The American oil rush

Telegraph:

Unconventional oil, such as the Canadian oil sands, shale oil deposits in North Dakota and Texas and deepwater drilling in Africa and South America have helped to bolster global energy supplies.

However, the real revolution over the past five or six years has been in the US. The country is well on its way to energy independence, with output rising as consumption falls. Oil production jumped by almost 14pc in the US.

"On the supply side, the most noticeable phenomenon remains the American shale revolution," BP said in its 62nd annual Statistical Review of World Energy, released last week.

"In 2012, the US recorded the largest oil and natural gas production increases in the world, and saw the largest gain in oil production in its history."

Over the year, the global oil supply rose by 2.2pc.

So, despite disruptions to oil supply in Africa and parts of the Middle East, rising US output ensured that global oil production continued to grow. Other Opec countries also helped make up for the shortfall in the world's trouble spots, as Syrian production slumped 49.9pc, Iranian output fell 16.2pc and Yemen produced 21.4pc less oil than in 2011. Oil production in the European Union fell by 9.9pc.

Libyan production recovered strongly, rising 215pc, after the sharp drop in output in 2011, and Saudi Arabia, the United Arab Emirates and Qatar all produced crude at record levels.

Against this backdrop of soaring oil production, global nuclear power output had the largest decline ever, with Japanese output falling by nearly 90pc as the response to the tragedy at Fukushima continued to unfold. Fossil fuel imports rose to compensate.

On the consumption side of the equation, oil usage continued to rise. Worldwide energy consumption rose 1.8pc but this is well below the 10-year average of 2.6pc.

Economically turbulent western economies saw usage fall, with consumption in OECD countries sliding 1.2pc. This was led by a decline of 2.8pc in the US, despite its resurgent economy.

This means emerging markets led the pack in terms of growth in oil use, with non-OECD consumption growing by 4.2pc. However, this figure was weak, falling well below the 10-year average of 5.3pc, which includes consumption growth throughout the credit crunch. This fact is a lagging indicator that plays into current concerns that the wheels are starting to come off the global emerging markets story.
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In European countries that are attempting to switch to alternative energy, their manufacturing base is making plans to move their operations to the US where they can run their business for about half the cost when it comes to energy.  They had to do this to stay competitive with US companies who are also taking advantage of the low cost energy brought on by shale gas.