IEA: U.S. to overtake Russia as biggest natural gas producer already in 2015

The International Energy Agency, which is supposed work for ensuring "reliable, affordable and clean energy for its 28 member countries and beyond", has for years now been a leading force in the international climate change propaganda machine:

However, the IEA now seems - at least temporarily - to have returned to its original task.The newly published World Energy Outlook shows that some people within the IEA understand the importance of the US-led shale gas and oil revolution. At a press conference in London even the IEA's warmist Chief Economist Fatih Birol had to admit that the United States will overtake Russia as the biggest gas producer by a significant margin already by 2015. And according to Birol the U.S. will become the world's largest oil producer only two years later. 

This is what the IEA says in its press WEO press release:

The global energy map is changing in dramatic fashion, the International Energy Agency said as it launched the 2012 edition of the World Energy Outlook (WEO). The Agency's flagship publication, released today in London, said these changes will recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades.

“North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency,” said IEA Executive Director Maria van der Hoeven. “This year’s World Energy Outlook shows that by 2035, we can achieve energy savings equivalent to nearly a fifth of global demand in 2010. In other words, energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits.”

The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, the WEO’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035. Links between regional gas markets will strengthen as liquefied natural gas trade becomes more flexible and contract terms evolve. While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035. China, India and the Middle East account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables.

Fossil fuels will remain dominant in the global energy mix, supported by subsidies that, in 2011, jumped by almost 30% to $523 billion, due mainly to increases in the Middle East and North Africa. Global oil demand grows by 7 mb/d to 2020 and exceeds 99 mb/d in 2035, by which time oil prices reach $125/barrel in real terms (over $215/barrel in nominal terms). A surge in unconventional and deepwater oil boosts non-OPEC supply over the current decade, but the world relies increasingly on OPEC after 2020. Iraq accounts for 45% of the growth in global oil production to 2035 and becomes the second-largest global oil exporter, overtaking Russia.

While the regional picture for natural gas varies, the global outlook over the coming decades looks to be bright, as demand increases by 50% to 5 trillion cubic metres in 2035. Nearly half of the increase in production to 2035 is from unconventional gas, with most of this coming from the United States, Australia and China. Whether demand for coal carries on rising strongly or changes course radically will depend on the strength of policy decisions around lower-emissions energy sources and changes in the price of coal relative to natural gas. In the New Policies Scenario, global coal demand increases by 21% and is heavily focused in China and India.

So far, so good, but where the warmist IEA errs, is in its projections for renewable energy:

Renewables become the world’s second-largest source of power generation by 2015 and close in on coal as the primary source by 2035. However, this rapid increase hinges critically on continued subsidies. In 2011, these subsidies (including for biofuels) amounted to $88 billion, but over the period to 2035 need to amount to $4.8 trillion; over half of this has already been committed to existing projects or is needed to meet 2020 targets.

With more than enough of cheap and clean natural gas and oil on offer, governments will not be  willing to waste huge sums of taxpayers' money on inefficient and expensive wind and solar power. 

Only the exit of dictator Putin will bring back Russia to the camp of energy winners

 

Russia's propaganda radio, The Voice of Russia, is to be congratulated for publishing an (almost) objective article about the game changing shale gas and oil revolution: 

Ten years ago, it was impossible to imagine that the United States would become a major producer of natural gas and overtake Russia for first place in volume of production. Now, it is a fact. Many countries have begun to develop shale gas, including Poland, Ukraine, Australia, the UK and China. According to media reports, by 2032 the United Kingdom will be able to meet a quarter of its needs with this type of fuel.

New technologies have been developed that make it feasible to extract shale oil in many countries. For example, according to available information, Japan is betting on it. Japan Petroleum Exploration Company has managed to extract liquid shale oil, which may solve the country’s acute power shortage, exacerbated by Tokyo’s decision to abandon nuclear energy in the future.

The shale revolution, if it happens, will inevitably have a major impact on international relations. Imagine a purely theoretical scenario: the USA, Western Europe and China stop importing oil and gas, or at least dramatically reduce imports. It is safe to say that the oil monarchies of the Persian Gulf would be among the biggest losers in such a scenario. Demand for their products would plummet, and they would have to significantly scale back their geopolitical ambitions.

The United States would become less interested in Central Asia, and pipeline projects bypassing Russia would likely come to a halt. The future of Caspian Sea development would be in question. Perhaps, instead of trying to gain access to foreign energy reserves, Washington would focus its efforts on other areas, such as restoring its position in the Western Hemisphere (i.e. Latin America), which has weakened in recent years.

China, which is also planning to start domestic production of shale gas and oil, would very likely lose interest in Central Asia. Chinese expansion into Africa would also peter out, and Beijing’s dependence on oil supplies from the Persian Gulf would diminish.

At first glance, if shale technology lives up to the hype, Russia would appear to be in the camp of losers. This, however, is not quite true. First, the country has a more diverse economy than, say, Saudi Arabia. It is of course heavily dependent on oil and gas revenues, but a fall in the latter would provide a further powerful stimulus to economic diversification.

The fact is that, due to dictator Putin's and his money machine Gazprom's complete failure in anticipating the shale gas revolution and its strategic importance, Russia is most certainly in the camp of losers. With the amateur "economist" and "energy expert" Putin and his henchmen in charge, Russia will not be able to diversify its economy, which is still heavily dependent on the income from gas and oil exports. (Oil and gas revenues, including mining and quarrying taxes as well as export customs duties on oil and gas, together constitute almost half of the federal government's revenues). Russia will be able to leave the losers' camp only when Putin exits. 

The French ban on shale gas exploration to be reversed?

Is France beginning to see the light with regard to shale gas and oil exploration?:

Shale gas, an energy game changer in the U.S., is dividing the French government, raising the possibility the country may lift a ban on its exploration.

“It’s not a banned subject,” Industry Minister Arnaud Montebourg said today in Paris. “We must confront it. For the moment, there is no government position.”

Montebourg, who is charged with reversing job losses and a decline in French industrial production, was speaking at a conference today attended by top executives of some of the country’s biggest companies, including energy explorer Total SA, a shale gas producer in the U.S. whose permit was revoked in France by the previous government.

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France last year became the first country in the world to ban fracking, which uses water, sand and chemicals to open fissures in rocks and release gas and oil. Following passage of the law in parliament, the previous government suspended the rights of energy companies to explore for shale gas around Paris and in southern France. Oil companies including Total (FP), the nation’s largest, and Toreador Resources Corp. had been awarded licenses for exploration.

France and Poland are the two countries in Europe with the biggest potentially recoverable reserves of shale gas and oil. Only in the region around Paris - with a geology similar to the Bakken shale i North Dakota, there may be over 100 billion barrels of oil:

“How can we not want to know if our land has these resources? ” Total’s Pouyanne asked. “Our country may have these resources. If it does, it would indisputably represent industrial renewal. We must have confidence in the ability of our country’s industry to develop these resources and respect strict environmental rules.”

Read the entire article here

PS

One must hope that the French industry minister will be able to persuade François Hollande to join the voices of sanity on this matter. 

Shale oil is the next big thing

The major impact of the US led shale gas revolution on the global energy markets is already a widely known fact, but another as important development - the shale oil revolution - is just around the corner:

 We have discussed some of the shale oil prospects and their recent successes, but the story of US shale oil does not end there. There is, for example, the Green River Formation (mainly in Colorado and Utah). According to estimates from the USGS, this contains about 3 trillion (3,000 billion) barrels of oil, about half of which may be recoverable, depending on the available technology and economic conditions. Note that the US consumes about 7 billion barrels of oil per year.

If the United States is able to commercially exploit part of these resources and combine this with successfully exploiting conventional oil resources in new offshore prospects, it is quite possible for the country to substantially reduce its oil import dependency and perhaps even achieve self-sufficiency by 2035. According to rfigures from consultancy PFC Energy, oil companies are investing an estimated $25 billion this year to drill 5,000 new oil wells in tight rock fields in the US. Energy consultancy IHS CERA foresees that, based on production plans from industry, unconventional oil production could rise from about half a million barrels per day now to 3 million barrels per day in 2020. Daniel Yergin, chairman of IHS CERA, has said: "This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States."

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To conclude, the potential of both conventional and unconventional oil production in the US is quite significant and one could expect that by 2035, if backed by sound policies, US oil import dependency would be substantially reduced. This means that crude oil meant for the US will look for other markets. If countries like China and India could also increase their oil production, substantial supplies would become available for the rest of the world.

Read the entire article here

One thing is certain: The prospects for the US economy are excellent in the decades to come, providing that American politicians make the right decisions and allow all the good things to happen. The same possibilities are open to China, India and many other countries. 

US unconventional oil reserves are as large as the entire world’s proven oil reserves

The testimony to Congress by Anu K. Mittal,  director of the US Government Accountability Office’s natural resources and environment office, confirms what Robert Mills recently wrote in an article: We can forget the talk about "peak oil". There is more than enough of "unconventional" oil and gas.


Tapping the vast amounts of oil locked within U.S. oil shale 
formations could go a long way toward satisfying the 
nation’s future oil demands. Oil shale deposits in the Green River Formation
are estimated to contain up to 3 trillion barrels of oil, half of which may be 
recoverable, which is about equal to the entire world’s proven oil reserves.


Socioeconomic benefits. Development of oil shale resources could lead to 
the creation of jobs, increases in wealth, and increases in tax and royalty 
payments to federal and state governments for oil produced on their lands. 
The extent of these benefits, however, is unknown at this time because the 
ultimate size of the industry is uncertain.

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The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks 
that lie beneath parts of Colorado, Utah, and Wyoming—contains the 
world’s largest deposits of oil shale. USGS estimates that the Green 
River Formation contains about 3 trillion barrels of oil, and about half 
of this may be recoverable, depending on available technology and 
economic conditions. The Rand Corporation, a nonprofit research 
organization, estimates that 30 to 60 percent of the oil shale in the 
Green River Formation can be recovered. At the midpoint of this 
estimate, almost half of the 3 trillion barrels of oil would be 
recoverable. This is an amount about equal to the entire world’s 
proven oil reserves. The thickest and richest oil shale within the Green 
River Formation exists in the Piceance Basin of northwest Colorado 
and the Uintah Basin of northeast Utah.


Testimonies like this show that wasting huge amounts of time and (tax payers´) money on such technologically underdeveloped, ineffective and expensive energy sources as wind and solar power is sheer stupidity.