America: The Next Energy Superpower?
America, the next energy superpower
According to the International Energy Agency's World Energy Outlook report, the U.S. will be the leading energy producer in the world by 2020:
Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector. The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge – and steadily changing the role of North America in global energy trade. By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in US oil imports, to the extent that North America becomes a net oil exporter around 2030.
If true, the geopolitical consequences of this development are profound. Put simply: it will mean the death of the Carter Doctrine or the idea that the U.S. has to police the Persian Gulf for the sake of its own security. "Energy independence" is a chimera, but the increasing diversification of supply means that no single region can hold the world economy hostage like it used to. U.S. policy should be focused on magnifying this trend - through increased domestic production, greater efficiency and the development of alternative energy technologies.
Not everyone is convinced that the future is so rosy, like Stuart Staniford:
I am less persuaded myself that using a thousand oil rigs to generate an extra one million barrels per day of oil is necessarily a sign of a large and long-term sustainable increase in US oil production (as opposed to, say, frenzied scraping of the bottom of the barrel). But, still, I'm not certain beyond a reasonable doubt just how deep this particular barrel can be scraped.
The greater challenge will be thinking long term: if the IEA is to be believed, Saudi Arabia will soon lose its "swing producer" status. Are they ready for that? And will the U.S. be similarly prepared when it own supplies eventually draw down?