How convenient? OPEC comes out and tells the world that oil shale is plentiful and the next day Obama’s Interior Department stops shale oil drilling in the western US because it’s a habitat of the Sage Grouse. Obama doesn’t want America to be energy dependent.
(Reuters) – 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.
OPEC has been slower than some to acknowledge the impact that new technologies such as hydraulic fracturing – known as “fracking” – may have on supply. Conoco’s Chief Executive Ryan Lance has gone so far as to predict North America could become self-sufficient in oil and gas by 2025.
In OPEC’s new forecast, shale oil will contribute 2 million barrels per day (bpd) to supply by 2020 and 3 million bpd by 2035. For comparison, 2 million bpd is equal to the current output of OPEC member Nigeria, which is Africa’s top exporter.
Fracking involves pumping chemical-laced water and sand into a well to open cracks that release oil and gas. The technology has transformed the production outlook in North America but drawn criticism from environmentalists, although the industry insists it is safe as long as wells are properly built.
OPEC said that in the medium-term shale oil would continue to come from North America only, but other parts of the world might make “modest contributions” in the longer term.