By GRANT SMITH
The US will be close to energy self-sufficiency in the next
two decades as booming output from shale formations puts it
on course to be the worlds largest oil producer, the
International Energy Agency said.
Crude prices will advance to $128/bbl by 2035 with a 16%
increase in consumption, supporting the development of
so-called tight oil in the US and a tripling in output from
Brazil, the IEA said Tuesday in its annual World Energy
The role of the Organization of Petroleum Exporting Countries
will recover in the middle of the next decade as other
nations struggle to repeat North Americas success with
exploiting shale deposits, the agency predicted.
The United States moves steadily towards meeting all of
its energy needs from domestic resources by 2035, the
Paris- based adviser to 28 energy-consuming nations said.
But this does not mean that the world is on the cusp of
a new era of oil abundance. Light, tight oil shakes the next
10 years, but leaves the longer term unstirred.
Soaring shale output in the US is helping the worlds
largest oil consumer achieve its highest level of energy
independence in two decades, cushioning it against
disruptions in Africa and the Middle East. The boom threatens
revenues for OPECs 12 members, whose production is at
its lowest in two years amid political unrest in Libya and
theft in Nigeria.
The US is overtaking Russia and Saudi Arabia to become the
worlds biggest oil producer, as it taps rock and shale
layers in North Dakota and Texas with the use of horizontal
drilling and hydraulic fracturing, according to the report.
The IEA predicted in last years World Energy Outlook
that US output would exceed Saudi Arabia toward the end of
US crude production rose to 7.896 million bpd in the week
ended Oct. 18, the most since March 1989, according to the
Energy Information Administration. West Texas Intermediate
futures slid one cent last week to cap a fifth weekly decline
at $94.60/bbl on Nov. 8.
Global oil demand will expand by 14 million bbl to average
101 million bpd in 2035, according to the IEA report. The
share of conventional crude will drop to 65 million bbl by
the end of the period because of growth in unconventional
supplies, the IEA said without providing current data.
The concentration in global oil trade will continue to shift
to the Asia-Pacific from the Atlantic Basin, as China is on
the verge of becoming the worlds biggest oil importer,
the report showed. India
will displace China as the
biggest driver of energy demand growth after 2020, the IEA
capacity in Asia and the
Middle East along with reduced demand in many developed
nations is intensifying the pressure for plants to close, the
The IEA estimates that almost 10 million bpd of oil
processing capacity is at risk by 2035, with
refineries in Europe
in particular the most
vulnerable, it said. This equates to about 10% of current
global capacity, based on data compiled by Bloomberg on more
than 700 sites worldwide.
Brazil will triple output to 6 million bpd by 2035 as it
exploits deep-water reserves, an expansion
that will account for
one-third of the increase in global production and make the
nation the worlds sixth-largest oil producer, according
to the agency.
While North American shale, coupled with rising production in
Brazil and global supplies of natural gas liquids, will
dominate output growth over the next 10 years, OPEC, and its
Middle Eastern members in particular, will regain importance
after that as supplies from outside the organization falter,
according to the report. OPEC pumps about 40% of global oil
The Middle East, the only large source of low-cost oil,
remains at the center of the longer-term outlook,
the agency said.
OPECs members are Algeria, Angola, Ecuador, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab
Emirates and Venezuela. It will next meet to review
production targets on Dec. 4 in Vienna.
More than half of the 790 billion bbl the world will need to
produce by 2035 is needed to compensate for declining output
from mature deposits, the agency said. Output declines at a
rate of 6%/year at conventional oil fields once they reach
peak production, according to the report.