The vast amount of oil and natural gas available in the United States continues to change world dynamics.
The International Energy Agency this week said the trend likely will lead manufacturing jobs to move to the United States and away from Europe and Asia.
“Lower energy prices in the United States mean that it is well-placed to reap an economic advantage, while higher costs of energy-intensive industries in Europe and Japan are set to be a heavy burden,” IEA chief economist Fatih Birol said in a statement this week as the IEA released its World Energy Outlook 2013.
The report pointed out that natural gas in the United States trades at one-third the import price in Europe and one-fifth the price in Japan.
The report found that “large variations in energy prices” will persist through 2035, “affecting company strategies and investment decisions in energy-intensive industries.”
“Average Japanese or European industry consumers pay more than twice as much for electricity as their counterparts in the United States, and even China's industry pays almost double the U.S. level,” the report stated.
While the IEA report paints a bullish picture for domestic manufacturing, the findings were not all positive for oil and natural gas companies.
OPEC trends upward
The outlook challenges the belief of many Oklahoma producers by projecting domestic oil growth to slow by 2030.
“The role of OPEC countries in quenching the world's thirst for oil is reduced temporarily over the next 10 years by rising output from the United States, from oil sands in Canada, from deepwater production in Brazil and from natural gas liquids from all over the world. But, by the mid-2020s, non-OPEC production starts to fall back and countries in the Middle East provide most of the increase in global supply,” the report stated.
The IEA pointed out that OPEC and other government-owned oil companies control about 80 percent of the world's economically recoverable oil reserves.
Oklahoma oil and natural gas producers have criticized organizations like the IEA for being too conservative in their assessments.
Recoverable oil in U.S.
Industry representatives say technology has improved enough to consider far more domestic oil reserves economically recoverable. They point to the rapid production boom over the past five years as proof.
The International Energy Agency and the U.S. Energy Information Administration, however, tend to be slower to accept short-term trends as permanent industry changes.