IEA's "World Energy Outlook"
Posted: Tue Nov 13, 2018 9:45 am
IEA is saying the U.S. shale cannot meet future oil demand on it own.
While the geography of energy consumption continues its historic shift to Asia, WEO 2018 finds mixed signals on the pace and direction of change. Oil markets, for instance, are entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s. Demand for natural gas is on the rise, erasing talk of a glut as China emerges as a giant consumer. Solar PV is charging ahead, but other low-carbon technologies and especially efficiency policies still require a big push.
In all cases, governments will have a critical influence in the direction of the future energy system. Under current and planned policies, modeled in the New Policies Scenario, energy demand is set to grow by more than 25% to 2040, requiring more than $2 trillion a year of investment in new energy supply.
The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels. Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years – which would be an historically unprecedented feat.
Summary of the IEA report here: https://www.iea.org/weo2018/
IEA has been expressing concern all year that because of the lack of other large scale oil development projects, the world will face a shortage of oil soon. At some point production from the major U.S. shale plays will peak because there will be so many wells on decline that it will be impossible to drill enough new wells to offset 100s of thousands of wells on decline. We are now completing ~25,000 new horizontal shale wells per year. - Dan
While the geography of energy consumption continues its historic shift to Asia, WEO 2018 finds mixed signals on the pace and direction of change. Oil markets, for instance, are entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s. Demand for natural gas is on the rise, erasing talk of a glut as China emerges as a giant consumer. Solar PV is charging ahead, but other low-carbon technologies and especially efficiency policies still require a big push.
In all cases, governments will have a critical influence in the direction of the future energy system. Under current and planned policies, modeled in the New Policies Scenario, energy demand is set to grow by more than 25% to 2040, requiring more than $2 trillion a year of investment in new energy supply.
The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels. Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years – which would be an historically unprecedented feat.
Summary of the IEA report here: https://www.iea.org/weo2018/
IEA has been expressing concern all year that because of the lack of other large scale oil development projects, the world will face a shortage of oil soon. At some point production from the major U.S. shale plays will peak because there will be so many wells on decline that it will be impossible to drill enough new wells to offset 100s of thousands of wells on decline. We are now completing ~25,000 new horizontal shale wells per year. - Dan