The US will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017, the West’s energy agency said, predicting Washington will come very close to achieving a previously unthinkable energy self-sufficiency.
The International Energy Agency (IEA) said it saw a continued fall in US oil imports with North America becoming a net oil exporter by around 2030 and the US becoming almost self-sufficient in energy by 2035.
“The US, which currently imports around 20 per cent of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy importing countries,” it said.
The forecasts by the IEA, which advises large industrialised nations on energy policy, were in sharp contrast to its previous reports, which saw Saudi Arabia remaining the top producer until 2035. “Energy developments in the US are profound and their effect will be felt well beyond North America – and the energy sector,” the IEA said in the annual long-term report, giving one of the most optimistic forecasts for US energy production growth to date.
“The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge,” it added. IEA Chief Economist Fatih Birol told a news conference in London he believed the US would overtake Russia as the biggest gas producer by a significant margin by 2015.
By 2017, it would become the world’s largest oil producer, he said. This could have significant geopolitical implications, if Washington feels its strategic interests are no longer as embedded in the Middle East and other volatile oil producing regions. Analysts ask whether an energy independent US would still be prepared to safeguard major trade routes around the world, such as the Strait of Hormuz in the Middle East.
The US will rely more on natural gas than either oil or coal by 2035 as cheap domestic supply boosts demand among industry and power generators, the IEA said. Birol said he realised how optimistic the IEA forecasts were given that the shale oil boom was a relatively new phenomenon.
“Light, tight oil resources are poorly known ... If no new resources are discovered (after 2020) and plus, if the prices are not as high as today, then we may see Saudi Arabia coming back and being the first producer again,” he said.
The IEA said it saw US oil production rising to 10 million barrels per day (bpd) by 2015 and 11.1 mbpd in 2020 before slipping to 9.2 mbpd by 2035. Saudi Arabian oil output would be 10.9 mbpd by 2015, the IEA said, 10.6 mbpd in 2020 but would rise to 12.3 mbpd by 2035.
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