By Malini Hariharan
The energy landscape in North America is rapidly changing. After shale gas the focus has shifted to rising oil production from various unconventional sources, which has prompted some commentators to predict that the region will regain its status as a major global producer.
In a new report, analysts at Citibank confidently predict that North America is becoming the new Middle East.
"The United States has become the fastest-growing oil and gas producer in the world, and it is likely to remain so for the rest of this decade and into the 2020s. Add to this output the steadily growing Canadian production, and a likely reversal of Mexico's recent production decline and theoretically, total oil production from the three countries could rise by 11.2m bbls/day by 2020, or to 26.6m bbls/day from around 15.4m at the end of 2011," says Ed Morse of Citibank in The Wall Street Journal.
Five sources of oil could make North America the largest source of new supply in the next decade: oil sands production in Canada, deepwater in the US and Mexico (focused on the Gulf of Mexico), oil from shale and tight sands, natural-gas liquids (NGLs) associated with the production of natural gas, and biofuels.
Morse points out that North America has become an important marginal source of oil and gas globally. Crude-oil imports by the US have been falling after hitting a peak in 2005-06, while exports touched 1.2m bbls/day at the end of 2011.
The US is also expected to become a big exporter of liquefied natural gas (LNG), competing with Qatar and other traditional players.
Citibank's analysts conclude that rising energy production will trigger a revival of manufacturing and jobs in the US.
Employment in the oil and gas sector will be boosted by some 500,000,
Around 2.2 million-2.3 million jobs will be created by economic stimulus and by the new hydrocarbon production, they estimate.
The renaissance of the US energy industry also figured high on the agenda at the recent annual meeting of the American Fuel & Petrochemical Manufacturers (AFPM).
"The nation needs to hear that we are energy-rich, not energy-poor," stressed Charles Drevna, president of AFPM at the meeting.
The potential of increased production cannot be ignored, but environmental issues associated with these unconventional sources of oil and gas need to be kept in mind.
New regulations related to the fracking technique used in shale gas and oil production are still being worked out. Industry players have already expressed fears that new government policies will hinder progress.