US To Be Top World Oil Producer Before 2020

Oil and gas boom puts US on track for energy independence

LONDON (CNNMoney)

The United States will overtake Saudi Arabia to become the world's biggest oil producer before 2020, and will be energy independent 10 years later, according to a new forecast by the International Energy Agency.

The recent resurgence in oil and gas production, and efforts to make the transport sector more efficient, are radically reshaping the nation's energy market, reported Paris-based IEA in its World Energy Outlook.

North America would become a net exporter of oil around 2030, the global organization said Monday.

"The United States, which currently imports around 20% of its total energy needs, becomes all but self sufficient in net terms -- a dramatic reversal of the trend seen in most other energy importing countries," the IEA stated.

The U.S. is experiencing an oil bool, in large part thanks to high world prices and new technologies, including hydraulic fracking, that have made the extraction of oil and gas from shale rock commercially viable.

From 2008 to 2011, U.S. crude oil production jumped 14%, according to the U.S. Energy Information Administration. Natural gas production is up by about 10% over the same period.

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According to the IEA, U.S. natural gas prices will rise to $5.5 per million British thermal units (MBtu) in 2020, from around $3.5 per MBtu this year, driven by rising domestic demand rather than a forecast increase in exports to Asia and other markets.

"In our projections, 93% of the natural gas produced in the United States remains available to meet domestic demand," it said. "Exports on the scale that we project would not play a large role in domestic price setting."

North America's new role in the world energy markets will accelerate a change in the direction of international oil trade toward Asia, and underscore the importance of securing supply routes from the Middle East to China and India.