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Amid Energy Boom, Report Warns of Unsustainable Path

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The oil and natural gas boom in the U.S. is having far-reaching effects on the global energy landscape, according to the “World Energy Outlook” report released by the International Energy Agency (IEA). The report shows that the U.S. is likely to become the largest global oil producer by about 2020, overtaking Saudi Arabia and Russia, although Saudi Arabia may reclaim that title soon thereafter.

Tower for drilling horizontally into the Marcellus Shale Formation for natural gas, from Pennsylvania Route 118 in eastern Moreland Township, Lycoming County, Penn.
Click to enlarge the image. Credit: Wikimedia Commons.

The IEA is an independent agency headquartered in Paris that conducts energy research and analysis for its 28 member countries, which includes the U.S. The IEA produces the energy outlook report on an annual basis.

The report also projects that the new fuel efficiency measures the Obama administration put into place in the transport sector will combine with increased U.S. oil production to transform the U.S. into a net oil exporter around 2030.

“Energy developments in the United States are profound and their effect will be felt well beyond North America,” the report said. The report cautions that the U.S. and other countries will still be vulnerable to fluctuations in the global market.

The IEA included the warning that the world is not even close to being on a path toward a sustainable energy system that would limit the long-term average global temperature increase to less than 2°C (3.6°F), which most nations agreed to at the 2009 U.N. climate talks in Copenhagen. Instead, the IEA warned that the world is on track for at least a 3.6°C (6.5°F) temperature increase compared to preindustrial levels.

In addition, the report warned that limiting global warming to 2°C is becoming increasingly difficult, if not impossible. It said that a maximum of one-third of the world’s proven fossil fuel reserves can be consumed before 2050 if the 2 degree goal is to be met, unless technology to capture and bury emissions from coal-fired power plants, known as carbon capture and storage technology (CCS), is rapidly and widely deployed. To date, only a few viable commercial-scale CCS projects are up and running worldwide, and its future pace of development is unclear.

After looking at how much climate-warming greenhouse gases, such as carbon dioxide (CO2), can be emitted without pushing the climate system above 2°C of warming, the IEA found that almost four-fifths of the allowable CO2 emissions by 2035 are “already locked-in" by existing infrastructure, such as power plants. If significant actions are not taken by 2017, the report said, then all the allowable CO2 emissions by 2035 would be locked-in by the built energy infrastructure at that time.

“Rapid deployment of energy-efficient technologies . . . would postpone this complete lock-in to 2022, buying time to secure a much needed global agreement to cut greenhouse gas emissions,” the report said.
Based in part on current trends, the IEA forecasted that fossil fuels such as coal, oil, and natural gas will remain the dominant sources of energy through 2035, despite a substantial increase in the use of renewable energy technologies and energy efficiency measures during that period. The IEA called for a focus on removing the barriers that stand in the way of implementing economically viable energy efficiency measures. Just by doing that, the growth in global primary energy demand through 2035 could be cut in half.

The report shows that so-called “unconventional natural gas,” which is recovered from shale deposits through a process known as hydraulic fracturing, or “fracking,” will allow natural gas to overtake oil by 2030 to become the dominant fuel in the U.S. energy mix. However, the report also warned that environmental concerns about fracking, including water pollution and the possibility that the process releases large amounts of greenhouse gases, “could halt the unconventional gas revolution in its tracks” if they are not properly addressed.

Slide illustrating the growth in U.S. unconventional oil and natural gas production.
Click to enlarge the image. Credit: IEA World Energy Outlook.

Regarding renewable energy technologies, the World Energy Outlook projected that by 2035, renewable energy sources such as solar and wind power will provide about one-third of the world’s total electricity output, with solar power growing more rapidly than other renewable energy technologies. By 2035, the report said, renewables will approach coal as the main source of global electricity generation. 

The report also identified water resources as a limiting factor for energy production, with water consumption for energy production increasing by 85 percent by 2035.

“Water is growing in importance as a criterion for assessing the viability of energy projects, as population and economic growth intensify competition for water resources,” the report said. “In some regions, water constraints are already affecting the reliability of existing operations and they will increasingly impose additional costs.”

In the wake of the Fukushima nuclear disaster in Japan, the IEA also forecasted a decrease in the use of nuclear power, which would be offset at least in the short-term by the addition of more heavily polluting power sources, such as coal.

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Comments

By Roger Blanchard (Sault Ste. Marie, MI 49783)
on November 14th, 2012

I assume the IEA is getting their information about U.S. oil production from the U.S. DOE/EIA, which has a terrible record for making projections of future oil production.

In the case of the U.S., outside of the Bakken region of North Dakota as well as Texas, production has declined in the last few years and will this year. Production in the Bakken region of ND is concentrated in 4 counties: Williams, Mountrail, McKenzie and Dunn because that is where the oil is.  The way the industry has increased production is by rapidly increasing the number of wells in the prime production region such that there are over 4000 now in the Bakken region.  The oil industry is rapidly saturating the prime Bakken region with wells.  I’m expecting ND Bakken production to peak in 2014+/- 1 year.

In Texas, most of the increased production is coming from the Eagle Ford formation where production is rapidly increasing.  I’m expecting Eagle Ford production to peak in 2014+/- 1 year.  I expect the U.S. to have a minor peak in 2014+/- 1 year due to the shale oil boom.

Roger Blanchard
Sault Ste. Marie, MI

Reply to this comment

By flakmeister
on November 14th, 2012

Well if it had been termed “All liquids” the report might have had a glimmer of truth… Once you start counting Refinery gains (purely volumetric and predominatly from imported oil), Natural Gas liquids, ethanol as crude oil you can almost get any figure you want…

US crude oil production is roughly 60% of what it was in 1970….

Interested people can follow the discussion at theoildrum.com

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