In an Energy Voice opinion piece, yesterday, a major supply gap and rising prices for years ahead was predicted by the International Energy Agency. Contrary to the news I’ve been reporting about massive oil and gas finds west of Shetland, the global picture is one of stagnating investment in exploration. Even if Saudi Arabia reverses its recent cuts designed to keep prices up, the gap will be too large for them and the US shale industry to fill.
According to Goldman Sachs, in Energy Voice, the market is ‘rebalancing rapidly’ and ‘demand will significantly exceed production’, according to the IEA’s Head of Oil Industry and Markets, Neil Atkinson. US stockpiles fell by the 5.2 million barrels in one week. So much for the risk to prices posed by shale. The global supply deficit is predicted to be as wide as 2 billion barrels per day by July.
Here’s what the director of the IEA said:
‘The potential supply gap has far-reaching implications that we are not ready to combat. Gas and oil are still fundamental to much of the world’s infrastructure, despite a steady increase of research and utilization of renewable energy resources. While electric cars continue to show a promising future, especially in the light of ambitious new green car policy initiatives in India and China, they still account for less than 2 percent of the world’s cars. And, as the global middle class continues to grow and exercise their buying power, the demand for oil will continue to grow alongside them.’
As Scotland approaches 100% renewable energy production, our surplus oil and gas resources such as this, below, will be a major source of income for our Treasury. Let’s hope it’s our Treasury by then: