A new report from the International Energy Agency expresses perhaps the most bullish “official” outlook on US energy production in recent memory. The IEA projects US oil production to surpass Saudi Arabia’s by 2017, ultimately resulting with the US as a net exporter of oil by 2030.
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 US oil imports, to the extent that North America becomes a net oil exporter around 2030. This accelerates the switch in direction of international oil trade towards Asia, putting a focus on the security of the strategic routes that bring Middle East oil to Asian markets.The United States, which currently imports around 20% of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy importing countries.
While the IEA projects global energy demand will rise over one-third between now and 2035, most of that growth is projected to come from developing nations.
This unfolding story is a potential game changer to say the least. The US would, in my opinion, be heading down a slippery economic slope were it not for the good fortune of having access to relatively cheap energy into the middle of the 21st century.
CI fav Marc Faber recently remarked that all the natural gas in the world cannot save the US from its own stifling bureaucracy. Ultimately it may not – but it may serve to stave off the terminal economic decline currently faced by Europe and Japan for another few years…or even decades.