Gas supplies from North America and Australia will change the global energy landscape over the next two decades, shifting market domination away from the Middle East, according to the International Energy Agency's World Energy Outlook 2012 report.
Fatih Birol, the IEA's chief economist, said the recent rebound in the US oil and gas industry, driven mainly by the discovery of shale gas and use of upstream technologies to unlock what is known as "tight oil", has spurred economic activity in that country.
Less expensive electricity prices will enable the US to become the largest global energy trader, overtaking Saudi Arabia by 2020, while North America will become a net oil exporter by 2030, he said.
As the US lowers its imports, more Middle East supply will flow to Asian markets.
The US currently imports 20% of its total energy needs, said Mr Birol.
He said it started production of shale gas in recent years after it became economical to do so, resulting in reduced coal use and heralding a significant shift in major global energy players.
The IEA estimates global oil demand will rise to 99.7 million barrels per day in 2035 from 87.4 million bpd last year, while the average price of crude oil imports will surge to US$125 a barrel.
Meanwhile, sand oil and liquid natural gas from Canada, the US and Brazil will push production by non-Organization of Petroleum Exporting Countries to 53 million bpd after 2015 from less than 49 million bpd last year.
Unconventional gas supplies will account for nearly half the global increase in gas production by 2035, mostly from China, the US and Australia.
At the same time, the coal trade will continue to grow significantly until 2020, with India becoming the largest net importer as shipments to China lag behind.
Global electricity demand will double, with half the new capacity coming from renewable energy, although coal will maintain its important role in power generation sector.
The average global electricity price will increase 15% by 2035, driven mainly by fuel costs and a shift to more capital-intensive generating capacity.
Mr Birol said renewable energy will account for almost one-third of global electricity output, particularly from biomass and biofuels, whose use is expected to grow four-fold over the next 20 years.
Nuclear power capacity will be developed mainly in Asia and Russia, but its share of the global electricity supply will fall slightly over time.
About the author
- Writer: Yuthana Praiwan
Position: Business Reporter