Hydrocarbon Processing Copying and distributing are prohibited without permission of the publisher
Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.



IEA predicts US energy independence by 2035

11.12.2013  | 

Soaring shale output in the US is helping the world’s top 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 OPEC’s 12 members, whose output is at its lowest in two years.

Keywords:

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 world’s 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 Outlook

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 America’s 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 world’s 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 OPEC’s 12 members, whose production is at its lowest in two years amid political unrest in Libya and theft in Nigeria.

Biggest producer

The US is overtaking Russia and Saudi Arabia to become the world’s 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 year’s World Energy Outlook that US output would exceed Saudi Arabia toward the end of the decade.

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.

Refinery closures

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 world’s biggest oil importer, the report showed. India will displace China as the biggest driver of energy demand growth after 2020, the IEA said.

Expanding refinery capacity in Asia and the Middle East along with reduced demand in many developed nations is intensifying the pressure for plants to close, the agency said.

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 world’s sixth-largest oil producer, according to the agency.

Regain importance

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 supplies.

“The Middle East, the only large source of low-cost oil, remains at the center of the longer-term outlook,” the agency said.

OPEC’s 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.



Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Related articles

FEATURED EVENT



Sign-up for the Free Daily HP Enewsletter!

Boxscore Database

A searchable database of project activity in the global hydrocarbon processing industry

Poll

Should the US allow exports of crude oil? (At present, US companies can export refined products derived from crude but not the raw crude itself.)


69%

31%




View previous results

Popular Searches

Please read our Term and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2014 Hydrocarbon Processing. © 2014 Gulf Publishing Company.