influence in world markets.”

The panel also explored how advanced nuclear and other emerging technologies could impact U.S. energy markets in the near future. Birol testified that nuclear technology is “worthwhile”  — but added that many countries could find building nuclear power plants a challenge in the wake of Fukushima.

“…Small modular reactors can provide the opportunity to address the project management risks and the financing problems, so this can be a solution,” Birol said. “In the U.S. and countries where it is accepted, (nuclear) can play an important role for energy security and also for the environmental issues (it) can make a positive contribution.”