IEA sees US tight-oil output at 4m b/d by 2020
US unconventional production will continue to soar, according to the International Energy Agency
The US will become the largest producer of crude oil in the world in the next five years as its unconventional oil production soars, the International Energy Agency (IEA) said in London today.
At the launch of its 2012 World Energy Outlook the IEA said US tight-oil production could reach 4 million barrels per day (b/d) by 2020. Tight-oil output this year was 1.5 million b/d, according to Wood Mackenzie, a consultancy.
The IEA said that in ten years the US will import "almost zero” crude from the Middle East as its total foreign oil needs – which now amount to around 10 million b/d – evaporate.
“As a result of this, the US will be the largest oil producer in the world, overtaking Saudi Arabia,” said IEA chief economist Fatih Birol. “This is a major development with major (global) implications.”
The US will emerge as a net-oil exporter, the IEA said, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035.
In the New Policies Scenario, which assumes that countries will reduce greenhouse-gas emissions and phase out fossil-fuel subsidies, the US will become a net exporter of natural gas by 2020 and will be “almost self-sufficient” in energy by 2035.
Transport-sector fuel efficiency will account for about 45% of the reduction in the US’ import needs. The White House earlier this year introduced legislation to lift cars’ mileage to 54.5 miles per gallon.
“Even now spare (US oil) capacity is under 3 million b/d so the more unconventional oil we can bring online the better I think,” IEA deputy director Richard Jones told PEU in an interview. “It’s better for the US in terms of self-sufficiency and it’s better for the world in terms of moderating the impact it will have on (oil) prices. And I think it’s better for some of the Opec countries because it could help them moderate some of their production.” vUS oil and gas producers have increasingly been shifting their focus to liquids-rich gas fields, as rising production of (dry) shale gas has sent Henry Hub prices tumbling down to around $3 per million Btu this year. This is down from around $8/mBtu in 2008.
The IEA said that US gas prices are now around five times cheaper than in Europe, and around eight times cheaper than in Asia.