Report: U.S. Could Be Top Oil Producer by 2016
The U.S. will pass Saudi Arabia as the world’s No. 1 oil producer by 2016, by which time Russia also will have been in the rear view mirror for at least a year, the International Energy Agency (IEA) said Tuesday (Nov. 12) in its annual report.
According to a MarketWatch report, rising output from Brazil also helps reduce the role of OPEC nations, the Paris-based agency said.
There’s a catch, though. Beginning in the mid-2020s, fields in North Dakota and Texas will be past their peak and the Middle East will reclaim its role as world leader in oil supply growth, the IEA said.
The region is the only large source of low-cost oil, the agency added. The IEA advises industrial Western nations in the development of their energy policies and coordination of supplies.
Last month, the Department of Energy’s Energy Information Administration said the U.S. would end this year as the world’s largest producer of petroleum and natural gas, surpassing Russia and Saudi Arabia. U.S. and Russian energy production have been roughly the same in the past two years.
The IEA, in turn, moved its prediction up a year: in last year’s annual report, the agency forecast the U.S. would surpass Saudi Arabia as largest producer by 2017.
Plentiful energy supplies in the U.S. have given it a competitive advantage, the IEA said. On average, Japanese or European industrial consumers pay more than twice as much for electricity as U.S. industrial consumers.
“Lower energy prices in the United States mean that it is well-placed to reap an economic advantage, while higher costs for energy-intensive industries in Europe and Japan are set to be a heavy burden,” said Fatih Birol, the IEA’s chief economist.
The report also said global energy demand is set to rise by one-third by 2035, with demand coming mostly from Asia. China, however, takes a back seat as India and Southeast Asian countries drive consumption higher, the IEA said.