Tuesday, November 12, 2013

IEA: The World Is Totally Unprepared For When The Great American Shale Boom Fizzles Read more: http://www.businessinsider.com/iea-energy-outlook-bearish-on-shale-2013-11#ixzz2kSmxYMrD

"The International Energy Agency says world markets are unprepared for when — and it's a when, not if, it asserts, — the Great American Shale Boom fizzles, The FT's Ajay Makan and Neil Hume report.
In its latest World Energy Outlook released this morning, the IEA forecasts unconventional oil production will require $700 billion annually — basically about where we are now — to sustain current output levels. Even if the industry is able to do so, production will begin to slip in a decade regardless because of shale wells' high decline rates.
At that point lower-cost Middle East production will have to take over again. But those countries haven't been making the necessary investments to prepare for this outcome, the agency warns, meaning the rest of the world will be caught flat-footed. 
Here's what IEA chief economist Fatih Birol said in presenting the report this morning, per FT:
"...key Gulf producers have been adopting a 'wait and see approach' to investment, because of the perception that the US shale revolution would produce an 'abundance of oil'.
“ 'I am really worried that we are giving the wrong signals to the Middle East, which may end up with us not having investment in a timely manner,' [Birol] said.
“ 'The wait and see behaviour is definitely not in the interest of consumers or global oil markets because it may mean significantly higher prices in the future.' ”

at http://www.businessinsider.com/iea-energy-outlook-bearish-on-shale-2013-11#ixzz2kSn4PQZ9

No comments:

Post a Comment