This week the International Energy Agency (IEA) released their annual World Energy Investment report (WEI), revealing that in 2016 energy investment plummeted by a staggering 12% from the previous year. In 2015, investors poured $1.9 trillion into the energy market, but in the past year investment dropped to a total of just over $1.7 trillion, a concerning prospect as global populations continue to boom, middle classes continue to expand at breakneck paces in places like India and China, and energy demand grows steadily around the world.
Most concerning is the bottoming out of upstream investment, which has plunged a staggering 44% between 2014 and 2016. The IEA is hopeful, however, about a modest rebound in 2017 after this year’s stunning 53% increase in US shale investment and healthy spending in heavy-hitting production regions like the Middle East, Russia, and Mexico. The agency predicts that thanks to this new cash flow, upstream investment will bounce back by 3% before the end of the year.
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Shale oil and gas have exploded in the United States this year, with an extraordinary uptick in production and upstream investment, contrary to global trends. Russia is also going strong as it continues to power the rest of Europe with its massive supplies of oil and natural gas, but it’s looking like their monopoly is finally due for some competition as the U.S. rolls out its first shipments of liquefied natural gas to Europe…