By Guy Chazan in London
North America will become almost totally self-sufficient in energy in two decades, thanks to a big growth in the production of biofuels, shale gas and unconventional oil, according to BP.
Presenting the company?s Energy Outlook to 2030, BP said North America?s energy deficit would turn into a ?small surplus? by 2030. That contrasts with Europe, whose deficit in natural gas will increase by 65 per cent by 2030 as demand grows and domestic production declines.
?The US is on a path that will greatly reduce its demand for oil imports,? Christof Ruehl, BP?s chief economist, said.
BP?s message will be music to the ears of policymakers in the US, who have long pursued the goal of ?energy independence? and sought to free the country from its reliance on imports of crude from volatile countries in the Middle East.
The US long knew it was sitting on potentially huge reserves of shale gas, but until recently they were considered too difficult and expensive to exploit. The widespread use of hydraulic fracturing – in which huge volumes of water and chemicals are injected at high pressure into dense shale rock to release the hydrocarbons trapped there – has unlocked those supplies. During the past few years, output has soared, and in 2010 the US overtook Russia to become the world?s biggest gas producer.
Now the same techniques that allowed for the successful exploitation of shale gas are being applied to shale oil as well, leading to a big uptick in US domestic crude output. BP said the volume of oil imports in the US was set to fall below 1990s levels, displaced by homegrown shale oil production and ethanol. The US, meanwhile, will also become a net exporter of natural gas.
China, on the other hand, is likely to become much more dependent on imports, as demand growth outpaces domestic supply. Mr Ruehl said that by 2030 it would have to import 80 per cent of its oil, 42 per cent of its gas and a lot of its coal.
That could have huge implications for the global geopolitical balance. China will become just as concerned as the US now is about ensuring the steady, unrestricted flow of oil exports from the Middle East. ?The whole discussion about energy security will shift eastwards,? Mr Ruehl said in an interview.
Overall, BP said, global energy demand would continue to rise during the next two decades, albeit at a slowing annual rate, underpinned by economic growth in China and India. It said world demand would increase by 39 per cent by 2030, or 1.6 per cent annually, with almost all the growth in developing countries: consumption in industrialised nations will rise by just 4 per cent in total.
A big message of BP?s outlook was that the global energy balance will continue to be dominated by fossil fuels, which the company forecasts will account for 81 per cent of demand by 2030, 6 per cent less than current levels.
But renewables, including biofuels, will be the fastest-growing source of energy, rising at an annual rate of more than 8 per cent.
? The Financial Times Limited 2012