US primed to achieve net energy self-sufficiency
The US looks set to achieve net energy self-sufficiency within two decades, but it could be a lot faster than that if innovation is allowed to flourish in a stable business environment, according to a panel of US politicians and business leaders
They also warned that trying to pick winners and losers rather than fostering technological improvement across the spectrum of potential energy sources could mean missing the next big thing to compete with shale gas and tight oil. “No one in 2005 could predict with any certainty what was going to happen with natural gas, so what you have to expect is the unexpected,” Ken Hughes, minster of Energy for the Canadian province of Alberta, told WEC 2013 delegates. “There will be a day when oil and gas will not be the belles of the ball. We have to be ready for that,” he added.
Renewable energy is expected to play a major role in US energy provision in coming years. BP forecast in its Energy Outlook 2030 North America, published earlier this year, that renewable fuels, including biofuels, would be the fastest growing fuels in the US and Canada, with demand growth averaging 6.1% a year between 2011 to 2030. That compares with a rise in natural gas consumption of 0.8% a year, one of 0.9% for coal and a fall of 0.8% in oil use.
However, it will be gas and coal that dominate the power industry and oil that fuels a substantial portion of US vehicles, while oil and gas will be needed to supply a reviving petrochemicals industry. Matthew Mead, governor of Wyoming, told delegates that while oil, gas and coal would remain “the bread and butter” of the energy mix, innovation across differing forms of energy should continue to maximise their potential. “What we shouldn’t do today is say this is the one we want and we don’t want these,” he said.
Others emphasised the importance of making savings on the demand side, to improve North America’s energy balance. “We tend to be fixated on the supply side, while there is an opportunity to improve how we use energy and it is hasn’t been given any attention,” Mike MacSween, executive vice president of Suncor Energy said, noting that improved energy efficiency was one of the most effective ways of tackling carbon emissions.
Success in exploiting shale and other tight oil means the US has already made significant strides in reducing its reliance on oil imports. The US looks likely to surpass Russia as the world’s second-biggest oil producer after Saudi Arabia during 2014. According to the International Energy Agency, US petroleum liquids production will average 11.03 million barrels a day (b/d) next year compared with 10.86m b/d in Russia.
The proposed Keystone XL pipeline to channel synthetic crude oil from oil sands in Alberta to the US Gulf of Mexico coast, much of it to supply petrochemicals plants, could add an extra dimension to efforts to improve energy self-sufficiency across the continent. The project has met opposition over the possible environmental risks, which has delayed government approval and remains a political hot potato, but panellists in Daegu were keen for the project to go ahead. “I think it’s going to happen, I certainly think it should happen,” Mead said, adding that the pipeline would be good for both Canada and the US. He said proponents needed to explain the pipelines benefits and risks better. “In the states it is going through, there are already miles and miles of pipeline,” he said.
Osmar Abib, the US-based global co-head of Credit Suisse’s Energy Group, agreed. “It should be approved. It’s a national security issue for the US in my opinion. Why discourage Canada from sending their oil to the US? The oil is going to get to the US anyway, so why not do it in the most environmentally responsible way,” he said.
Supporters of Keystone XL suggest that if the pipeline is not built, Canadian oil will be transported to the US by truck or by rail, which, they argue, would carry more risk than pipeline transportation.
Barry Worthington, secretary of the US committee of the World Energy Council and executive director of the United States Energy Association was also enthusiastic about the benefits of Keystone, but he was less optimistic than others about the project’s timetable. “I think that in the 2016 WEC congress in Istanbul, about a month before our next [US] presidential election, unfortunately we will still be talking about whether Keystone is going to be approved and it will be an election issue then, just as it was in 2012,” he said.