Crude oil and natural gas production from the U.S. shale patch will top Russia’s combined oil and gas output by 2025, the International Energy Agency said in the 2019 edition of its World Energy Outlook.
Under its Stated Policy Scenario, the IEA said, the U.S. will account for the overwhelming bulk of global oil production growth, at 85 percent, by 2030. It will also account for 30 percent of the global natural gas production growth in that period.
With all this happening, it’s no wonder the United States will undermine OPEC’s and Russia’s share of the global oil and gas market, according to the IEA. The agency said that it expected growing U.S. production to bring down OPEC’s and Russia’s combined share of the oil market to 47 percent in 2030 from 55 percent in 2005.
The IEA also expects global energy demand to grow at the modest rate of 1 percent annually through 2040. About 50 percent of this growth will be satisfied by renewable energy sources, the agency said, chief among them solar power. A third of this growing demand will be satisfied by natural gas. Oil demand, according to the IEA, will plateau in the 2030s.
The IEA also envisages a Sustainable Development Scenario, in which renewables growth will be stronger and emission cuts deeper, which will affect demand for both oil and gas.
Related: Iran Admits: Tanking Oil Revenue Cripples Country
Interestingly enough, despite its stated unconditional support for climate change goals, the IEA has recently come under fire from environmentalist groups that include investors, scientists, and even former UN diplomats, Reuters reported this week.
“The IEA is effectively creating its own reality. They project ever-increasing demand for fossil fuels, which in turn justifies greater investments in supply, making it harder for the energy system to change,” said Andrew Logan, an executive with a U.S. nonprofit, Ceres.
In response, the IEA’s Fatih Birol said, “If they criticize us, the only option that comes to my mind is that they don’t know exactly what we are doing. They must be misunderstanding, or they must have been misled.”
By Irina Slav for Oilprice.com
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Given the development of Russia’s huge oil and gas reserves in the Arctic and a projected steep decline in US shale oil and gas production, the combined Russian oil and gas production by 2025 is projected to average 12.00 million barrels a day of oil (mbd) and 2.15 million barrels oil equivalent (mboe) of natural gas giving a combined total of 14.15 mboe compared with a projected US oil production of 9.00 mbd and 2.60 mboe of gas giving a total of 11.60 mboe.
And contrary to claims by the IEA, the combined OPEC and Russia’s share in global oil production would have grown from 55.6% in 2018 according to the 2019 BP Statistical Review of World Energy to a projected 62% by 2030 whilst US share would have declined from 13.18% in 2018 to 9.23%.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
We should be thinking about how to use less, not inflate expectations unrealistically about more.