IEA finds US energy policy improved in latest in-depth review

US energy policies have come into sharper focus in the last six years, the International Energy Agency said in its latest periodic review. It specifically cited the US Department of Energy’s establishment of a Quadrennial Energy Review and US President Barack Obama’s strategy to address climate change as major steps since 2008.

“Six years ago, we said the United States needed a more consistent national energy policy,” IEA Executive Director Maria van der Hoeven said during a Dec. 18 briefing on the review at the Bipartisan Policy Council. “The [QER] and climate change policies addressed these concerns.”

Energy Policies of IEA Countries – The United States (2014 Review)” also acknowledged that the US oil and gas renaissance, driven by strong unconventional production growth, has substantially contributed to domestic economic growth and improved the nation’s ability to compete globally.

Significantly increased US oil and gas production also has raised environmental and safety concerns that need to be addressed, it added. The report’s recommendations were mainly directed toward developing demand-side measures and energy efficiency policies, particularly for transportation and building construction, and fiscal incentives to increase investor confidence in renewable technologies.

No carbon capture and storage regulatory system exists, making federal direction essential, and cybersecurity is a growing concern, van der Hoeven said. “System resiliency has become a greater priority, but we must increase public and private efforts,” she said. “I look forward to seeing similar, if greater, progress after another six years.”

US Energy Secretary Ernest G. Moniz, who also participated in the briefing, said the Obama administration’s all-of-the-above energy policy includes making investments to ensure clean energy technologies are developed and deployed.

Addressing energy security

“Clearly stimulated by the Ukraine-Russia situation, the G-7 nations and IEA rapidly concluded that energy security is a collective responsibility,” he said. “The energy insecurity of any of our allies and friends is of concern to us. It clearly involves diversification of supplies and routes.”

Developing transparent markets also is important, as are climate change, infrastructure resilience, and moving toward cleaner alternatives, Moniz said.

Noting that the IEA is encouraging more integrated natural gas markets globally, he said his Dec. 15 meeting with Mexican Energy Secretary Pedro Joaquin Coldwell and Canadian Natural Resources Minister Greg Rickford produced a memorandum of understanding to integrate data across the three countries, led by the US Energy Information Administration.

Moniz said the three countries’ officials also agreed to work more closely on cross-border emergency response measures since some crews from Canada trying to provide help following Superstorm Sandy in 2012 were turned back at the US Border.

The trio also pledged to cooperate in developing responsible and sustainable best practices for unconventional oil and gas development, and a modern and resilient North American energy infrastructure not just physically, but in policies, regulations, innovation, and workforce development.

Joaquin Coldwell was particularly interested in developing a bigger energy workforce in his country, Moniz said at the BPC’s briefing. “With Mexico’s very impressive reform, we expect things to get much more interesting,” Moniz said. “Reform is critical to improving the investment climate there.”

QER activities

He said one of the QER’s goals is to integrate energy concerns of agencies across the federal government so they can be addressed more efficiently. “That’s pretty much every one of them,” he added. “We have no reason to oppose making a four-year process a series of one-year processes.”

The first, which is due to issue a report in January, will deal with transmission infrastructure, Moniz said. “One early finding is that associated systems, mainly rail and water, matter more than we originally thought,” he said. “Another is that the natural gas system is in much better shape than we expected, although there are regional problems.”

Van der Hoeven suggested that falling crude oil prices could make some projects marginal if they continue to drop. They also could increase global gas prices since many of those contracts remain indexed to crude prices, she said.

“Low oil prices are a given at the moment,” the IEA official observed. “They might help producing countries recover their economic positions. But they also are an opportunity for consuming countries to get rid of fossil fuel subsidies, put a price on carbon, and improve energy efficiency.”

Moniz said low crude prices are a boon for US consumers as well as the economy. “There’s been a big jump in job creation in the last month,” he said. “But we’re still committed to a low-carbon future. We must not take our eyes off the ball. We must reduce our oil import dependence by developing new technologies for cleaner alternatives.

“It’s not just about oil and gas price being low, but driving down the cost of these alternatives,” Moniz continued. “We must not neglect deployment. Our loan program is our marquee commitment. It’s a highly successful portfolio that’s getting clean energy out there big-time.”

Contact Nick Snow at nicks@pennwell.com.

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