A milestone was reached last month in oil imports: For the first time in 18 years, the U.S. produced more oil than it imported thanks to fracking and reduced consumption. But according to a new IEA report, shale oil growth will peak within a decade.
Matthew L. Wald, the Times veteran energy reporter, writes that "according to a report released Tuesday by the International Energy Agency (the Paris-based organization that provides energy analysis to 28 industrialized nations), production of such oil [from shale formations] in the United States and worldwide will provide only a temporary respite from reliance on the Middle East."
[B]y the mid-2020s, non-OPEC production starts to fall back and countries from the Middle East provide most of the increase in global supply,” the report said. A high market price for oil will help stimulate drilling for light tight [shale] oil, the report said, but the resource is finite, and the low-cost suppliers are in the Middle East.
Reporting on the record U.S. oil production, Wendy Koch of USA Today writes, "Domestic oil production is at a 24-year high while foreign oil imports are at a 17-year low. The result: production exceeded net imports for the first time since February 1995, although the nation still imports 35% of the petroleum it uses."
- U.S. crude oil production averaged 7.7 million barrels per day (bbl/d) in October. EIA forecasts U.S. crude oil production will average 7.5 million bbl/d in 2013 and 8.5 million bbl/d in 2014. [EIA]
The milestone was reported by the Energy Information Administration, a division of the U.S. Department of Energy, in its "Short-Term energy Outlook" released Wednesday. Motorists will no doubt be pleased to read that gasoline prices are forecast to continue to remain lower than last year's average of $3.63 per gallon through 2014.
As for the IEA forecast of peaking domestic oil production, Wald warns that "(p)redicting energy trends is notoriously difficult. For example, hardly anybody predicted the revolution in oil and gas production created by fracking in shale."
To that end, the Wall Street Journal editorial board member, Holman W. Jenkins, Jr., offered this caveat in a Nov. 8 piece, "Germany Reinvents the Energy Crisis" [subscription] to those who are quick to jump on the 'finite supply' of fossil fuels perspective.
In fact, the world's store of fossil hydrocarbons is truly vast, including almost unimaginable quantities of methane hydrates. The challenge is the technological and economic one of getting access to a given resource at an affordable price....
The IEA report, which deals with all aspects of energy, not just oil, had a dire warning in terms of growing carbon dioxide emissions.
[E]nergy demand will grow faster than renewable energy, so carbon dioxide output will rise 20 percent by 2035, the report predicts. In contrast, climate scientists are calling for an 80 percent reduction in carbon dioxide by 2050.
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