IEA: North American Oil to Dominate World Supply Growth

The Wall Street Journal ^ | May 14, 2013 | SARAH KENT and JUSTIN SCHECK

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LONDON—North American oil production will dominate world-wide supply growth over the next five years, the International Energy Agency predicted Tuesday, the result of growing production from "fracking" and other technologies that access once-inaccessible reserves.

It is a shift that few predicted five years ago, and will come at the expense of producers like members of the Organization of the Petroleum Exporting Countries that have for years dominated the industry.

In its most recent analysis, which takes a five-year view of the oil market, the IEA said U.S. production is rising much faster than previously forecast as a result of sustained high prices and more-efficient operations.

The latest forecast marks a shift in the IEA's previous thinking, which saw supply growth split between OPEC and non-OPEC countries in the medium term. The fast U.S. supply growth has diminished U.S. demand for oil from OPEC members like Nigeria, and in the long term, growing U.S. exports of oil and natural gas could further weaken OPEC, says Amy Myers Jaffe, who studies energy and the oil industry at the University of California at Davis but didn't know the contents of the IEA report.

The IEA, which represents the interests of large, energy-consuming countries, last year forecast that the U.S. could become the world's biggest oil producer by 2020, overtaking OPEC giant Saudi Arabia, though possibly only temporarily.

The surprise upswing in North American production in recent years is the result of faster-than-expected development of resources locked in shale and other tight rock formations in the country, and has changed expectations of future supply and demand world-wide.

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Drill, baby. DRILL!!

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ping

[tomkat]

             

[thackney]

[VTenigma]

Peak oil, we can’t drill our way out, hair on fire!