The United States is poised to become the world’s largest oil producer by 2020 thanks to increased output of new exploration technologies such as fracking. But what does this mean for politics?
The World Energy Outlook 2012 released by the Paris-based International Energy Agency (IEA) predicts that America will surpass Russia and Saudi Arabia as the world’s top oil producer by 2017, becoming a net oil exporter by around 2030. The US currently imports around 20 percent of its energy needs. The IEA Chief Economist Fatih Birol told a news conference in London that rising energy efficiency and increased production will enable the US to achieve previously unthinkable energy self-reliance by 2035, with increased reliance on natural gas as cheap domestic supplies boost demand.
According to CBS News, the report says rebounding US oil and gas production and increasing light tight oil and shale gas resources are “steadily changing the role of North America in global energy trade,” speeding up redirection of international oil trade from the Middle East toward Asia.
Birol said he realized how optimistic the IEA forecasts were given that the shale oil boom was a relatively new phenomenon. “If no resources are discovered {after 2020}, then we may see Saudi Arabia coming back and being the first producer again,” he said.
A record amount of oil is flowing out of 200 new wells in western North Dakota: the state is producing 500,000 barrels of oil a day, moving them into second place behind Texas among oil-producing American states. Producers have invested $3 billion in natural gas pipelines, $1 billion in oil pipelines, and more than $1 billion a month drilling new oil wells in the past two years, according to North Dakota Petroleum Council President Ron Ness. Environmentally controversial fracking is a critical part of recovering oil in North Dakota.
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The forecasts by the energy watchdog are a reversal of its prior predictions of Saudi remaining top producer until 2035.
“Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector,” claimed the IEA annual report, giving one of the most optimistic forecasts for US energy production growth to date.
This could have significant geopolitical implications. Analysts ask whether an energy independent US would still undertake to safeguard major trade routes around the world, such as the Middle East’s Strait of Hormuz, where the US had deployed mine-detecting dolphins that we reported on earlier.
Not everyone is convinced that the future is rosy. On his website Early Warning, Physicist Stuart Staniford blogged, “I am less persuaded myself that using a thousand oil rigs to generate an extra one million barrels per day of oil is necessarily a sign of a large and long-term sustainable increase in US oil production (as opposed to, say, frenzied scraping of the bottom of the barrel). But, still, I’m not certain beyond a reasonable doubt just how deep this particular barrel can be scraped.”
The report does emphasis that renewables will be an integral part of the global energy mix, accounting for nearly one third of electricity production by 2035.
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