The world is crunching toward a new energy future which is promising for both producers and consumers, but insufficient investments, unstable geopolitical factors and the cost of applying new technology to daily life add uncertainties to the future.
U.S. EMBRACING NEW ENERGY REALISM
U.S. Secretary of Energy Rick Perry, as he spoke to those attending CERAWeek held by IHS Markit on March 5-9, said the United States and the world are now witnessing a new energy realism.
He said the new energy realism rests on the fact that America is amid an incredible energy revolution.
"This dramatic process is a decisive break from the 1970s, when America followed a flawed policy," he said.
According to Perry, the United States has moved from an era of perceived energy scarcity to one of unprecedented energy abundance. "That abundance is the result of technology and innovation," he said.
In an interview with Xinhua during CERAWeek, Secretary General of the International Energy Forum (IEF) Sun Xiansheng said the United States used to be a major importer of oil, but there has been a big change since American shale oil production increased sharply in recent years which resulted in the reduction of oil import from the Middle East.
"The U.S. shale production plays an important role in keeping market balance," Sun said, adding that the world consumption center has shifted from the West to the East.
Sun believed the new trend has a significant impact on global economic development and provides a chance for both the United States and China to have a closer cooperation in energy.
The International Energy Agency (IEA) released an energy outlook at CERAWeek, which indicates that China and India are leading the oil demand, driven by their robust economic growths.
GLOBAL UNCERTAINTY REMAINS
The uncertainty mainly lies in the question of whether there will be sufficient investments into the oil industry that will deflect the possibility of bottlenecks in the supply chain as demand continues to grow.
Fatih Birol, executive director of the IEA, on more than one occasion, told attendees of CERAWeek that investments need to be made or there could be a bottleneck in the supply of crude oil in three years.
Investment into the industry had two consecutive years when there was 25 percent or more decline on an annual basis -- 2014 to 2015 and again 2015 to 2016. Since that time, investments have risen, but certainly not to the level before 2014.