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Despite the fact that part of the Arctic National Wildlife Refuge (ANWR) has been declared open to drilling, low oil prices and abundance of onshore shale deposits makes the Arctic currently less attractive for development, the Executive Director of the International Energy Agency (IEA), Fatih Birol, has told a U.S. Senate committee, adding that he didn’t expect substantial volumes of oil from that region before 2030.
“With the current context, it will be difficult to believe that there will be a substantial amount of oil production coming from that region before 2030, unless we see some surprises in the markets,” Birol told the Senate panel, as carried by Axios.
“We’re going to start drilling in ANWR — one of the largest oil reserves in the world — that for 40 years this country was unable to touch,” U.S. President Donald Trump said after the passing of the tax overhaul that also opened part of ANWR to oil and gas drilling.
But oil companies may not be rushing to drill in northern Alaska, due to the harsh conditions and the high costs associated with venturing into a frontier area where the drilling season is short and development costs high, the Houston Chronicle’s James Osborne writes.
Related: Is The Rig Count Still Relevant?
While IEA’s executive director Birol was not too optimistic about quick oil from ANWR, he said in his written testimony to the U.S. Senate Energy and Natural Resources Committee on Tuesday that even still, the U.S. would become the undisputed global oil and gas leader
“By the mid-2020s, the United States also becomes the world’s largest liquefied natural gas (LNG) exporter and a few years later a net exporter of oil – assuming increasingly stringent fuel economy standards are enacted,” the IEA’s chief said.
“With the United States accounting for 80% of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, our projections suggest that the world’s consumers are not yet ready to say goodbye to the era of oil,” Birol noted.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.