World Energy Outlook is a dry, statistics-laden annual that rarely generates much heat outside the energy sector. But the 2012 edition, published in November, made international headlines with its prediction that by utilizing new extractive technologies to exploit oil and natural gas reserves once considered inaccessible, the United States would surpass Saudi Arabia as the world’s top oil producer by 2020 and, in partnership with Canada, would become a net oil exporter by 2030. These gains, the International Energy Agency (IEA) observed, would have significant economic and geopolitical implications: “Energy developments in the United States are profound and their effect will be felt well beyond North America—and the energy sector.” By approaching self-sufficiency in the production of oil, the report suggested, the United States will acquire greater clout in international affairs at a time when its rivals—including China—risk losing influence due to a growing reliance on oil imports.
A few weeks after the report’s release, its narrative of American triumphalism was reinforced when the National Intelligence Council (NIC)—an independent arm of the intelligence community that focuses on long-range perils—issued a quadrennial assessment of future international developments, Global Trends 2030: Alternative Worlds. Among the claims that garnered the greatest attention was the prediction that “energy independence is not unrealistic for the US in as short a period as 10–20 years,” and that during the next fifteen to twenty years there will be “a huge growth of the global middle class,” resulting in increased economic innovation along with a clamorous demand for democracy and individual rights—all to the greater advantage of the United States. Resources Futures, produced by a team of analysts at Chatham House in London and published in December 2012, draws similar conclusions. Although a bit less sanguine than the other two agencies about the prospects for satisfying anticipated world resource needs, Chatham House is largely convinced that the extractive industries—private and state-owned—are capable of meeting future energy demand if sufficient investment is directed toward this sector and greater efficiencies are practiced in the consumption of vital materials.
In contrast to the many analysts who have been predicting that global oil output will soon reach a “peak” and then subside (followed, a decade or so later, by a peak in natural gas production), the three assessments see a significant increase in future oil and gas production. Actually, there has been a peak in oil output—but only of easily acquired “conventional” oil, the sort that comes gushing out of the earth in liquid form when a drill strikes a porous oil-bearing formation. But so much additional oil is being acquired from “unconventional” sources—shale rock, Canadian tar sands, Arctic and deep-offshore reserves—that the total supply continues to increase. According to the IEA, global output of conventional crude oil will rise slightly over the next few years before commencing an irreversible decline, while the output of unconventional oil will soar by 238 percent, from 3.9 million to 13.2 million barrels per day.
The picture for natural gas is roughly identical. Only a few years ago, energy analysts were predicting an imminent shortage in North American gas supplies, and there was talk of plans to build multiple facilities for the importation of liquefied natural gas (LNG) from Africa, Russia and the Middle East. Then came the “shale gas revolution,” or the use of hydraulic fracturing (also known as hydro-fracking or, simply, fracking) to extract natural gas from shale formations in Texas, Arkansas, Pennsylvania and neighboring states. The US Department of Energy says that unconventional gas provides about 34 percent of domestic gas output, up from zero a few years ago, and is expected to reach 50 percent by 2040. With so much additional gas entering the market, US producers are again talking about building new LNG facilities—but this time for exporting gas. And according to the Energy Department, as fracking techniques are applied to shale formations elsewhere in the world, unconventional output will boost gas supplies on a global basis, eliminating any risks of future shortages.