World Imbalance of Natural oil-Key points
-Dr.Debesh Bhowmik
[1]The world has ample proved reserves of oil and natural gas
to meet expected future demand growth. At the end of 2011, global proved
reserves of oil were sufficient to meet 54 years of current (2011) production;
for natural gas that figure is 64 years.
[2]The distribution of global proved reserves of oil and
natural gas – while essential for energy production – is not a good predictor
of the distribution of future production growth. Indeed, the world’s oil and
gas importing regions – Asia Pacific, North America, and Europe – are expected
to contribute a disproportional share of the world’s oil and natural gas
production to 2030.
[3]These
countries sit atop just 16% of global proved reserves of oil and natural gas,
yet they will account for 38% of global production in 2030, and will deliver
one-third of the growth in global production.
[4]We project that the current decade will experience the
most rapid growth in global production of tight oil and shale gas. After 2020,
North American growth is expected to moderate, in part due to current
assessments of the resource base. Continued, but more modest, growth elsewhere
results in slower global production growth in the next decade.
[5]The global understanding of tight oil and shale gas
potential is still evolving, however, and the range of external forecasts
reflects the uncertain landscape. Different views on the North American
resource base – in particular, whether to expect further growth – are the key
factor behind the range of external forecasts. Elsewhere, varying assessments
of above ground issues are another driver of divergent forecasts.
[6]These
uncertainties could result in a significantly higher path for tight oil and
shale gas production – as much as 5 Mb/d and 35 Bcf/d, respectively, by 2030.
Additional supplies would have follow-on implications for the broader outlook:
in the case of oil, for example, by reducing the market requirement for OPEC
crude and boosting spare capacity.
[7]Growing production and flat consumption will see the US
become nearly self-sufficient in energy by 2030. The US will remain a small net
importer of oil, although net imports will decline by about 70%. With net
exports of natural gas and coal, US energy production will reach 99% of
domestic consumption, up from a low of 70% in 2005.
[8]China is on pace to match Europe as the world’s leading
energy importer by 2030, and will replace the US as the world’s largest oil
importing nation by 2017.
[9]However, the growth in Chinese energy imports will be
taking place in a context of robust economic growth. Adjusting the volume of
energy imports for expected economic growth will leave China relatively less
dependent (per unit of GDP) than EU on imported energy.
[10]Other
things equal, the development of energy imbalances point toward a reduction of
global trade imbalances.
[11]Russia will remain the world’s largest energy exporter,
with increases in exports of all fossil fuels. Net energy exports will rise by
25% in volume terms.
[12]By 2030, Saudi Arabia will be the world’s largest oil
exporter, although the trajectory over time will be impacted by the likelihood
of OPEC production cuts discussed earlier. By 2030, oil exports in volume terms
are likely to be 17% above the 2010 level.
[13]As a region, Africa will become an increasingly important
source of fossil fuel exports as well.
[14]Once
again adjusting for expected economic growth, Russia – and the African
countries as a group – are likely to remain significantly less dependent on
energy exports than Saudi Arabia.
[15]Carbon emissions from energy use continue to grow,
increasing by 26% between 2011 and 2030 (1.2% p.a.). We assume continued
tightening in policies to address climate change, yet emissions remain well
above the required path to stabilise the concentration of greenhouse gases at
the level recommended by scientists (450 ppm).
[16]There is some progress: the changing fuel mix, in
particular the rising share of renewables and substitution of coal with gas,
results in a gradual decoupling of emissions growth from primary energy growth.
[17]Carbon emissions continue to fall in the EU – on the back
of carbon abatement policies, support for renewables and declining overall energy
demand – and in the US – driven by falling oil demand (efficiency gains in the
car fleet), renewables in power and the displacement of coal by gas.
[18]The
structural transformation of China’s economy slows its energy demand growth,
especially after 2020 and especially for coal, causing a significant reduction
in the growth of China’s carbon emissions.
