US forecast to be world's largest oil producer
Forecasts from the International Energy Agency (IEA) point to the US becoming the world’s largest producer of oil and gas by 2030, and will be almost energy self-sufficient by 2035.
Mike Wittner, global head of oil research for Societe Generale, says that is largely due to the shale oil boom.
"The technology has made it a lot more cost efficient but what's really happened just in the last couple of years is that it- shale oil or tight oil from shale as the IEA says, has really moved from, you know, a relatively small piece of production… to a rapidly growing piece of US production,” he says.
However environmental issues must also be considered.
“Some valid concerns and issues have been raised about making sure that these wells that use fracking and the shale formations, they need to be completed,” says Mr Wittner. “They need to be constructed properly to safeguard drinking water and there is also the issue of what happens to the waste water that is generated."
Michael Gayed, chief investment strategist for Pension Partners., says the economic implications could be powerful.
"Rising oil prices are very much like a tax increase, falling oil prices are very much like a tax decrease if we are producing more that is somewhat of a net effect of a tax decrease on the consumer,” says Mr Gayed.
And according to Mr Wittner, there are major economic geopolitical implications of energy independence as well.
"It's actually going to make it possible for the US to pay less attention and actually foot less of the bill for protecting Middle Eastern oil supply and basically, in effect, say to China and other countries hey you guys are the big consumers now you guys have to step up and do your part,” says Mr Wittner.
The IEA expects almost 90 percent of oil from the Middle East will be drawn to Asia by 2035.
Watch the video for the report by Reuters’ Carmen Roberts.