US to overtake Saudis as top oil producer in 2020

A boom in shale gas output will help the US become nearly self-sufficient in energy around 2035. Photo / AP
A boom in shale gas output will help the US become nearly self-sufficient in energy around 2035. Photo / AP

The United States will become the world's largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast yesterday.

In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production, thanks partly to a boom in shale gas output as well as more efficient use of energy, will allow the US, which now imports about 20 per cent of its energy needs, to become nearly self-sufficient around 2035.

That is "a dramatic reversal of the trend seen in most other energy-importing countries", said the Paris-based IEA.

"Energy developments in the US are profound and their effect will be felt well beyond North America."

For example, oil exports out of the Mideast will increasingly go to Asia as the US becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets.

Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran's alleged plan to develop nuclear weapons.

The IEA added that trends in the energy markets would be influenced by some countries' retreat from nuclear power, the spread of wind and solar technologies and a rise in unconventional gas production.

The agency concluded that despite the rising use of low-carbon energy sources, huge subsidies will keep fossil fuels "dominant in the global energy mix".

"The world is still failing to put the global energy system on to a more sustainable path."

- AP

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n1 at 30 Aug 2014 11:44:33 Processing Time: 454ms