The International Energy Agency (IEA), which was formed in the 1970s to keep track of trends and improve energy security, released its World Energy Outlook 2013 in London on November 12, 2013. The 2013 Outlook provides a review of key trends that IEA believes will shape the future of global energy through 2035. For the US, the IEA projects that it will pass Saudi Arabia and Russia as the world’s top oil producer by 2015 due to the use of hydraulic fracturing and other unconventional technologies in developing its shale gas resources. This will bring the US closer to energy self-sufficiency. But, according to the IEA, the US will lose its dominant position by 2020 due to decline in production from Texas and North Dakota fields. Continuous investment in drilling new wells will be required to compensate for the declines in existing wells and to maintain a high output. For the countries seeking to replicate the success of the US with hydraulic fracturing, the IEA cautions that “good geology alone is not sufficient.” These countries do not have the US’s legal environment and oil services capabilities to make shale oil and gas development worth the cost.
Other key trends noted in IEA’s World Energy Outlook 2013 include:
- After 2020, Middle East oil will regain its dominance.
- By 2020, China will be the largest oil-consuming country, overtaking the US
- Fossil fuels will be providing 75% of global energy by 2035.
- Demand for oil will increase 27% between 2012 and 2035, to 111 million barrels per day.
- Demand in the US, Europe and other developed countries will decrease between 2013 and 2035 due to improved energy efficiencies, such as tougher automotive fuel standards.
- Oil use is increasingly concentrated in transport and petrochemicals.
- The demand for diesel will grow three times faster than the demand for gasoline.
- Over the past ten years, more super-giant off-shore fields have been discovered in Brazil than in any other country. By 2035, Brazil will produce 6 million barrels of oil per day and become the world’s sixth largest oil producer.
This post was written by Barclay Nicholson (firstname.lastname@example.org or 713.651.3662) from Norton Rose Fulbright’s Energy Practice Group.