BP forecast plots Western Hemisphere unconventional supply growth

The growth of unconventional energy supplies—including oil and gas from US shales, Canadian oil sands, and Brazilian deepwater production—will make the Western Hemisphere close to completely energy self-sufficient by 2030, BP PLC said in its latest annual outlook. This means that growth in the rest of the world, particularly Asia, will increasingly depend on the Middle East in particular for its oil requirements, it added.

“In fact, according to our 2030 outlook, because of the explosion of gas production in the US and in North America generally, and because of production improvements from oil sands in Canada and shale oil and deepwater in the US, we have North America becoming energy self-sufficient by 2030,” BP Chief Economist Christof Ruhl said.

Europe and former Soviet Union nations could achieve similar energy self-sufficiency by that time if they closely cooperated, he continued. “It will be more complicated because of global markets, and because the two regions don’t always see eye-to-eye,” he observed during a Jan. 30 presentation at the Center for Strategic & International Studies.

“We see continued demand growth for gas, with an increasing share coming from unconventional sources to the extent that the US will turn from an importer to an exporter,” Ruhl continued. Europe’s unconventional gas production won’t grow as quickly because it doesn’t have comparable access or infrastructure, and the region will have to increasingly rely on imports via pipelines and tanker-borne LNG, he indicated.

“China is a special case,” he said. “Right now, gas is only about 4.5% of its energy mix. We expect that to increase to 7%, initially by pipeline and LNG imports and ultimately by more domestic production. By 2030, China will consume roughly as much gas as Europe does today.”

US oil import dependence could drop from about half of its total supply now to around one-third by 2030 under BP’s latest annual outlook because of growing deepwater and shale formation production, Ruhl said. “The implications of North America—the US, Canada, and Mexico—becoming energy independent are massive,” he maintained. “Just think of all the discussions we have now about the Strait of Hormuz and whether the US has to send its naval fleet there to protect supply routes. We won’t be having them 20 years from today.”

Contact Nick Snow at [email protected].