Unconventional Oil, Gas to Impact World Energy Market
Strong growth in production from unconventional sources of gas and oil will have a major impact on global energy markets to 2030, redefining expectations for major economies and rebalancing global trade flows, according to BP’s latest Energy Outlook 2030.
The report examines more closely the revolution in shale gas and tight oil – the phenomenon driving America’s energy revival – including its global prospects.
The Outlook’s overall expectation for growth in global energy demand to 2030 is little changed from last year, with demand expected to be 36% higher in 2030 than 2011 and almost all the growth coming from emerging economies. However, expectations of the pattern of supply of this growth are shifting strongly, with unconventional sources – shale gas and tight oil together with heavy oil and biofuels – playing an increasingly important role and, in particular, transforming the energy balance of the US.
Growing production from unconventional sources of oil – tight oil, oil sands and biofuels – is expected to provide all of the net growth in global oil supply to 2020, and over 70% of growth to 2030. By 2030, increasing production and moderating demand will result in the US being 99% self-sufficient in net energy; in 2005 it was only 70% self-sufficient. Meanwhile, with continuing steep economic growth, major emerging economies such as China and India will become increasingly reliant on energy imports. These shifts will have major impacts on trade balances.
Although major shale gas and tight oil resources exist around the world, significant exploitation of these resources has so far taken place only in North America. While advances in technology and high prices offer the potential for development of resources elsewhere, a combination of other factors is also necessary.
The report says that natural gas is expected to be the fastest growing of the fossil fuels – with demand rising at an average of 2% a year. Non-OECD countries will generate 76% of demand growth.
Shale gas supplies are expected to meet 37% of the growth in gas demand and account for 16% of world gas and 53% of US gas production by 2030. North American shale gas production growth is expected to slow after 2020 and production from other regions to increase, but in 2030 North America is still expected to account for 73% of world shale gas production.