IEA chief lines up with Trump on deregulation, fossil fuels

Source: Jenny Mandel, E&E News reporter • Posted: Monday, March 4, 2019

Deregulation of energy permitting and more support for carbon capture and nuclear power are needed to support U.S. energy and national security interests, the chief of the International Energy Agency told a Senate panel yesterday.

The policy recommendations outlined by IEA Executive Director Fatih Birol aligned with the Trump administration’s “energy dominance” platform, which argues for a continuing role for ascendant fossil energy and sweeping away barriers to production.

The Turkish economist’s broad argument — that the U.S. is and will continue to be a crucial global supplier of oil and gas — was anchored in both U.S. and global energy security concerns, while touching on some surprisingly domestic fights.

“We are aware that there are a lot of efforts now to enhance pipeline capacity, to bring oil to the international markets,” Birol told the Senate Energy and Natural Resources Committee.

“These efforts need to be, in our view, enhanced, and the bureaucratic hurdles in our view need to be softened, eased, in order to give licenses for those efforts,” he said, referencing permitting delays that discourage pipeline investors.

Birol expressed particular concern for populations in the northeastern U.S. where pipeline capacity limitations spur increased power pricing in cold winter weather.

“I don’t want to interfere in internal conversations, but not approving pipelines from A to B, economically to me, it doesn’t make any sense,” Birol said.

He added, “Economic facts are stubborn, and I believe at the end of the day those problems will be solved.”

A number of controversial pipeline projects have faced strong opposition and legal challenges that have slowed permitting in recent years, many of them centering on environmental concerns and property rights questions as infrastructure expands in areas where the oil and gas industry has grown rapidly (Energywire, Nov. 26, 2018).

President Trump has made a particular effort to support nuclear and coal-fired power plants, tracing the latter to the power of his electoral base in traditional mining states like West Virginia and Pennsylvania.

The IEA chief concurred with the importance of those efforts.

“I believe carbon capture and sequestration is the most critical technology if we want to find a peaceful marriage” between the climate problem and our global fossil fuel industry, he told lawmakers.

He described as “very worrying” a spate of recent advocacy for policies that seek to cut carbon emissions immediately, noting that the world is not in a position to pick only its favorite technologies.

On nuclear energy, he warned the U.S. was on the cusp of giving up its global technological leadership.

“If we don’t change our policies as far as nuclear energy is concerned, our numbers show that in less than 10 years’ time, China will overtake the United States as the No. 1 nuclear power in the world,” Birol said.

‘A sweet problem’

Birol’s testimony was based in part on IEA’s World Energy Outlook, which was published last November and called for increasing conventional oil investments to support growing world demand for fuel to feed growing aviation, trucking and petrochemical demand in the developing world, among other policies (Energywire, Nov. 13, 2018).

IEA projected that the U.S. would account for some 70 percent of world oil production growth through 2025, compensating for supply drops from Venezuela and Iran and playing a crucial role in steadying world crude prices.

“Geopolitical tensions are everywhere, and as such we think that supply disruptions are a very important area that we need to pay attention to,” Birol testified.

He warned that the strategic oil reserves of IEA members like the U.S. are an important part of maintaining market stability.

Congress has passed several measures over the past few years that rely on oil sales from the Strategic Petroleum Reserve to balance spending on both SPR modernization and other priorities. Yesterday, Trump authorized another such sale of up to 6 million barrels of crude to be delivered in May, expected to raise about $300 million for SPR modernization.

IEA’s analysis shows natural gas and the growth of a global liquefied natural gas market as a good sign for energy accessibility and carbon emissions in the fast-growing Asian markets.

But he pointed to permitting trouble for American LNG export facilities as a potential barrier to the U.S. achieving its full potential in the market.

Asked by North Dakota Republican Sen. John Hoeven how to get new LNG plants built, Birol said the approval process was too slow.

“Many countries would consider this a sweet problem,” he said of the challenge of handling gas that comes out of the ground as a byproduct of North Dakota oil production.

“Many countries are dying for natural gas. You have it but aren’t able to export it.”