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USA world's biggest oil producer in 2017, overtaking Saudi Arabia and Russia

Discussion in 'The Americas' started by satz, Jan 9, 2013.

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  1. satz

    satz Captain SENIOR MEMBER

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    Shale gas boom rewrites geopolitical rules, as US is set to produce more petroleum than Saudi Arabia within a decade.:shocked:


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    Some industry veterans believe it's the biggest development in the energy game since 1859, when the first US oil well gushed from beneath the earth in Titusville, Pennsylvania.

    In changes that would have been unthinkable just five years ago, the US is set to become a net energy exporter in the next few years, thanks to the controversial process of fracking that is re-wiring geopolitics and the world of energy.

    The practice of shooting steam and chemicals into shale rock formations to unlock energy sources previously considered marginal has "changed the world", according to one lawyer with more than 40 years of experience negotiating natural gas contracts.

    "We are talking about increases [in natural gas production] of 15 to 20 percent per year," George Washington University law professor Richard Pierce told Al Jazeera. "The US is now 100 percent independent in natural gas and within the next half a dozen years [North America] will be independent in oil. It will become a global supplier, rather than a demander, in a hurry."

    'Once-in-a-lifetime experience'

    New technologies to access hard-to-reach fuels mean that, in 2012, the United States experienced its largest rise in annual oil output since the middle of the 19th century, according to data from the US Energy Information Administration (EIA) released in December. Shale gas is a fossil fuel trapped inside formations of shale rock. Some of these formations also contain oil.

    The expected 760,000 barrel-per-day increase in US crude oil production in 2012 is the largest rise in annual output since the beginning of US commercial oil extraction in 1859, an EIA official said in a statement."This is a once in a lifetime thing we are experiencing now," Paul Faeth, a senior fellow with the CNA research organisation, told Al Jazeera. "The chemical industry is moving back to the US [because of cheap gas] and demand will increase because of low prices."

    The gas boom has led to about $90bn in new investments in related US industries over the past two years, including steel manufacturing, petrochemicals production and fertiliser fabrication, according to Dow Chemical's calculations.

    Since 2005, more than $125bn has been spent on shale extraction, including drilling and purchasing land, by the 50 largest US oil and gas companies, according to a study by Ernst and Young.

    High prices over the past decade, the flow of petroleum from east to west, and the gush of money the other way has allowed Russia to re-assert its international clout and Gulf states to build up massive sovereign wealth funds. The shale boom has the potential to derail those trends.

    In 2011, members of the Organisation of Petroleum Exporting countries (OPEC) earned $1,026bn in net oil export revenue, a 33 percent increase over 2010, the US Energy Information Adminisiration reported in May. If the price of oil drops because of new supplies, or if natural gas starts to eat into demand for traditional crude, oil-rich nations could potentially find themselves significantly less well-off.

    "There will be significant impacts for security and global politics," Faeth said of the shale boom.

    Blue-eyed 'sheikhs'

    Thanks largely to fracking, the US is set to overtake Saudi Arabia and Russia to become the world's biggest oil producer by 2017, according to a November report from the International Energy Agency (IEA).

    Should gas-dependent leaders, including Russia's Vladimir Putin or the Emir of Qatar, be worried? Will the wealth and power of steely-eyed ex-KGB agents or white-robed sheikhs be overshadowed by a rebirth of the American oil man - a new breed of Beverly Hillbilly?

    "In the medium term, I think Qatar and Russia are okay," Frank Asche, professor of risk management at the University of Stavanger in Norway, told Al Jazeera. "Not [just] because they sell to customers on long-term contracts, but because the infrastructure is there."

    Transporting natural gas around the world is more difficult than moving oil. Russia has pipelines running to Western Europe, while Qatar - the world's largest natural gas exporter - has shipping terminals in key Asian markets.

    Oil has a single, global price. But because of transportation challenges, the cost of natural gas varies widely between markets: Japan pays more than five times as much for natural gas compared with the US, according to some estimates. But that could change as new reserves are found and technologies advance.

    "I think we are moving closer to a global natural gas market," Asche said. "It's only a matter of time, I think, until you see something like a big super-tanker that can carry LNG (liquefied natural gas) around the world."


    Fault Lines: Fracking in America

    In the short-term, when prices are dependent on geography, the US is hardly alone in tapping into shale formations for domestic consumption. Other states that traditionally imported much of their gas, including Australia, Argentina, South Africa, Poland and China are also looking to cash in on the shale boom. But for now, the US is benefiting the most from the recent gas gush.

    Water 'crisis'

    Environmentalists and some analysts, however, caution that jubilant predictions from a country that consumes some 25 percent of the world's oil will run into environmental constraints including global warming and a lack of fresh water.

    "There is no question that fresh water is going to be a serious concern… the water crisis will be the next big crisis people will have to confront everywhere in the world in the next few decades," Pierce, the energy lawyer and professor, said. "Limits on fresh water, to a certain extent, will be the determining limit on fracking capability… how serious a limit is hard to say."

    Extracting gas from one well through fracking takes about five million gallons of water, the equivalent of between 800 and 1,300 truckloads, said energy consultant Faeth. Over its lifespan, an average well produces more than 4 billion cubic feet of gas equivilent - enough energy to power about 16,000,000 homes for one day. Mixed with chemicals, much of the water ends up contaminated after being used in the fracking process. One well will often need to be fracked up to 18 times, drastically increasing water contamination.

    "The industry is not that transparent; we don't know exactly how much water is being used in different places," Lorne Stockman, research director of advocacy group Oil Change International, told Al Jazeera. "Public discomfort with the fracking boom is growing, especially in states like Ohio… I can't say if it will come to a head."

    Despite concerns about water quality, energy companies and supporters of unconventional gas extraction say the process is good for the environment, as it means "dirty" coal could be replaced by gas in power plants and other facilities.

    The jury is still out on whether that's correct.

    A study released in the journal Nature earlier this month found that fracking operations in Utah and Colorado leak about nine percent of the total methane contained in the wells. Methane, the chief component of natural gas, is a far worse contributor to global warming compared with carbon dioxide, and the figure of nine percent claimed by the study is higher than previously thought.

    "The methane emissions matter a lot in the broader scheme of things," Faeth said. "If the study is right, the impacts of unconventional gas [on the climate] would not be positive compared to coal… [For environmental problems] gas will not be the long-term solution."

    The fracking process, which forces steam and chemcials into rock formations, has also been known to cause earthquakes in Ohio, the UK and other regions.

    Pressure on renewables

    The gas boom could actually hurt sustainability in the long-term, as investment capital needed to finance research into solar, geothermal and wind energy is diverted to drill for gas in middle America.

    If natural gas prices remain reasonably stable, banks can get a guaranteed return on capital invested in extraction, making the shale game a reasonably safe bet that is popular with Wall Street. New, renewable technologies, on the other hand, often take years of research before they come to market and a return on investment is not guaranteed. Often pioneered by small start-ups, the next energy game-changer could miss out on funding opporunities, as the big players are busy tapping shale deposits.

    In some respects, the industry has been a victim of its own success in the short-term; natural gas prices in some areas are down more than 50 percent since the middle of 2008, due to new supplies coming into the market.

    "In the power sector, cheap gas has hurt renewables to some degree," Faeth said.

    Through 2013, analysts do not expect a lot of wells to be drilled in new fields, as producers focus on oil development and exploiting existing wells. This slight downturn, however, is unlikely to last for too long.

    If prices stay low, power plants and petrochemical facilities are likely to buy more gas to fuel their industries, thus leading to more demand and higher prices. The key element over the long-term is that major reserves have been unlocked in an area previously thought to have hit its "peak" production, analysts said.

    'Leave it in the ground'

    Traders in New York and wildcat drillers in Pennsylvania might be celebrating the newly minted resources, as are security hawks who relish the idea of reducing US energy dependency on the Middle East.

    But there is near-universal consensus among scientists and policymakers that these new resources should be left in the ground.

    "No more than one-third of proven fossil fuels can be consumed prior to 2050 if the world is to achieve the two degrees Celsius goal" - the limit for averting catastrophic climate change - according to International Energy Agency data released in November. The IEA is hardly Greenpeace, and predictions from the IEA, an industry-backed body, should be taken seriously, environmentalist campaigners said.

    Leaving massive amounts of cheap natural gas untouched, however, will be nearly impossible for politicians in the US and beyond who are keen to jumpstart recession-battered economies and end dependence on foreign energy sources.

    "The advantages gained geopolitically [for the US] by these new sources are small compared to the disadvantages of remaining dependent on oil as a source of energy given the threat of climate change," Stockman said.

    "You can't separate climate change from discussions about global security. We have far more oil, gas and coal than we can afford to burn if we are going to avoid catastrophic climate change."

    ReF:-US to become 'net energy exporter' - Features - Al Jazeera English
     
  2. satz

    satz Captain SENIOR MEMBER

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    With reducing imports from US and with more production of oil, can we expect to see oil prices go down in future.

    good times have started for the middle east as they depend heavily on oil money for yearly budget..


    Are we going to see more powerful america in the future. whats it for india, is it good or bad.
     
    Last edited: Jan 9, 2013
  3. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    This is one expert prediction......The shale boom has certainly reversed the production trend in the US and there are plenty of potential shale fields around the globe that could prove, in time, to be highly productive. However, many analysts have pointed out that a replication of the success of the US shale industry is unlikely and that “the rest of the non-OPEC countries have clearly underperformed, and output is lower than expected.â€￾

    At present however, the trend seems to be favouring those predictions towards the lower end of the spectrum with futures for December 2019 currently valued at around the US$ 91 mark.

    Its looking good thru 2020.
     
  4. Skull and Bones

    Skull and Bones Doctor Death Staff Member MODERATOR

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    More proven energy resources are in Russia, that ensures these two power to be in the top in the foreseeable future.
     
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  5. satz

    satz Captain SENIOR MEMBER

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    During the year 2012 USA has reduced 20% of there import, if they continue at this range they will be energy independent by 2017. The Opec countries have asked US to keep the oil prices at 90$ but by the prediction it might go down to 70$ which is a major concern for them. India too have planned to invest in shale energy they have invested in US, cannada also planning to use shale technology inside the country. there were proven reserves inside India in the places of Gujarat, Andhra, Assam, Arunachal and a huge reserve in and around srilanka & IO region.

    India should learn to tap the abundant solar power available through out the year also develop nuclear energy. thus we can go greener and secure energy. Its high time we stop spending our hard earned money on oil's to these White robbers Sheik. :drag:
     
  6. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    White, sounds a little racist.
     
  7. satz

    satz Captain SENIOR MEMBER

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    i meant there white gown and Towel hat there traditional arab wear. if you think that is racist then you are wrong i didn't mean it.
     
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  8. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    I was just curious, you seem sharper then most on here.
     
  9. satz

    satz Captain SENIOR MEMBER

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    My target is to make India self-reliant in fuel by 2030: Veerappa Moily, petroleum minister

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    less than three months since he took charge as petroleum minister, Veerappa Moily has been able to resolve several controversial issues in the oil and gas sector. He has approved raising crude oil output from the Barmer oilfield and convinced private oil and gas operators to accept CAG audits of their books. Recently, he implemented decontrol of diesel pricing, a decision that was pending for more than two years. In an exclusive conversation, the minister told ET's Nistula Hebbar and Rajeev Jayaswal that he is now preparing a roadmap to cut India's energy imports by 50% in next seven years to make India self-reliant by 2030.

    What are you doing to raise oil and gas production to reduce India's import dependence?

    We have conventional hydrocarbons, shale gas and coal bed methane (CBM) resources. The need is to expedite exploration and production through right policy decisions that would encourage innovation and investments. We will constitute an expert panel, which will suggest the road map. My target is to reduce oil imports by 50% by 2020, 75% by 2025 and 100% by 2030. If China and Australia can do this in six years, why can't we? We will have aggressive acquisition strategy for oil and gas assets abroad. We will set up more LNG terminals. GailBSE -4.47 % is setting up pipelines across the country. Pipelines are up to the Pakistan boarder. We are planning to import gas from Turkmenistan.

    Who will be the new petroleum secretary after GC Chaturvedi retires this month?

    It is the prerogative of the Prime Minister. I don't have any particular preference. PM will make the right choice. All I need is positive mindset. I believe that you should mine your mind-set first before you mine minefields.

    The government recently allowed oil companies to fix diesel prices and mandated them to sell the fuel at market rates to bulk consumers such as Railways, defence establishments and state transport corporations. Is diesel dual pricing is feasible?

    There is no dual pricing. Bulk users, who consume about 18% of total diesel consumption, will pay full price from now. This will reduce subsidy burden on the fuel, which is 96,000 crore this year. This will also encourage competition in the sector which is good for the oil sector and good for the country as well.

    Is government firm on its decision on diesel? Private fuel retailers are apprehensive to take bold business decisions to re-open their pumps because they are uncertain about government's fuel retail policy?

    I don't think that there will be uncertainty. The government has taken the decision to give pricing freedom to oil companies. It is similar to petrol pricing. Oil companies fix petrol rates as market fluctuates. They recently reduced petrol prices by 25 paise.

    Currently, petrol and diesel are prices on the basis of trade parity pricing formula. Is government considering changing the formula by shifting to export parity pricing?

    This decision has to be taken by the finance ministry. It's their domain.

    The petroleum ministry has taken decision of future oil and gas contracts and prices of natural gas. But no decision has been taken on coal bed methane (CBM) pricing, why?

    The matter is still pending with the Rangarajan Committee. Until it gives its recommendations, we will treat CBM on a par with natural gas, because it is also gas but from a different source. Meanwhile, with the coal ministry, we are finetuning CBM policy so that blocks under CILBSE -0.27 % can also be used for CBM production. I had a meeting with the coal minister and the coal secretary on this. The coal ministry is to send us its comments in 20 days.

    ReF:-My target is to make India self-reliant in fuel by 2030: Veerappa Moily, petroleum minister - The Economic Times
     
  10. Picdelamirand-oil

    Picdelamirand-oil Lt. Colonel MILITARY STRATEGIST

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    http://www.indiandefence.com/forums/members-room/22205-energy-climate-post251090.html#post251090
     
  11. MiG-23MLD

    MiG-23MLD Major SENIOR MEMBER

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    i hope india goes green, and teach a lesson to the world, oil only pollutes i preffer greener tech.

    Good luck my friend i wish you the best
     
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  12. satz

    satz Captain SENIOR MEMBER

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    Compared to china we use more greener tech. our industry and building operate and adopt more environmental friendly techniques but USA is more adamant and still wants to pollute the world.
     
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