Drastic changes seen in global energy landscape

The US moving into energy self-sufficiency has become headline news in leading newspapers around the world in recent days, he said.
“The US has imported a significant chunk of oil from the Middle East but very soon, it will go to minimal, if not zero. So, the US may not need Middle East oil anymore. This will send implications to the oil market and maybe beyond the oil market,” the IEA expert told a conference hosted by the Energy Ministry in Bangkok.
On the sidelines of the seminar, Birol declined to say if the US’ independence from Middle East oil would mean more or less stability in oil prices. However, with the high production cost of shale gas, it is less likely that oil prices will fall, even though the US, Canada and Iraq are increasing their oil and gas production. “It would be a big surprise if there is a big drop in oil prices,” he told The Nation. Birol said the IEA’s World Energy Outlook 2012 released at the Bangkok conference revealed that the foundations of the global energy system are shifting rapidly due to three key drivers – surprisingly strong growth in oil and gas production in some countries, particularly the US, Canada and Iraq; the review of nuclear projects by many countries after the nuclear accident in Japan; and the progress in energy efficiency initiatives in the US, European Union and other markets.
The liberalisation of the Iraqi oil industry has led to a boom in oil production, which is set to double from 3 million barrels a day currently to 6 million in a few years, and a major revolution is happening in the world energy industry.
Production of oil and gas from unconventional sources is growing, thanks to the development of new technologies in petroleum exploration and production, especially those involved in shale gas extraction.
“In 2017 or the next five years, the US will become the largest oil producer in the world. This is something [previously] unimaginable by many people. Because of the so-called shale gas discoveries, by 2015 the US will clearly overtake Russia as the largest natural gas exporter,” he told the conference.
In 20 years, 45 per cent of oil production growth worldwide will come from Iraq alone. China now has a special interest in Iraq, holding directly or indirectly 30 per cent of all oil wells in the nation.
“There will be a growth of the trading link I call ‘B-to-B’, the Baghdad-Beijing relationship,” he said.
While the US decreases or ceases its energy dependence on the Gulf countries, Asia will take the lion’s share of 90 per cent of all oil exports from the Middle East, according to the IEA study.
Excepting the US, most countries and regions including Asean, the EU and India and China will have to import more oil and gas, making their economies and foreign policies more vulnerable to development in the energy markets.
The Thai government should be praised for emphasising energy efficiency. Worldwide, energy subsidies increased by 30 per cent to US$523 billion (about Bt16 trillion) this year. After going up for each of the past 10 years, investment in renewable energy declined this year, he added.