Crude continues to dominate headlines. The 3rd OPEC summit is round the corner. Eyes are thus focused on Riyadh for more than one reason. This also seems to be a launching season for global energy outlooks. IEA to ExxonMobil, major industry stakeholders, are coming out with their projections of near and distant future, one after the other. And as crude market prices approach three digits — almost unthinkable even a couple of months back — the position of the world’s largest consumer, the US, remains crucial to the global markets.
United States, the world’s largest economy today consumes 21 million barrels a day — roughly one fourth of the total global requirements The US crude consumption pattern remains a major debating issue.
Guy F. Caruso, the administrator of the Energy Information Agency — the statistical arm of the US Department of Energy, was in Riyadh earlier the week.
Just prior to making his presentation before a select gathering of diplomats and energy professionals at the premises of the International Energy Forum Secretariat, Caruso discussed some of the important issues confronting the energy world today.
Caruso agreed that the US dependence on the region was already not much. “With the US roughly importing about 12 million barrels a day, Canada and Mexico are the top crude exporting countries to the US. Venezuela and Saudi Arabia come only after them.”
Washington is also endeavoring to up its domestic production, aiming to reduce its reliance on crude imports from roughly 60 percent of its total requirements currently to about 55 percent over the next five years or so, Caruso emphasized.
He though conceded that despite the rhetoric to develop alternatives, biofuels may not contribute very significant to the global energy mix — rising to some 10 percent by 2030 from the current 2 percent. A shift toward coal for generating electricity though was visible, Caruso pointed out.
The EIA administrator said major consumption growth is to come from the emerging Asian economies. Middle East would continue to meet the global incremental requirement, however, there are a number of issues. “There is no question that there was still enough crude available beneath the surface to meet the increasing global needs, the question remains how to tap them,” he philosophically points out.
“The issue today is not if there are resources still available, the issue is how to ensure taking out the resources from beneath the earth,” he underlined, dismissing the Peak Oil theory. Caruso cited the examples of Kuwait, where Project Kuwait remains mired in controversies for more than a decade now and the current security situation in Iraq, making it impossible to develop these two potential future sources for additional crude.
Geopolitics, resource nationalism, lack of investments in regions and countries where oil was still available beneath the surface, lack of access to the international oil companies, refining bottlenecks, alarming security situation in some oil-rich regions, were all causing the industry to stutter, he said.
Caruso underlined that despite all the bottlenecks, the global crude production would go up from around 80 million bpd in 2004 to 118 million bpd by 2030 — and most of it would come from the Middle East — emphasizing the crucial role the region would continue to play in meeting global energy requirements.
