Due to China’s rapid rate of economic growth and urbanisation, it leads the way in the current decade for growth in energy demand. India is anticipated to overtake China in energy demand in the following decade, which is a partial reflection of its rapid population growth. This presents opportunities for companies to export their energy supplies.
World energy growth and demand in coming decades are anticipated to be met by a diverse range of energy sources. The key areas for growth are from technological advances, and include shale gas extraction technologies and renewable energy technology.
As can be observed from the chart, the mix of energy supplies is predominantly from gas and renewables. The middle east remains critical in the long term supply outlook for the global energy industry. The US is anticipated to produce light tight oil and shale and Brazil is set to produce from deepwater oil until 2025. This is where shale producers such as Continental Resources (NYSE:CLR), Whiting Petroleum (NYSE:WLL) and other in the US are well positioned to produce in the next decade.
The increase in shale oil production can be observed graphically below.
Oil – refinery capacity. Net exporters, net importers
The US has traditionally been a net importer of crude oil, as shown by the chart from the IEA. This status may change as extraction technologies for shale oil and gas have now become viable. Domestic supply of oil is projected to continue to grow as a result of new extraction technology. The level of oil production in the US in the coming decade will depend on further enhancements to extraction technologies. By current estimates, the US is set to increase oil production to 7.5 million bpd by 2019. The growth is anticipated to come from onshore shale formations. Production is anticipated to decline after 2020 due to drillers producing in less extractable areas. This increase in domestic production may lead to less reliance on imports. By 2040, tight oil production in the US will account for 33% of total US oil production, at 2 million barrels per day.