* United States to become energy self-sufficient by 2035
* Shale oil to account for 7 percent of supply by 2035
* Middle East oil use surges, OPEC market share under
* Renewables to grow, but fossil fuels remain dominant
(Adds further details, quotes)
By Alex Lawler and Stephen Eisenhammer
LONDON, Jan 15 Middle Eastern oil producers face
a mountain of challenges in the next two decades as Russia and
South America strive to replicate the U.S. shale oil boom, while
demand jumps in the region's domestic markets.
Oil company BP said in its influential annual outlook
issued on Wednesday that Middle East energy use will grow by 77
percent by 2035, double the increase in production, meaning as
little as 65 percent of oil output will be available for export,
down from 72 percent.
This could put additional pressure on government budgets of
countries such as Saudi Arabia that depend on oil export
revenue, at the same time as supply from shale oil and other
non-conventional sources meets the bulk of global demand growth.
BP expects Russia and South America to join the United
States in tapping shale oil over the next two decades,
indicating the shale boom that has transformed the U.S. energy
market can, to some extent, be repeated in other countries.
"The second-biggest coming in over time is Russia and then
South America, and in South America Colombia and Argentina,"
BP's chief economist, Christof Ruhl, said at a news briefing,
referring to sources of shale oil growth outside the United
BP's prediction that countries other than the United States
will partly re-create its shale oil boom contrasts with other
long-term energy forecasts. The Organization of the Petroleum
Exporting Countries, for example, assumes shale production will
have no impact outside North America.
The United States will become energy self-sufficient by
2035, BP said, a more concrete forecast than previously, as the
shale boom allows it to surpass a previous 1970 peak in oil
output and as gas supply rises. North America will become
self-sufficient even earlier, in 2018.
The Middle East remains the world's largest oil exporting
region and also becomes the largest consumer of oil and other
fuel liquids per capita, surpassing North America, by 2035
consuming over three times the amount per person than the global
average, BP said.
Low, often subsidised prices for gasoline and electricity
give Middle East residents little incentive to switch to
fuel-efficient cars from gas-guzzlers, or cut their use of air
conditioning in one of the world's hottest climates.
At the same time, countries' efforts to develop their
economies beyond oil are leading them into energy-intensive
industries such as aluminium smelting.
World oil demand will rise to 109 million barrels per day
(bpd) by 2035, up 19 million bpd and led by China, India and the
Middle East. Even so, oil will be the slowest-growing fuel over
BP expects Russia and South America to contribute about 1
million bpd of shale oil each by 2035 and that oil from tight
rock formations will account for 7 percent of global supplies in
2035, Ruhl told reporters.
Still, the entry of other producers will not prevent a
slowdown in the rate of supply growth.
"What we have is very rapid growth right now, and
decelerating over time," Ruhl said.
U.S. oil imports peaked in 2005 at over 12 million bpd and
60 percent of demand, and they will decline to less than 1
million bpd, less than 10 percent of U.S. demand, during the
forecast period, he said.
This is the fourth year that BP, a publisher of benchmark
energy statistics for over 60 years, has issued its long-term
energy outlook. This year's report looks to 2035, five years
longer than previously.
This survey marked the first time that BP predicted exactly
when the United States would be energy self-sufficient. Last
year's report said it would "nearly" happen by 2030.
While the United States becomes a net exporter of natural
gas by 2017, shale gas over the next two decades will have no
such impact in Europe. The European Union will see its gas
import dependency rise to 84 percent in 2035 from 66 percent.
Fossil fuels remain dominant in the energy mix to 2035. Gas
and coal will account for 54 percent of global demand while the
share of renewables grows to 7 percent from 2 percent.
(Additional reporting by Nina Chestney, editing by Jason Neely)