A recent report by the International Energy Agency ('IEA') stated a dramatic shift the energy ranking of the United States. Increased oil production credited to advanced recovery technology, and the unlocking of the Bakken Formation in North Dakota and Montana, is said to give the USA enough of a boost over the next twenty years, that the country will overtake Saudi Arabia as the world's top oil producer. This trend has led the Paris-based IEA to state its belief that the USA will be energy self-sufficient by as near as 2035.
Dubbed "a pronounced shift" by the report, the USA's trend can be seen as a positive sign for both sides of the energy debate. For instance, the environmental left may see the idea of energy self-sufficiency as a sign that their initiatives are working, while the right may see it as a victory for the suppliers. However, the report by no means is implying that the USA will be oil independent, it is saying that it'll be energy self-sufficient.
When factoring in the impacts of coal, nuclear, wind, solar, other alternative energy sources, the gap gets closed on energy needs for a country. But, the needs for petroleum are beyond just energy. Plastics in our toys, gadgets, and homes will remain in high demand beyond 2035, Petrochemicals involved in the pharmaceutical industry are going to have their work cut out for them with the tale end of the baby boomer generation into geriatric stages. The USA will certainly be able to keep the lights on, on its own. That doesn't mean that it won't need to keep its oil supplying friends to the north in Canada in the dark.
Canada was the United States' biggest crude supplier last year, providing nearly 30% of total imports, ahead of Saudi Arabia, Venezuela, Nigeria and Mexico. That came to a registered total of 2.4 million barrels per day. Now that the election is over, and Obama doesn't have to worry about another one, it's fair to say that the Keystone XL pipeline stands more than a fair chance of getting approved in its upcoming federal decision.
The truth is not only that the United States will still be very oil dependent, but its thirst for Canadian oil will continue to need quenching. There's a stark difference between energy self sufficient and oil dependent. t
Energy imports currently account for 20% of US energy consumption. Bridging that gap in 20 years would be quite a feat, should the US fulfill the IEA's prophecy. The report also predicts a growth in world demand by a third in 20 years, while imagining that Western consumption will somehow remain stagnant.Both the CBC and the Calgary Herald are calming Canadian investors and citizens by both stating that this inevitably is good for Canada.
Increased demand from Asia will someday prevail in getting Canada to open its doors to global export of more of our natural resources. The United States will continue to raise its domestic production levels, but the increased consumption of petroleum will continue to outpace production.
It's certainly good news to see that the world's largest superpower is on the right track, and that energy doom is not on the horizon. This is not, however, a signal that the pipelines heading into the country will be shut off any time soon.
G. Joel Chury Editor