According to a report released by the International Energy Agency (IEA) on Tuesday, the growth of energy production in the United States is expected to double in the next eight year, just as it has doubled over the last eight years. The report declared: “A remarkable ability to unlock new resources cost-effectively pushes combined United States oil and gas output to a level 50% higher than any other country ever managed; already a net exporter of [natural] gas, the U.S. becomes a net exporter of oil in the late 2020s. In our projections … the rise in US tight oil output [fracking] from 2010 to 2025 would match the highest maintained period of oil output growth by a single country in the history of oil markets.”
Currently, the production increase in the U.S. constitutes 80 percent of the increase in oil production expected from all petroleum-producing countries combined. According to the IEA report, this will have the effect keeping oil prices “lower for longer … within a $50-70/barrel range [all the way out to] 2040.”
The World Bank projects a global population growth rate of 3.4 percent per year through 2040 -- growing from the 7.4 billion people present today to more than nine billion. Global poverty levels dropped below 10 percent in 2015 for the first time in history, according to the World Bank, which did not credit lower energy costs for the improvement. Improvement in worldwide earnings, and pulling people out of poverty, will depend on a goodly supply of cheap energy, especially petroleum.
That is where the United States fits in.
On Tuesday, IEA Director Fatih Biroi told Bloomberg television: “The United States will be the undisputed leader of global oil and gas markets for decades to come. There’s big growth coming from shale oil … [increasing the] difference between the U.S. and other producers.” America’s ability to quickly respond to fluctuations in oil and natural gas prices that ensures its future dominance, Biroi said. Biroi added, that America’s energy industry “has emerged from its trial-by-fire as a leaner and hungrier version of its former self, remarkably resilient and [able to] react to any sign of higher prices caused by OPEC.”
Other reasons for Americans being bullish about their energy sector are that OPEC continues to diminish as a world player. Saudi Arabia, which dominates OPEC, has continuously called on fellow members to sell their oil at the level of $60 per barrel, at least in order to stop the hemorraging of their various collectivist states. Low prices have had a significant impact on Venezuela, where low oil prices have collapsed the economy. As a result, the authoritarian regime of Venezuelan President Nicolas Maduro has not been able to pay its bills or stem inflation. If he is removed from office, and his political cronies replaced by qualified experts at his PvDSA state-owned oil company, oil may start flowing. Currently, PvDSA is currently operating at only 50 percent capacity. If it goes back on line, world prices could drop further.
As petroleum and natural gas prices continue to drop, consumers all over the world will benefit and poverty may decrease. Low oil prices may spur development in the U.S., which may soon become self-sufficient in energy and thus a net exporter of petroleum and natural gas. This will disrupt Russia’s stranglehold on European consumers of its natural gas, and also have an impact on countries such as Iran and Saudi Arabia. A global economic expansion fueled by low prices and American oil may obviate free trade agreements and globalist organizations such as the United Nations.