IEA: Medium Term Oil OutlookOctober 12, 2012
Yesterday, I wrote about Michael Klare’s dismissal of the ability of unconventional oil and gas supplies to fuel a second generation of fossil fuel economic development. Klare’s piece was long on assertion and short on analysis. Today, the International Energy Agency has released its Medium Term Oil Market Report for 2012 that forcefully rebukes Klare’s position. The report paints a map of energy geopolitics that is rapidly changing from the one the world has grown comfortable with over the last several decades. Multiple developments (increasing demand in developing nations, decreasing demand in the OECD (especially Europe), increased production in some regions and declining production in others) are contributing to this change. One key change is the growing dependence of China on imported fossil fuels, and particularly a growing dependence on Russia. This means that, while Russia’s energeopolitical influence is waning in the West, it is growing in the East. But, the single most important development – and the one that directly confronts Klare’s argument – is that the Western Hemisphere in general is nearing energy self sufficiency, and North America in particular may become a net exporter of both oil & gas and associated refined products. They do not go as far as I have, but I repeat my belief that it is possible that within two decades, the United States can become at once the worlds greatest user, producer, and exporter of fossil fuels.