The United States has taken Russia’s crown as the biggest oil and natural-gas producer in a demonstration of the seismic shifts in the world energy landscape emanating from America’s shale fields.
US oil production rose to a record last year, gaining 1.6 million barrels a day, according to BP’s Statistical Review of World Energy released on Wednesday.
Gas output also climbed, putting America ahead of Russia as a producer of the hydrocarbons combined. The data showing the US’s emergence as the top driller confirms a trend that’s helped the world’s largest economy reduce imports, caused a slump in global energy prices and shifted the country’s foreign policy priorities.
“We are truly witnessing a changing of the guard of global energy suppliers,” BP chief economist Spencer Dale said. “The implications of the shale revolution for the US are profound.”
The other major shift BP’s report shows is China’s energy demand growing at the slowest pace since the Asian financial crisis of the late 1990s as the economy slows and the country tries to reduce its reliance on heavy industry.
“Growth in some of China’s most energy-intensive sectors, such as steel, iron and cement – which had thrived during China’s rapid industrialisation – virtually collapsed in 2014,” said Mr Dale, a former Bank of England chief economist who joined BP last year.
In the US the boom in oil and gas production has started to change the economy profoundly. Cheap fuel has seen manufacturing return to the US as the country produced about 90 per cent of the energy it consumed last year.
Last year, imports equaled 1 per cent of GDP, according to BP’s data. In 2007, just before the financial crisis, US energy imports accounted for about half of the current account deficit of 5 per cent of GDP.
Shale drillers from Exxon Mobil to Chesapeake Energyspent about $120 billion last year in the US, more than double the amount five years earlier.
The surge in output and a slowdown in global demand have pushed crude oil prices down about 40 per cent in the past year.
- Bloomberg
