‘Major Second Wave’ of U.S. Fracking Is About to Be Unleashed Upon the World
U.S. oil and natural gas is on the verge of transforming the world’s energy markets for a second time, further undercutting Saudi Arabia and Russia.
The widespread adoption of fracking in the U.S. opened billions of barrels of oil and trillions of cubic feet of natural gas to production and transformed the global energy sector in a matter of a few years. Now, a leading global energy agency says U.S. natural gas is about to do it again.
The International Energy Agency (IEA) said in a new forecast this week that growth in U.S. oil production will cover 80% of new global demand for oil in the next three years. U.S. oil production is expected to increase nearly 30% to 17 million barrels a day by 2023 with much of that growth coming from oil produced through fracking in West Texas.
Republicans politicians and policymakers celebrated the news and sought to take credit for the development. Trump has sought to portray himself as a savior of the U.S. oil and gas industry, opening up federal lands to oil and gas development at a breakneck pace and undoing Obama-era climate regulations.
But analysts attributed the growth in U.S. production to market factors rather than Republican policy. In the report, the IEA forecast that higher oil prices and increased demand from China and India will trigger increased U.S. output to make up the gap. The IEA also predicts that demand for petrochemicals used in plastic will grow overall demand for oil.
“There’s never been a more exciting time in the American energy sector,” Sullivan told oil and gas industry insiders. “The American energy renaissance that so many of you in this room are responsible for is now in full swing.”
A second rise in U.S. oil production comes with significant implications for both the global energy markets and geopolitics more broadly. The U.S. supply of oil and natural gas has contributed to political upheaval in the Middle East, creating new competition for oil exports, and in Russia, a leading supplier of natural gas to Europe.
Alexei Texler, Russia’s first deputy energy minister, acknowledged that U.S. shale “poses certain risk” Tuesday but said his country would continue collaborating with partners in Saudi Arabia and elsewhere in response.
“In a shale revolution world, no country is an island,” said Birol. “Everyone will be affected.”