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Shale Boom to Turn US Into World's Largest Oil Produce

Shale Shock Shifts Geopolitics



A shale oil boom means the U.S. will overtake Saudi Arabia as the world's largest oil producer by 2020, a radical shift that could profoundly transform not just the world's energy supplies, but also its geopolitics, the International Energy Agency said Monday. This major shift will be driven by the faster-than-expected development of hydrocarbon resources locked in shale and other tight rock that have just started to be unlocked by a new combination of technologies called hydraulic fracturing. --Benoit Faucon, The Wall Street Journal, 12 November 2012
Some in the U.S. are already questioning the reasons for keeping U.S. warships in the Persian Gulf. "It's insane that we have the Fifth Fleet of the U.S. Navy tied up there to protect oil that ends up in China and Europe," T. Boone Pickens, chief executive of energy-focused hedge fund BP Capital Management, was quoted as saying last week in U.S. magazine Parade. --Benoit Faucon, The Wall Street Journal, 12 November 2012 OPEC acknowledged for the first time on Thursday that technology for extracting oil and gas from shale is changing the global supply picture significantly, and said demand for crude will rise more slowly than it had previously expected. In its annual World Oil Outlook, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters’ group. “Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects,” the Organization of the Petroleum Exporting Countries said in the report. --Alex Lawler, Reuters, 8 November, 2012

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A half mile below the ground at Prudhoe Bay, above the vast oil field that helped trigger construction of the trans-Alaska pipeline, a drill rig has tapped what might one day be the next big energy source. The Department of Energy and industry partners over two winters drilled into a reservoir of methane hydrate. The world has a lot of methane hydrate. A Minerals Management Service study in 2008 estimated methane hydrate resources in the northern Gulf of Mexico at 21,000 trillion cubic feet, or 100 times current U.S. reserves of natural gas. The combined energy content of methane hydrate may exceed all other known fossil fuels, according to the DOE. --Associated Press, 12 November 2012 Looking at Tuesday’s election results, it’s clear the United States has morphed into five distinct political nations. In political terms there are two solid blue nations, perched on opposite coasts, that have formed a large and powerful bloc. Opposing them are two almost equally red countries, which include the historic Confederacy as well as the vast open reaches between the Texas panhandle and the Canadian border. Between these two largely immovable blocs stands the fifth nation – essentially the Great Lakes industrial heartland. By winning this territory – which could be called “Bailout Nation” – President Barack Obama built a winning coalition. Though this part of the country has suffered economic decline and demographic stagnation for decades, it is now emerging, as former President George W. Bush would put it, as “the decider” of America’s political fate. --Joel Kotkin, Reuters, 8 November 2012 Energy costs are stifling growth across the North East, according to a study by the region’s largest business membership organisation. Over a third of members responding to a North East Chamber of Commerce survey felt that the increase in costs were hampering recovery from recession, while almost two thirds of businesses said they were affected by rising transport fuel bills. “The North-East is an energy intensive region because it has thriving manufacturing and engineering sectors. Current policy is effectively punishing us, which is nonsensical given we are trying to rebalance away from an over-reliance upon the service sector.” --Andy Richardson, The Northern Echo, 12 November 2012 Two of Britain’s largest energy companies have broken ranks with their peers and have urged the Government to ditch a radical plan to make electricity generation almost entirely green by 2030. --Tim Webb & Michael Savage, The Times, 12 November 2012


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