US Oil Dominance Will Be Short Lived

The International Energy Agency says North America’s shale boom doesn’t diminish the supremacy of the Middle East in the global oil market

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Matthew Staver / Bloomberg / Getty Images

An oil drilling rig stands on the Bakken formation in Watford City, North Dakota, on October 14, 2011.

The fossil fuel boom underway in the United States has transformed the global energy landscape, with the U.S. poised to eclipse all other countries as the leading producer of oil and gas in the world in 2013. But according to a new report from the International Energy Agency, that dominance will be short lived and doesn’t mark an end to the Middle East’s 40-year-reign as the world’s energy hegemon.

With the revolution in fracking technology opening up new oil and gas resources and improving recovery rates in existing fields, the U.S. is set to play a major role in meeting the worlds oil demand for the rest of the decade. But as the world’s only large-scale source of low-cost oil, “OPEC plays a far greater role after 2020,” the IEA says.

The report also cautions that, though technological advancements pushed up oil and gas production rates, “this does not mean that the world is on the cusp of a new era of oil abundance.” The IEA sees global energy demand increasing by a third from 2011 to 2035. China will account for the most growth in energy consumption in Asia through 2025, but thereafter the IEA sees India and Southeast Asia taking over that role.

For those concerned about the impact of carbon emissions on the global climate, the IEA’s estimates will not be of comfort. The agency sees carbon-dioxide emissions rising by 20 percent through 2035, causing a long-term average temperature increase of 3.6 degrees Celsius, well over the target increase of 2 degrees to mitigate the impact of climate change.