The major oil producer is only months away from full energy independence, which could materialise by February-March next year. And going forward, it is estimated that in about 10 years the total primary energy production will outpace primary energy demand by about 30 percent.

According to leading independent energy consultancy Rystad Energy, the next monthly release from the Energy Information Agency (EIA) will reveal that the US has been self-sufficient in primary energy for a full 12-month period, from October 2018 through September 2019.

This is expected to further curtail the power of swing producers like Saudi Arabia to dictate to the crude oil market. India’s oil imports from the US have already outpaced growth in shipments from its traditional suppliers in West Asia.

India, the world's third-biggest oil importer, bought about 1,84,000 barrels per day oil from the US from November 2018 to May 2019, compared with about 40,000 bpd in the same period a year earlier. Over the same period, India took 48 per cent less oil from Iran. India was Iran's second-biggest oil client after China until US ended the exemption from Iran oil sanctions in May this year.

This latest development spells out some broad implications on a number of fronts. Last year the US had a petroleum deficit of $62 billion, which is equivalent to 10 percent of the country’s overall trade deficit of $621 billion, including goods and services. These changes in the US energy balance could turn its petroleum deficit of $62 billion in 2018 to a surplus of $340 billion by 2030, Rystad Energy said. That adds up to a $400 billion shift, in the space of only a dozen years.

Crude oil and natural gas production will be the two main contributors to primary energy supply growth in the period, with oil accounting for 75 percent of the growth and gas 38 percent. On the demand side, Rystad Energy forecasts a cumulative average growth of about 0.4 percent from 2018 to 2030.

Rystad Energy points out that the emerging energy surplus will make the US less vulnerable to foreign energy-related politics and facilitate growing exports. While renewable energy output will be consumed domestically, the future for oil and gas exports is seen becoming very bright.

Rystad Energy’s fossil fuel energy balance shows the US was a net importer of 1.8 million barrels of oil equivalent per day (boepd) in 2018, buoyed by an especially heavy balance of imported liquids. As shale oil and gas output continues to grow, the US will import fewer barrels of oil and will increase its natural gas exports, making the country a net exporter of 0.6 million boepd of fossil fuels.

Rystad Energy forecasts that the US fossil fuel surplus will increase to 12 million boepd by 2030, thus allowing for an even larger increase in natural gas and liquids exports. In comparison, the US had a peak fossil fuel deficit of 14 million boepd in 2005.

The energy consultancy has forecast another path-breaking development for the oil industry. This is through the saving of as much as $100 billion from upstream budgets through automation and digitalization initiatives in the 2020s. Service companies are reinventing themselves to help operators unlock these savings.

In 2018, $1 trillion was spent on operational expenditures, wells, facilities and subsea capital expenditures across more than 3,000 companies in the upstream space. There are varying degrees of potential savings within offshore, shale and conventional onshore activity budgets, but in total, around 10 percent of this spend can be erased through more efficient and productive operations thanks to automation and digitalization.

The amount of savings has the potential to be significant and several operators expect automation and digitalization to reduce drilling costs by 10 percent to 20 percent, and facility and subsea costs by 10 percent to 30 percent. However, not all field developments or drilling operations have the same capacity to reduce costs. Adoption across the entire value chain of suppliers from national oil companies to smaller exploration and production companies will vary, so the realistic efficiencies and synergies will be closer to 10 percent by the end of the next decade.

One of the largest digitalization initiatives to date was recently launched in September this year, which is the result of a collaboration by Schlumberger, Chevron and Microsoft. This ambitious project aims to visualize, interpret and ultimately obtain meaningful insights from multiple data sources across exploration, development, and production and midstream sectors. (IPA Service)