The US approach to energy policy seeks to maximise the benefits of energy abundance and to push the country to be a global leader in energy technologies.
The effects of the US shale revolution have had far-reaching implications on the country’s energy landscape and has reshaped its approach to energy policy from a ‘mind set of scarcity to one seeking to maximise the benefits of energy abundance’, according to the International Energy Agency’s (IEA) in-depth review of US energy policies.
As a result of the shale boom, the US is now the world’s top oil and gas producer and a leading exporter for the fuels. Continued innovation in oil and gas extraction through additional refinements in horizontal drilling along with hydraulic fracturing has made oil and gas production a ‘mainstay of the US energy landscape and the world’, the review notes.
In just 10 years, domestic oil production increased by a considerable 124% driven by light tight oil production from shale formations.
In its review, the IEA notes that the country is poised for further production growth over the coming years, which places greater emphasis on the buildout of supporting infrastructure in order to maximise the benefits of shale. Future production growth and exports will depend on the buildout of complementary oil and gas pipelines. Despite efforts to streamline federal licensing for energy infrastructure, midstream infrastructure is still outpaced by shale production growth.
The review says that the country’s growing energy exports are playing an important role in diversifying global energy supplies and help mitigate the potential impact of disruption events.
As a result of this seismic energy shift, the country’s approach to energy policy has also changed. Current policy focuses on energy dominance, which reflects a strategy to maximise energy production, benefit from larger energy exports and be a global leader in energy technologies.
Fatih Birol, the IEA’s executive director, says: ‘Since the last in-depth review five years ago, the US 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 Birol adds: ‘The US is a cornerstone of global energy security and will play a critical role in any future IEA collective responses.’