Transcripts For CSPAN3 Global Energy Outlook 20180117 : vima

Next, a look at the Global Energy outlook with fatih birol. He testified before the Senate Energy and Natural Resources committee about issues including u. S. Oil and Gas Production. This runs an hour and 45 minutes. Good morning, efveryone. The committee will come to order. Id like to provide specific welcome this morning to our new member, senator smith. It is good to have you as part of the committee. I think you will find that this is a committee that does good work. We like to focus on policy and we like to do things in a bipartisan way every now and again. Looking forward to starting the new year off with that good foot. We dont have senator capito with us this morning but she is also returning to our committee and i look forward to welcoming her in her ongoing contributions. We do have a lot on the agenda today. Our broad bipartisan Energy Natural resources bill where again were looking forward to continuing that as the year progresses. Our efforts to increase our nations mineral security, our need for wildfire funding fix paired with for estry management reforms, Park Maintenance backlog, islands and territories. Weve got a wide range of public lands. Those are a few of the things that we have on deck for this new year. Were probably going to have a lighter attendance this morning. I think many members are still returning to washington ahead of this evenings vote, but i truly thank you, dr. Birol, for your attendance this morning. I think, as i mentioned to you, we look to the iea for its guidance, for its forecast, for better understanding of what is happening around the world. So you being here this morning to help set the stage for the year and provide your agencys perspective on the domestic and Global Energy outlook is greatly, greatly appreciated. The good work done by the iea helps to identify Market Trends and provides valuable information to guide policy decisions both here in the United States and around the world. Ieas insight and analysis helps us move our policies in the right direction. In turn, our work helps the iea with its core mission, promoting Energy Security, cooperation and stable markets. We cannot emphasize too strongly how significantly the role of the United States has evolved in recent years. As dr. Birol notes in his prepared statement, he says the United States has become the undisputed global oil and gas leader. During my time here on the committee both as Ranking Member and as chair, we have gone from discussing the needs to site lng import terminals all along our coasts to now expediting lng export terminals. Weve gone from lamenting our reliance on foreign oil and the steep price of that oil to the United States being the worlds swing producer in an era of abundant energy. 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 at the end of last year with the opening of alaskas 1002 area will provide for longterm security and allow us to expand our influence in world markets. At the same time, we know that these markets are cyclical and prices could rise substantially in the future if we do not take proactive steps to spur investment and supply. I know the iea has continued to conduct Significant Research on this matter and i look forward to delving deeper into that this morning. Although the iea was established on the premises of cooperative oil security, the agency has also evolved and expandsed its mission to cover a wide range of topics including Energy Efficiency, the digitalization of energy and one that im particularly interested in and thats the Cost Reduction in Renewable Technologies which portend major shifts in how we generate and use energy. Our committee has examined these topics largely through a domestic lens, so today we have the benefit, again, of an international perspective, a broader view that ties together world trends and events. We certainly look forward to it. So again, doctor, thank you for taking the time this morning to come and testify. We know that your schedule is very, very busy when you travel from paris, and we appreciate your willingness to share your expertise and the work of the iea with our committee. With that, i turn to senator can cantwell for her opening comments. I think i did suggest at one point in time that we visit dr. Birol instead. I so appreciate him being here today and the focus on increasing Energy Security for its member nations and i appreciate its continued focus on expanding the definition of Energy Security as well because Energy Security means more than just oil and gas flowing in and out and across borders. It also means protecting Critical Infrastructure from both physical attacks and the Cyber Security attacks that have been the subject of a lot of the past administrations focus on the review and what we need to do to upgrade that and upgrade the security of our nation. We must take action to protect our Critical Infrastructure from Cyber Security attacks and ensure the security of energy, our grid and Energy Networks are under constant cyber attack from 2012 to 2016, reported Cyber Incidents against u. S. Critical infrastructure more than doubled. Now that our vulnerabilities have been exposed by various attempts including russians to hack into our elegrid, we must e steps to protect our infrastructure. I very much appreciate the chair last year traveling to the Pacific Northwest to see the latest and greatest both technologies and approaches to Cyber Security and she and i have worked on legislation that we passed out of the United States senate. Were hopeful that some time our colleagues in the house will make this a priority and move forward on working on Cyber Security since its infrastructure is so important. Obviously diversifying our energy mix is another key part of the Energy Security puzzle and security means minimizing the financial consequences of Climate Impact which threatens our wellbeing at home and around the world, investing in Renewable Energies and moving away from fossil fuels and moving into Energy Efficiency and ways to help drive down costs. Weve seen great, great examples of a im forgetting the right terminology but the fact that the Energy Savings from Energy Efficiency is continuous flow of investment into business that makes them even more competitive which then allows them to stay ahead on a competitive basis. Those numbers on Energy Efficiency as we look at everything from the Bullet Foundation building to a focus on how to make more of these developments worldwide, very, very Exciting Technology that were very proud of from the Pacific Northwest. According to the ieas world Energy Outlook, Renewable Energy will make up twothirds of Global Investment in electy el. Energy efficiency is also a key on the Energy Security side and having the total energy use would have more than doubled according to iaea without Energy Efficiency so this has been saving us in so many ways. As you noted, i think its onethird the cost to develop a kilowatt than save. Its important that we continue that. While were discussing Energy Dominance and Energy Security i hope well hear a lot less about just these exporting issues, although we worked hard here on the committee to come up with strategies that clarify what our National Policies were on that and focus on what we can do to again drive the Cost Effectiveness of energy, whoever has the most Cost Effective Energy Solutions are going to continue to win in the marketplace. I look forward to hearing your comments on that today, and again, thank you for being here. Thank you, senator. Dr. Birol, welcome again to the committee. For those who are not familiar with dr. Birol, he took office as iea executive director in september of 2015 after 20 years with the agency itself. Previously dr. Birol held the position of chief economist with responsibility for directing the flagship world Energy Outlook publication. Hes been the founder and the chair of the iea Energy Business council. He has a whole series of accolades and awards that have been con fefred upon him over the years. Again, dr. Birol, we appreciate the insight that you will provide for us and the good work of your team at the International Energy agency. We welcome you and we invite your comments this morning. Typically we ask those who are testifying before the committee to try to limit their comments to five minutes, but because you are the sole panel before us, i welcome your extended remarks and well have an opportunity to query you with regards to other issues. So thank you, and good morning. Madam chair, Ranking Member cantwell, distinguished members of the committee, thank you very much for the opportunity to appear before you today and present the International Agencys remarks for globe at Energy Markets. I would like to wish everybody a happy new year. 2017 was a very successful year, a year of growth and continued success. One of the highlights of our successful year, 2017, was in november our ministers across the world came together to discuss the Global Energy issues, how they see the challenges in Different Countries and provided guidance to International Energy agency. I would like to thank the u. S. Government, especially secretary perry for his personal involvement. We have several businesses joining our meeting, at least part of it. Several ceos from the United States joined us, the ceo of exxonmobil and other ceos in Energy Renewable Companies Across the world and we had a wonderful meeting with a very good discussion and i would like to reflect some of the discussion to you today. Before going through some of our thoughts and findings, i would like to just very brief, if i may, madam chair, tell you what iea is all about. We were formed in 1974 in the wake of the oil crises basically by mr. Henry kissinger himself and several other statesmen across the world, and we are now 43 years old. The motivation was oil security, to look after the oil security issues, providing a mechanism across the world. Throughout these years our mandate has evolved, as madam chair mentioned. We look at the oil, gas, renewables, Energy Efficiency, environmental issues, investments and all the technologies. Iea is a unique organization which looks at all the technologi technologies for the markets and our wellbeing. We have several member governments in all the continents and energy is a very hot topic in many governments, many countries, so we tried to bring some factual information for the governments, the Decision Makers to discuss, debate, and come up with hopefully Good Solutions for their countries and for their citizens. To provide a basis for our discussion, i would like to tell you how we see the Global Energy markets in the next years to come. I will highlight four major trends which will affect all of us. I would like to say that countries, even the United States, one of the most Important Energy countries in the world, even the United States is not an energy island. What percentage of other countries affect everybody else. Four major trends, upheavals we call them, will affect all of us in the next years to come given the size of the changes and also the speed of those changes. It is important for all of us to take note of them. What are these four major upheavals which are going to transform our Energy Markets and some of the definitions, discussion we used to know but perhaps we need to change now. Number one, madam chair mentioned the United States is said to become the undisputed leader of oil and Gas Production for many years to come. This is number one. Number two, the cost of Renewable Energies are going down so significantly that they are becoming the first choice of power, new power plants in several countries across the world. These are not necessarily driven by Environmental Concerns but only for the cost concerns because they are becoming very cheap. When i say renewables, this is mainly solar and wind. This is number two. Number three, china. China recently changed its economic policy, moving from being an industrial workshop, work house, manufacturer, slowly but surely to a lighter economy and with the new model making the skies of china blue again, china is moving in the direction of clean energy which will help major implications for all of us given the sheer size of the china markets. This is gas, renewables, Nuclear Power and others. Fourth and last upheaval is that within the Energy System we use energy, the share of electricity is moving very strongly. Electric consumption is moving faster as our lives are becoming much more connected. So these are the four major upheavals that we see as very important. If i can integrate topics, and put the u. S. Into the end, starting with the Clean Energy Technologies. As senator cantwell mentioned, the cost fell down substantially. In the beginning, several countries subsidized, especially european countries, subsidized solar. But now, especially china, pushed solar and there is a concept in the economy learning by doing. The more you do something, the better you do it and the cheaper you do it and the cost of solar is not going to very low levels. The cost of wind is also going down, and in addition to industrial countries, major growth of renewables are coming from today emerging countries, especially china and india are the leaders. China is today number one country in terms of solar and number one country in terms of wind. When we look at the future, we see that the cost of solar and wind continue to decline and they are going to compete very soon with the traditional sources of electricity. This is something important and why china and others are pushing solar. It is not necessarily as some people may think for primary reason is not climate change. Primary reason is because it is cheap. The second is that another issue, especially in china and india, is the city local pollution in the cities. To reduce the local pollution, those countries are pushing solar and wind substantially and they are becoming cheaper and cheaper. We are seeing a big growth of solar and wind in the next years to come, and if i can give you one number, in 2016 of all the power plants in the world, solar alone was more than 50 . Other renewables plus coal, plus gas plus nuclear 50 . The other 50 , solar capacity alone. So this is something that we need to take into consideration. I should also mention that the renewable, especially solar and wind, also has a short coming, namely, they are very much tied to weather conditions. In india when the family comes home, the first thing they do is turn on the air conditioning, turn on the television when there is no sun. So it is difficult to it is not very easy, i should say, to match when theres sun and when the electionty is very high. But its coming stronger and cheaper. Another point on electricity, it is going very strongly everywhere. Electricity consumption grows two times faster than the Overall Energy consumption. Industrial processes are becoming more and more electrified and air conditioners are a major driver. This is important to note and therefore what kind of p