FT Adviser: Unconventional energy’s power

One of the key drivers of the US economic recovery in recent years has been the so-called ‘energy revolution’, as new technology and improved ‘fracking’ techniques have allowed access to unconventional energy reserves.

This boom in energy production in the past few years has had a number of effects, both within the US and the wider energy market. It has also meant the idea of ‘energy independence’ for the country could eventually become a reality.

In its latest Medium-Term Oil Market Report 2014, the International Energy Agency (IEA) points out: “Less than 10 years ago, the US was the world’s largest importer of refined products, with 2.5 million barrels a day (mb/d) of product inflows in 2005. Today it has become the world’s largest liquids producer, ahead of Saudi Arabia and Russia, as well as its largest product exporter. By the end of the decade, North America as a whole will have achieved energy ‘independence’ and have become a net oil exporter with net crude imports projected at 2.6 mb/d and potential net product exports of around 3.5 mb/d.”

In that sense the outlook for the US energy market seems appealing, and the boom in both gas and oil in recent years has helped to offset the volatility seen in traditional energy markets, such as the Middle East, where supply has been disrupted by events such as the Arab Spring and the civil war in Syria.
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