Engineering Inc. - May/June 2019 - 10

THE PRIVATESIDE

U.S. Energy Growth to Continue with a
'Second Wave' of the Shale Revolution Coming
By Erin McLaughlin

"Satisfying
expected
gas demand
growth in Asia
would require
additional
supply equal
to building one
new average
size U.S. liquid
natural gas
project every
five months."
DR. FATIH BIROL
EXECUTIVE
DIRECTOR
INTERNATIONAL
ENERGY AGENCY

ENGINEERING INC.

emarking that "no country is an energy
island," Dr. Fatih Birol, executive
director of the International Energy
Agency (IEA) made his third annual
visit to the U.S. Senate Energy and
Natural Resources Committee in February, sharing
his outlook for global energy markets, including an
emphasis on the United States' role as worldwide
energy leader and No. 1 exporter.
Birol, considered the world's leading energy
economist and expert, is chairman of the World
Economic Forum's (Davos) Energy Advisory Board
and a member of the U.N. Secretary-General's
High-level Group on Sustainable Energy for All.
According to IEA, the U.S. is on the path to
become a net petroleum exporter by 2021. Last
year, the U.S. surpassed Russia and Saudi Arabia to
become the world's largest producer of crude oil.
The global demand for energy is not slowing down
and is expected to grow 25 percent by 2040, largely
due to urbanization and industrial development
in Asia.
"Satisfying expected gas demand growth in Asia
would require additional supply equal to building
one new average size U.S. liquid natural gas project
every five months," says Birol.
Although some personal vehicles are transitioning
to electricity as a main power source, passenger cars
only make up 18 percent of demand worldwide.
The market to fuel aviation, commercial trucks and
the petrochemical industry continues to grow, and
oil is likely to maintain its position as the dominant
energy source.
Besides the continued strength of the oil market,
there were several key takeaways from Birol's outlook.

MAY / JUNE 2019

A SECOND SHALE REVOLUTION

Natural gas and shale oil markets continue to grow "very,
very strongly," according to Birol. The markets will be
driven largely by demand from China, which is the largest
gas importer in the world, particularly liquid natural gas.
"The importance of the U.S. shale industry for the
global economy cannot be overemphasized," says Birol.
IEA forecasts 70 percent of the growth in world oil production to 2025 will come from the U.S. Birol explained that
the first wave of the shale revolution was largely for U.S.
consumption, resulting in needing less imports; the second
wave will be primarily about growth in exports for worldwide consumption. According to IEA, in 2018 U.S. shale
production grew faster than during the boom years of 2011
to 2014.
GEOPOLITICAL TENSIONS AND
NATURAL DISASTERS

Birol expressed concerns about geopolitical tensions that
may be connected to key energy countries including Russia, Iran, Venezuela, China, and the United Kingdom as
it figures out its Brexit. The other leading concern is the
growing occurrence of hurricanes in the U.S.
RENEWABLES CONTINUE TO GROW

Wind and solar energy infrastructure are continuing to
grow on a global basis, largely because related technologies are becoming cheaper, and governments are still
subsidizing advancement of these sources. Currently,
wind and solar provide only 6 percent of global power
generation. However, over the next two decades, they will
account for half of the growth in electricity generation,
according to IEA. The transmission network of renewable
energy is getting much-needed attention, and a focus on
bottlenecks related to energy storage should be next.

Engineering Inc. - May/June 2019

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