Posts Tagged ‘U.S. as Top Oil Producer’

U.S. to be top oil and gas producer?

November 13, 2012

A couple of years ago, I thought the goal of U.S. energy independence was a pipe dream.  But a report yesterday by the International Energy Agency predicts that the United States will become the world’s largest oil and gas producer in the next five years, and a net oil and gas exporter in less than 20 years.

And how is this to come about?  By hydraulic fracturing and horizontal drilling for shale oil and gas, otherwise known as hydrofracking.

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The IEA report forecasts a decline in nuclear power’s share of world energy, and an increase in renewable energy’s share, based on increased government subsidies.  Energy conservation efforts will be stepped up.  But 20 years from now the world still will be dependent on fossil fuels, and demand for energy will be one third higher than it is now.

Rising oil and gas prices will be a burden on the world economy, but less so in the United States than elsewhere.  Natural gas prices in Europe will be five times as high as in the United States in 2030, and gas prices in eastern Asia will be eight times as high.

Although the United States is predicted to be the largest oil and gas producer, Saudi Arabia will continue to be the largest oil exporter, but with Iraq replacing Russia as the No. 2 exporter.  Most of the oil of the Middle East will go to the growing economies of China, India and other Asian countries.

The IEA says carbon dioxide emissions will be at record levels, and 1.3 billion people will be without electricity.

I don’t like the idea of a United States economy dependent on hydrofracking, which is what “unconventional” oil and gas is based on.  Hydrofracking at best is destructive to land and at worst a threat to water supplies.  But in the absence of alternatives, we Americans may not be able to afford to do without it.

Forecasts can be wrong, of course.  I don’t have expert knowledge that would enable me to evaluate the IEA’s report, but it seems plausible.  I think it would be a big mistake to regard a resurgence of the domestic U.S. oil and gas industry as the answer to U.S. economic problems.  We need manufacturing and high technology, not just extractive industries.  If the United States depends on oil and gas alone, this country could wind up as an economic as well as political facsimile of Vladimir Putin’s Russian petro-state.

The New Policies Scenario is based on the assumption that governments will carry out policies they have announced for reducing greenhouse gas emissions and phasing out subsidies of fossil fuels.

Click on North America leads in shift in global energy balance for the IEA press release on its latest World Energy Outlook report.

Click on Report Sees U.S. as Top Oil Producer, Overtaking Saudi Arabia, in 5 Years for a New York Times report.