The
tectonic plates of Middle East politics are shifting fast. Egypt’s Arab
spring may have run into the sand of anti-democratic Islamism, but the
days when oil-rich Arab sheikhs colluded to hold Western economies to
ransom will soon end. Massive shale oil and gas discoveries across the
West, Israel’s rising status as a Middle East energy powerhouse and a
deepening internal rift over strategic policy are all colluding to
hasten OPEC’s demise.
In June,
Kuwaiti oil minister Hani Hussein’s commented, “Oil from the Middle
East will always find a home. And we have to see more research to get a
better idea about the impact of shale oil development.” It’s a remark
that sums up OPEC’s complacency in the face of the sheer scale of the
global shale gas, and increasingly, shale oil revolution. Take the
impact of OPEC’s exports to the United States. In 2011 20 percent of all
OPEC exports went to the U.S. But America’s shale oil developments,
particularly the development of the vast resource in the Green River
Formation, could well as ConocoPhilips CEO Ryan Lance told OPEC in June,
make North America, “self-sufficient in oil (as well as gas) by 2025”.
It’s easy to see why. According to the United States Geological Survey
(USGS), the Green River Formation in Colorado and Utah contains around 3
trillion (3,000 billion) barrels of oil, at least half of which will be
recoverable. Given that the US consumes around 7 billion barrels a year
... well, you can do the math. Based on current industry production
plans, energy consultants IHS CERA estimate that US unconventional oil
production could rise from its current half a million barrels per day to
3 million barrels per day by 2020. As Daniel Yergin, chairman of IHS
CERA, points out, that amounts to adding “another Venezuela or Kuwait by
2020”.
In the meanwhile, the Bakken shale formation in North Dakota and Montana continues to hold the spotlight for its role in the revival in US oil production. Between 2010 and 2011 production from the Bakken field doubled from 260 thousand barrels per day (bpd) to 445 thousand bpd. But as world class as the Bakken Formation shale yield is proving it is estimated that Russia’s Bazhenov Formation in Western Siberia is around 80 times larger still. Indeed the huge shale wealth – oil and gas – of Russia and China generally, neither of which are OPEC members, needs to be factored into the changing geopolitics affecting the Middle East’s energy production and its significance.
Read more: http://thegwpf.org/opinion-pros-a-cons/6085-peter-glover-the-end-of-opec-despotism-.html
In the meanwhile, the Bakken shale formation in North Dakota and Montana continues to hold the spotlight for its role in the revival in US oil production. Between 2010 and 2011 production from the Bakken field doubled from 260 thousand barrels per day (bpd) to 445 thousand bpd. But as world class as the Bakken Formation shale yield is proving it is estimated that Russia’s Bazhenov Formation in Western Siberia is around 80 times larger still. Indeed the huge shale wealth – oil and gas – of Russia and China generally, neither of which are OPEC members, needs to be factored into the changing geopolitics affecting the Middle East’s energy production and its significance.
Read more: http://thegwpf.org/opinion-pros-a-cons/6085-peter-glover-the-end-of-opec-despotism-.html
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