Oppenheimer: America's tar sands and shale will be world's oil source
By Andres Oppenheimer
JournalStar.com
Thursday, September 29, 2011
The turmoil for reform sweeping most Middle Eastern oil producers is grabbing big headlines today, but that region may lose some of its economic clout in the future: There are signs that the Americas will replace the Middle East as the world's biggest oil-producing region.
An article in the current issue of Foreign Policy magazine sums it up in a two-word headline: "Adios OPEC." It says the Middle Eastern countries-dominated Organization of Petroleum Exporting Countries will lose much of its power in the 2020s, because "the Americas, not the Middle East, will be the world capital of energy" by then.
Amy Myers Jaffe, head of the Baker Institute Energy Forum at Rice University and author of the article, says the shift will take place because of technological and political factors.
While geologists have long known that there are huge untapped deposits of energy in the Americas, most of these reservoirs were hidden in deep waters, shale rock or oil sands that made them economically unfeasible to tap. But new technologies are changing that.
There are more than 2 trillion barrels of oil from unconventional sources in the United States, plus another 2.4 million in Canada and 2 trillion in South America, compared with the Middle Eastern and North African conventional oil reserves of 1.2 trillion, the article said.
Thanks to new techniques for horizontal drilling for shale gas production in the United States, and other new technologies to extract oil from Canada's oil sands, or from Brazil's off-shore "pre-salt" deposits, these and other reserves in the Americas soon will become the center of gravity of the world's oil supply, it said.
In addition, the Middle East's oil production will be affected by the political turmoil in that part of the world.
"The revolution-swept Middle East and North Africa will soon be facing up to an inconvenient truth," Myers Jaffe said. "Changes of government in the region have historically led to long and steep declines in oil production."
Mauricio Tolmasquim, president of the Brazilian government's Energy Research Co., EPE, said Brazil is expecting to increase oil production from 2.3 million barrels a day now to 6 million barrels a day in 2020. About half of the country's production will come from the newly exploited offshore deposits.
"We will almost triple our oil production by 2020, and about half of our output will be exported," he said. "We expect to begin exporting a significant amount of oil around 2015."
Andres Oppenheimer is a Latin America correspondent for the Miami Herald.
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