And a darn good thing it is, too. The International Energy Agency’s researchers have in previous reports noted that they were counting on an acceleration in oil production from Iraq as a pretty clutch factor in the global formula that determines oil prices; Iraq’s major energy hubs don’t seem to be in any immediate danger, but sans that hoped-for output acceleration or even just with stagnant output, growing global demand could start sending prices upward in a big way — and Iraq is hardly the only traditional supplier struggling with political instability and investment problems.
It’s encouraging news, then, that the United States is on track to become the world’ biggest oil exporter by 2020 — and even better, that other countries with potential shale deposits are now moving more quickly than expected on adopting the hydraulic fracturing and horizontal drilling techniques that have helped us get there.
In its most recent analysis, which takes a five-year view of the oil market, the IEA predicted that tight oil production from outside the U.S. could account for 650,000 barrels a day of global oil supply by 2019.
Although that is just a fraction of the 5 million barrels a day the U.S. is expected to produce from its shale oil fields by 2019, it highlights the continuing impact techniques like fracking are likely to have in helping increase global oil supply even toward the end of the decade when the IEA expects U.S. oil production growth to plateau.
Indeed, by some estimates, the U.S. contains no more than 15% of the world’s total shale and light tight oil resources, but the impact of their development on the oil market is already profound. By the end of the decade the IEA expects North America to produce 20% of the world’s oil supply and to have become a “titan of unprecedented proportions” in oil product markets as its exports of refined products soar.
Other countries might not have the resources or the geology (not to mention the relative regulatory and investment freedom, because of their own self-imposed folly) to replicate our shale boom, but it’s pretty amazing to remember that just a few years ago, nobody was expecting this miraculous turnaround — and that it’s happened largely outside of the Obama administration’s purview.