Claims that the shale boom in the US will eventually see the country become energy self-sufficient seems to have received its biggest blow yet after the International Energy Agency, in its latest World Energy Outlook report, stated that shale oil will only be a temporary trend, and very soon the world will return to rely on the Middle East for its oil.
The World Energy Outlook admitted that shale had transformed the global oil industry, and that the light tight oil produced was helping to usher in a new abundance of oil. High oil prices will drive further exploration and production of tight oil “but, by the mid-2020s, non-OPEC production starts to fall back and countries from the Middle East provide most of the increase in global supply.”
Maria van der Hoeven, the executive director of the IEA, said that “there is a huge growth in light tight oil, that it will peak around 2020, and then it will plateau.
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We expect the Middle East will come back and be a very important producer and exporter of oil, just because there are huge resources of low-cost light oil. Light tight oil is not low-cost oil.”
An earlier report released by the US Energy Department’s Energy Information Administration, also suggested that US tight oil production will be high until the end of the decade, and then quickly fall off.
The NY Times wrote that the energy outlook has attempted to make predictions about the energy industry up until 2035, expecting no new energy breakthroughs, although it believes that costs will continue to fall for renewable energy.
The report states that solar and wind power will peak and then see investment sharply drop off as it remains difficult to connect them to the grid due to the inability to predict or control the varying amounts of power that they produce.
Supposedly by 2035 renewable energy will account for 18% of global energy produced, up from 13% in 2011, and that the growth would be even higher if it were not for the fact that many households are replacing wood (considered a renewable source) stoves for cooking or heating in favour of fossil fuels such as natural gas.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com