The International Energy Agency (IEA) released its latest World Energy Outlook today with the headline projection that by 2020 the United States will be the world's leading oil producing nation. The agency further forecasts that the U.S. will cut its import demands to the point where North America will be a net exporter of crude by 2030:
The United States, which currently imports around 20% 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.
The IEA also notes that the rising production of natural gas in the U.S. has pushed prices there down to levels that will not be sustainable given the spread of liquefied natural gas deliveries beyond national and regional boundaries. The current U.S. price of around $3.50 per thousand cubic feet will rise to something between that low price and the current price of around $16 per thousand cubic feet in Japan.
The most dramatic effect on oil prices will be the result of crude production in Iraq, where the agency expects production to rise to more than 6 million barrels a day in 2020 to more than 8 million barrels a day by 2035. Iraq is expected to be second only to Russia in the amount of crude it exports.
Production in non-OPEC countries is expected to rise to plateau at more than 53 million barrels a day through the mid-2020s, before falling back to around 50 million barrels a day. OPEC countries are expected to raise production from 42% of current supply to near 50% by 2035.
The agency sees global demand for crude jumping from around 87.4 million barrels a day in 2011 to 99.7 million barrels a day by 2035, while prices rise to a nominal $215 a barrel. That's $125 a barrel in 2011 dollars.
Demand for coal is expected to increase, especially from China and India, but, the IEA says:
The sensitivity of these trajectories to changes in policy, the development of alternative fuels (e.g. unconventional gas in China) and the timely availability of infrastructure, create much uncertainty for international steam coal markets and prices.
Nuclear power generation is expected to rise, but at a slower pace than projected in last year's IEA outlook. And renewables will account for about one-third of global electricity generation by 2035:
Renewables become the world's second-largest source of power generation by 2015 (roughly half that of coal) and, by 2035, they approach coal as the primary source of global electricity.
An executive summary of the 2012 World Energy Outlook is available here.
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