U.S. oil output to overtake Saudi Arabia’s by 2020

‘Epic Failure’

Efforts by global policy makers to promote energy efficiency have been an “epic failure” and fallen short of their economic potential, Birol said. Increased energy-saving measures could cut worldwide oil demand by almost 13 million barrels a day by 2035, or the current combined output of Russia and Norway. Put another way, were efficiency measures suggested by the IEA enacted in full, the increase in world energy demand over the period would be cut in half.

Natural gas consumption will rise in the forecast period, driven by China, India and the Middle East.

“In the United States, low prices and abundant supply see gas overtake oil around 2030 to become the largest fuel in the energy mix,” according to the report, written by a team of researchers led by Birol.

Iraqi Surge

Iraq will be the biggest contributor to new oil supplies, raising production to 6 million barrels a day by 2020. By 2035, the nation’s output rate will rise to more than 8 million, overtaking Russia to become the world’s second-largest exporter, the IEA said. The country pumped 3.4 million barrels a day last month, making it the second-largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia, according to Bloomberg estimates.

The forecasts for Iraq, a special focus of this year’s IEA outlook, were previously published on Oct. 9.

In emerging nations, government subsidies will continue to spur fossil fuels use, even as lower-carbon energy sources become more popular. State subsidies cost $523 billion last year, up almost 30 percent from 2010. Subsidy programs, which remain most prevalent in the Middle East and North Africa, have become more expensive as oil prices rose, the agency said.

Bloomberg News

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