US Oil Independence Isn’t a Sure Thing

From Market Watch

By Myra P. Saefong

SAN FRANCISCO (MarketWatch) — If the U.S. becomes the world’s largest oil producer within the next decade, the energy market landscape will undergo some radical changes that may ultimately succeed in easing some of the volatility it’s been known for — but the nation will still rely heavily on imports.

In a report this week, the Paris-based International Energy Agency forecast that the United States will become the largest global oil producer, overtaking Russia and Saudi Arabia, by around 2020. See: U.S. set to overtake Saudi Arabia in oil output: IEA.

“The global energy map is changing, with potentially far-reaching consequences for energy markets and trade,” the IEA said in its World Energy Outlook 2012 report. “Energy developments in the United States are profound, and their effect will be felt well beyond North America and the energy sector.”

That offers a glimmer of hope that the U.S. rise to the top as an oil producer will benefit the world, as well as lift the nation closer to energy independence.

“The gradual pilgrimage of oil supplies to politically more stable nations such as the U.S. should … reduce the geopolitical swing associated with the oil price,” said Matthew Parry, senior oil-market analyst at the IEA. “We can at least hope.”

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