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Prognosis Looking Good For American Energy


America’s energy future has never looked brighter. That’s one general take-away of the International Energy Agency’s (IEA) World Energy Outlook, released yesterday, which describes a global energy mix in the midst of great upheaval. But underlying all the uncertainty over what comes next is the undeniable fact that the United States is better positioned than ever.

The shale boom has, to this point, been a uniquely American phenomenon, and it’s yielding vast quantities of “tight” oil—so much so that the US looks set to surpass the Saudis in oil production in the next three years, two years sooner than the IEA predicted in last year’s Outlook. The IEA tempers this good news with a warning that quantities of oil fracked from shale will plateau around 2020, when the world will once again look to OPEC for most of its new supply.

Even if that’s true, and the tight oil boom is more of a surge than a revolution, the US will still be flush with vast quantities of natural gas. This gas, fracked from shale, will continue to stimulate the American economy through 2035, according to the IEA. The report also carries a warning to Europe: put off reforming your energy policy—which has “average…European industrial consumers paying more than twice as much for power as their counterparts in the United States”—at your own peril.

Of course, it’s important to take outlooks like the IEA’s recent offering with a grain of salt. 2003’s World Energy Outlook scarcely mentioned shale gas, and failed to predict America’s recent tight oil boom—how could it? The IEA’s bearish long-term perspective on American oil production helps to set realistic expectations, but it shouldn’t be taken as gospel. What we do know: we’re in good shape today, and tomorrow looks even better.

[North America image courtesy of Shutterstock]

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  • Andrew Allison

    “Prognosis Looking Good For American Energy”
    Less so for literacy.

  • Jacksonian_Libertarian

    International bureaucracies are even worse than National bureaucracies at providing truthful data and predictions untainted by politics. To be bearish in the face of stunning increases in production, and particularly in the skyrocketing production per well which shows no signs of stopping, and is lowering the break even point of fracking (it has dropped from $80 per barrel to $40-$50 per barrel in just a few years), is just stupid.

  • crocodilechuck

    Walt: ‘Tomorrow looks even better’?

    “Claims that the shale boom in the US will eventually see the country become energy self-sufficient seems to have received its biggest blow yet after the International Energy Agency, in its latest World Energy Outlook report, stated that shale oil will only be a temporary trend, and very soon the world will return to rely on the Middle East for its oil.

    Maria van der Hoeven, the executive director of the IEA, said that “there is a huge growth in light tight oil, that it will peak around 2020, and then it will plateau.

    We expect the Middle East will come back and be a very important producer and exporter of oil, just because there are huge resources of low-cost light oil. Light tight oil is not low-cost oil.” (snip)

    Walter Mead: The Candide of Annadale-on-Hudson!

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