The U.S. will overtake Saudi Arabia and Russia as the world's top oil producer by 2017, the West's energy agency said on Monday. It predicted that Washington would come very close to achieving previously unthinkable energy self-sufficiency.
The forecasts by the International Energy Agency (IEA), which advises large industrialised nations on energy policy, were in sharp contrast to previous IEA reports, which saw Saudi Arabia remaining the top producer until 2035.
"Energy developments in the U.S. are profound and their effect will be felt well beyond North America, and the energy sector," the IEA said in its annual long-term report, giving one of the most optimistic forecasts for U.S. energy production growth to date.
"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," it added.
The IEA said it saw a continued fall in U.S. oil imports with North America becoming a net oil exporter by around 2030 and the U.S. becoming almost self-sufficient in energy by 2035.
"The U.S., which currently imports around 20 per cent 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," it said.
IEA Chief Economist Fatih Birol told a news conference in London that he believed the U.S. would overtake Russia as the biggest gas producer by a significant margin by 2015. By 2017, it would become the world's largest oil producer, he said.
The U.S. would rely more on natural gas than either oil or coal by 2035 as cheap domestic supply boosts demand among industry and power generators, the IEA said. Birol said he realised how optimistic the IEA forecasts were, given that the shale oil boom was a relatively new phenomenon.
"Light, tight oil resources are poorly known. If no new resources are discovered after 2020 and plus, if the prices are not as high as today, then we may see Saudi Arabia coming back and being the first producer again," he said.
The IEA said it saw U.S. oil production rising to 10 million barrels per day (bpd) by 2015 and 11.1 million bpd in 2020 before slipping to 9.2 million bpd by 2035. Saudi Arabian oil output would be 10.9 million bpd by 2015, the IEA said, 10.6 million bpd in 2020 but would rise to 12.3 million bpd by 2035.
That would see the world relying increasingly on OPEC after 2020 as, in addition to increases from Saudi Arabia, Iraq will account for 45 per cent of the growth in global oil production to 2035 and become the second-largest exporter, overtaking Russia.
OPEC's share of world oil production will rise to 48 per cent from 42 per cent now. Russian oil output, which over the past decade had been steadily above Saudi Arabia, is predicted to stay flat at over 10 million bpd until 2020, when it would start to decline to reach just above 9 million bpd by 2035.
``Russia, which remains the largest individual energy exporter throughout the period, sees its revenues from oil, natural gas and coal exports rise from $380 billion in 2011 to $410 billion in 2035," the IEA said.
The U.S. oil boom would accelerate a switch in the direction of international oil trade, the IEA said, predicting that by 2035 almost 90 per cent of oil from the Middle East would be drawn to Asia.