Thursday, November 29, 2012

Saudi America

According to the International Energy Agency:
By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in US oil imports, to the extent that North America becomes a net oil exporter around 2030.
James Hamilton (and quite a few other people) isn't so sure:
My view is that with these new fields and new technology, we’ll see further increases in U.S. and world production of oil for the next several years. But, unlike many other economists, I do not expect that to continue for much beyond the next decade. We like to think that the reason we enjoy our high standard of living is because we have been so clever at figuring out how to use the world’s available resources. But we should not dismiss the possibility that there may also have been a nontrivial contribution of simply having been quite lucky to have found an incredibly valuable raw material that was relatively easy to obtain for about a century and a half. 
My view is that stagnant world oil production and doubling in the real price of oil over 2005-2010 put significant burdens on the oil-consuming economies. Optimists may expect the next century and a half to look like the last. But we should also consider the possibility that it will be only the next decade that looks like the last.
Either way, I don't expect it to cost me any less to fill up my car in the next few years. And probably a lot more...


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