IEA report: U.S. to be world’s top oil producer by 2020

IEA graph showing the trajectory of US oil production

Despite persistent misinformation from industry advocates that the Obama administration was working to curtail the production of oil in the United States in favor of green energy sources, it turns out that false notion widely circulated before the election is untrue.

The International Energy Agency (IEA) has released its World Energy Outlook and, according to the IEA, the United States is on track to become the No. 1 oil producer in the world by 2020.

The report also predicts that by 2035, the U.S, will reach energy self-sufficiency and go from being an importer of oil – we currently import 20 percent of our total energy needs from other nations – to a net oil exporter.

As reported by CBS News Money Watch and confirmed by the IEA report:

“U.S. oil output is surging so fast that the U.S. could soon overtake Saudi Arabia as the world’s biggest producer. Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.”

The IEA report is explicit on the reasons for this sharp increase less than a decade after gloomy predictions of declining oil production were floated on the premise that “peak oil” had been reached .

“The major factor driving domestic production higher is a newfound ability to squeeze oil out of rock once thought too difficult and expensive to tap. Drillers have learned to drill horizontally into long, thin seams of shale and other rock that holds oil, instead of searching for rare underground pools of hydrocarbons that have accumulated over millions of years,” said the report.

Those ideas found some agreement in a new Deloitte survey of oil and gas decision-makers released in early November. The survey was conducted in late October – before the IEA report was released – according to Deloitte, a professional services firm that evolved from accounting giant Deloitte Haskins & Sells.

Deloitte survey respondents are in general agreement with the data presented in the IEA’s World Energy Outlook, with three-quarters of them expressing the belief the U.S. is already natural gas self-sufficient, or will be within 10 years.

When it comes to oil, however, survey respondents are far less optimistic about our ability to meet American demand with domestic supplies: 54 percent say the U.S. will never be completely oil self-sufficient – and only 26 percent say oil self-sufficiency is achievable in the next 10 years. The IEA is more conservative on the self-sufficiency issue but said the U.S. will reach energy self-sufficiency by 2035.

Deloitte said if the question of oil self-sufficiency had been expanded to include all of North America, the results would likely have been different.

“Given North America’s remarkable success with unconventional oil – both tight oil in places like North Dakota and oil sands in Canada – something closely resembling self-sufficiency is arguably within reach,” said Peter Robertson, an independent senior advisor to Deloitte and former vice chairman of Chevron Corporation.