The global energy sector will be significantly reshaped over the next 20 years as the US is set to become the undisputed global oil and gas leader.
The International Energy Agency's World Energy Outlook 2017 sets out four major trends that are 'profoundly reshaping' the energy sector: the resurgence in oil and gas production from the US, significant declines in the cost of renewables, the share of electricity in the energy mix is growing and China's move towards a cleaner growth mode.
These four themes are altering the face of the global energy system and upending traditional ways of meeting energy demand, according to the document.
The document sets out that over the next 25 years, the world's growing energy needs will be met firstly by renewables and natural gas, as plummeting costs turn solar power into the cheapest source of new electricity generation.
It says that rising oil demand will slow down, but is not reversed before 2040, despite the steep rise of electric car sales.
Dr Fatih Birol, executive director for the IEA, says: 'These are extraordinary times for global energy, and they are reflected in what I believe is an extraordinary WEO.
'Electric vehicles are in the fast lane as a result of government support and declining battery costs but it is far too early to write the obituary of oil, as growth for trucks, petrochemicals, shipping and aviation keep pushing demand higher.
'The US becomes the undisputed leader for oil and gas production for decades, which represents a major upheaval for international market dynamics.'
The shale oil and gas revolution in the US continues thanks to the ability of producers to unlock new resources in a cost-effective way. By the mid-2020s, the US is projected to become the world's largest LNG exporter and a net oil exporter by the end of that decade.
The report says this is having a major impact on oil and gas markets, challenging suppliers and causing a major reorientation of global trade flows, with consumers in Asia accounting for more than 70% of global oil and gas imports by 2040.
And while oil demand continues to grow, it is at a steadily decreasing pace due to fuel efficiency and rising electrification bringing a peak in oil used for passenger cars. Other sectors however, such as petrochemicals, aviation and shipping, are driving up oil demand to 105 million barrels a day by 2040.
A full analysis of the report will be included in the December/January 2018 edition of Tank Storage Magazine.
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