U.S. to Be World’s Biggest Oil Producer, Overtaking Russia, Saudi Arabia By 2020 – IEA

Oil Well file photo

LONDON. Nov 12 (Interfax) – The boom in shale production will turn the United States into the world’s biggest oil producer by 2020, overtaking current leaders Russia and Saudi Arabia, the International Energy Agency said in its latest World Energy Outlook.

Only a year ago the IEA was saying that Russia and Saudi Arabia would be the only candidates for top spot by the end of the decade.

“The recent rebound in U.S. 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 – and steadily changing the role of North America in global energy trade. By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in U.S. oil imports, to the extent that North America becomes a net oil exporter around 2030,” this year’s World Energy Outlook says.

The U.S. will not be importing more than 2 million barrels per day – three quarters less than at present – by 2035.

The U.S. Energy Department says oil production has risen 7% on average to 10.76 million bpd in the year since the IEA’s last forecast.

But OPEC’s role in world oil production will not diminish, in fact it will increase from 42% today to 50% in 2035, the IEA thinks.

Fossil fuels will continue to prevail in global energy consumption in the coming decades. Global demand for oil is expected to rise from 87.4 mb/d in 2011 to 99.7 mb/d by 2035 and the price of oil will average up to $125 a barrel in 2011 prices and $215 in nominal terms.

China will be the biggest energy consumer, with demand rising 60% by 2035, while consumption in OECD countries will rise just 3%.

Global gas consumption will jump 50% by 2035 to 5 trillion cu m, the IEA forecasts. Unconventional fields in the U.S., Australia and China will produce almost half of that gas.

Demand for coal is expected to rise 21%, with India and China still the main consumers.