Two years ago, Saudi Arabia started mulling over the prospect of shale natural gas as it faced the possibility of running short on energy supplies. The largest oil exporter in the world said it’s now ready to replicate the shale gas success in the United States and use its own unconventional reserves to keep the lights on. The shale boom in the United States has turned the global energy market on its head. The director of the International Energy Agency said, however, coal was still the fuel of choice.
The United States is on pace to pass Russia as the leading natural gas producer in the world. In theory at least, it could rival Riyadh in terms of oil production. The production gains from the United States are thanks in part to the much-ballyhooed shale boom under way in the country.
The U.S. Energy Department said last week it expected natural gas production to rise 1.7 percent from its 2012 level to 70.4 billion cubic feet per day next year. U.S. oil production should rise by more than 30 percent during that same time to 8.5 million bpd in 2014.
That increase forced oil giant Saudi Arabia to stand up and take notice, not only because higher U.S. production means less consumption of foreign energy resources but also because of what it can possibly do at home. Saudi Aramco President Khalid al-Falih told the World Energy Congress in South Korea this week the race was on to replicate the U.S. success with shale.