To hear him tell it, the chief economist for the International Energy Agency (IEA) believes the U.S. has a proverbial foot across the throats of our friends in Europe and Japan. Simply, the tremendous economic advantage gained by the U.S. from its vast resources of cheap natural gas could throw gas-supply-challenged industrialized countries—still trying to regain footing following the global financial crisis—into economic tailspins. And America should weigh carefully how it wields that advantage.

“While the shale gas revolution puts the United States at an economic advantage, it will have global consequences elsewhere,” warned Dr. Fatih Birol, the Turkish-born spokesman for the Paris-based think tank that takes a worldview of energy issues.

Presenting findings from the IEA’s “World Energy Outlook 2013” report, published in October, Birol spoke to a U.S. audience in February at Rice University’s Baker Institute for Public Policy in Houston.

“The shale revolution is redefining the economic competitiveness of countries, especially when it comes to energy-intensive industries. Today we see a major disparity between the U.S. and the rest of the world.”

Before shale gas flooded the U.S. market, undercutting prices, natural gas prices between various regions of the world were more or less the same, he noted. Today, however, natural gas prices in Europe are three times higher than in the U.S., at $10 to $15 per million British thermal units, and five times higher in Asia, spiking above $20 in February. Unconventional gas production, he said, will create a price differential between the U.S. and its economic competitors for the next 20 years in electricity affordability and manufacturing competitiveness.

“I do not know any other commodity valued at such major price differentials. This is obviously good news for the U.S., but it is very bad news for Europe and Japan. This is a major issue.”

European consumers and industry will feel the impact in higher electricity prices. The Brits already saw a 10% leap in electricity prices last year, on top of a doubling in the past decade. Adding to the impact, Germany and Spain have shunned nuclear power following Japan’s Fukushima disaster. And the Japanese pay four times the electricity bill of what Americans pay, as the country struggles to address its nuclear power generation strategy.

More significantly, energy-intensive industries outside of the U.S., such as petrochemicals, aluminum, iron, steel, cement and paper—in which energy accounts for 30% to 70% of manufacturing costs—will feel the brunt of higher imported gas prices.

“These sectors are sensitive to energy prices,” Birol said. “They are a major source of employment and provide a major part of the economic output—about 30%—for Europe and Japan.”

He anticipates European Union exports of energy-intensive goods to drop by 10%, and by 3% from Japan. Alternately, exports by U.S. and other growing, energy-consuming economies including China, the Middle East and India, to tick up 1% to 3%.

“We see a strong comeback in the U.S. economy by 2015 based on manufacturing and balance of trade,” he said. But, “the alarm bells are ringing for Europe and elsewhere. These sectors are crucial—they make up 25% of industrial employment.”

The plight of higher gas prices is one of life or death for many countries, Birol said; many are sitting on a financial brink, and energy prices could tip them over the edge.

Birol said he is often questioned by Europeans as to why Americans will not openly export natural gas to the continent, with the expectation that doing so would bring parity to world natural gas prices similar to oil prices, thus closing the competitive gap. But that idea is just a wish, he said, even if the U.S. exports large volumes of natural gas.

The reason? Shipping natural gas is seven times more expensive than shipping oil, based on the cost of liquefaction, shipping and gasification, which adds about $6 to the price. Natural gas in the U.K. currently trades near $11 per MMBtu. Assuming a $4 Henry Hub base price in the U.S., the difference is negligible to European buyers, although Asian markets could experience a $2 or so discount.

“To think Europeans can have $4 gas like in the U.S. is impossible. The differential may narrow a bit, but for many years to come, Europe and Asia will remain much higher gas-cost regions than the U.S.”

Birol implored the U.S. to tread carefully in how it handles this anticipated two-decade window of economic advantage due to its gas leverage vs. the world. “A lot of European countries are facing foreclosure. This is a time that will need to be viewed carefully by the U.S.”