The International Energy Agency forecasts that by 2020, the US will displace Saudi Arabia as the world’s largest producer of oil. The IEA forecasts US production of 11.6 million barrels a day. Much of this production is expected to come from continuing increases in “tight-oil” production, which has increased from 600,000 barrels per day in 2008 to 3.5 million barrels. Tight oil is “a broad category for the dense rocks, such as shale, that usually sit beneath the reservoirs that contain conventional oil.”
According to The Economist (Saudi America, February 15, 2014), the production of tight oil and natural gas from shale has increased US economic growth by 0.3 points last year and will increase future economic growth by 0.10 to 0.20 annually through 2020. The US petroleum deficit has narrowed to 1.7% of GDP, “which seems to have made both the dollar and the economy less sensitive to oil prices.”
Because the new production processes–fracking–require far more wells than conventional drilling, it is likely that US oil production will be far more sensitive to price alterations. Lower prices may result in a swift reduction in the new well drilling and higher prices may result in the opposite. It is conceivable that US oil production may become a price buffer, moderating future oil price fluctuation.
The article is silent with regard to the impact of these developments on cleantech, but one would expect lower prices for traditional energy sources to make hurdles higher alternatives.