It is official. The US will overtake Saudi Arabia to become the world’s top oil producer by 2017.
The International Energy Agency (IEA) said in its world outlook for 2012 this morning that the US will be a net exporter of gas by 2020, with all the vast implications of abundant cheap gas for its chemical, plastics, glass, and steel industries.
“The United States, which currently imports around 20 per cent 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,” it said.
This is entirely due to the shale and gas revolution. North America as a whole will become a significant net exporter.
People were too quick to write off America after the Carter Malaise of the 1970s, and they have been too quick again after the subprime bubble (now largely cleared). As Adam Smith said, there is a lot of ruin in a great nation.
Saudi Arabia will quickly fade as swing force in global energy markets unless it stops gobbling up its own output with such careless abandon. It currently charges 14 cents a litre for petrol and seven cents for diesel at the pump. They give it away.
They should copy to Abu Dhabi and switch to solar power pronto for air conditioning, freeing up oil for exports.
Whether or not the world can supply enough oil to feed the Chinese dragon depends on Iraq.
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