The US will overtake Saudi Arabia and Russia to become the world's largest global oil producer by the second half of this decade, according to the International Energy Agency, as the shale revolution redraws the global energy landscape
Nov. 15.─ The agency's latest World Energy Outlook said the US could be almost self-sufficient in energy by 2035, marking "a dramatic reversal of the trend seen in most other energy-importing countries". It said the US would overtake Russia as the largest gas producer by 2015.
The resurgence in US oil and gas production, it said, was spurring economic activity "with less expensive gas and electricity prices giving [US] industry a competitive edge". Last week, a Germany industry lobby group warned that US companies are enjoying a rising advantage in energy costs.
New extraction techniques – most notably hydraulic fracturing, or fracking, and horizontal drilling – have unlocked huge hydrocarbon resources previously thought unrecoverable. The boom, which started in natural gas, has switched to "tight oil" in places such as North Dakota's Bakken Shale and Eagle Ford in South Texas.
However, other analysts have warned that the US oil boom is still in its infancy and continued growth cannot be guaranteed. Fatih Birol, the IEA's chief economist, noted that a drop in global oil prices would affect production, since tight oil requires a high market price to be economic. In contrast, Saudi oil is much cheaper to produce.
If realised, the IEA's prediction could have significant implications for global commodity markets and the broader geopolitics of energy ...