The Energy-Independent Continent

North America consumes more than 2800 billion tons of oil equivalent per year. It produces 75% of its energy needs and is thus almost energy-independent. The remaining 25% is imported (mostly as oil) from South America and the Middle East. Natural gas imports are negligible. North American thus has no critical dependency on any other region of the world (Fig. 4.3).

Whether this independence can be sustained in the long term is a matter of concern.

Figure 4.4 maps the ratio of reserves to production for each source of energy (in years of consumption). R/P uses retrievable reserves and Rprov/P shows the same ratio for proven reserves. The 2035 ratio is calculated using the current production of 2035 and the calculated cumulated depletion of retrievable reserves by 2035. The ratio of production to consumption is also shown to allow assessment of North America’s current energy independence per type of energy. The 2035 forecast is the one from the International Energy Agency (2012).

“Proven” reserves of North America amount up to 40 years of oil and 15 years of natural gas. Coal reserves correspond to 300 years of production at the current pace. The discovery of shale oil and gas as well as other unconventional oils in Canada has considerably modified the status of reserves in the region. “Retrievable” resources in North America are now the highest in the world, with more than 400 years of oil production at the current pace and 140 years of natural gas. Only 10% of these reserves are “proven” but North America is theoretically independent from an energy standpoint. The development of these resources, provided they are economically sound, would lead to a slight reduction of the R/P ratio, but the energy

Energy imports from North America (BP 2009, 2014; © OECD/IEA, WEO 2012)

Fig. 4.3 Energy imports from North America (BP 2009, 2014; © OECD/IEA, WEO 2012)

Production and Reserves in North America (BP 2014; © OECD/IEA, WEO 2012)

Fig. 4.4 Production and Reserves in North America (BP 2014; © OECD/IEA, WEO 2012)

Production and Reserves in South America (BP 2014; © OECD/IEA, WEO 2012)

Fig. 4.5 Production and Reserves in South America (BP 2014; © OECD/IEA, WEO 2012)

independence of the region would not be put at risk in the short term, both for oil and natural gas.

South America also has important fossil fuel reserves. “Proven” reserves represent 140 years of oil production and almost 50 years of natural gas at the current pace. The continent has about 300 years of “retrievable” oil reserves and 500 years of natural gas. South America is thus completely autonomous from an energy standpoint and an attractive complement of resources to North America. Despite a projected 50% growth in energy consumption in the next 20 years, the reserves will be depleted at a low rate with regards the total volume available. Still, there is a need to convert retrievable reserves into “proven” reserves. A high enough oil price (or natural gas price) will be required to trigger this (Fig. 4.5).

The American continent as a whole (i.e. North America and South America) thus represents 35% of global fossil fuel resources, 25% of natural gas and 50% of oil reserves, while its population corresponds to only 14% of the world population. Twenty years back, its identified resources were twice lower.

This evolution of scale is clearly a change of paradigm for the continent and should impact the way it (particularly North America) deals with other regions of the world.

Given that North America theoretically has over 400 years of oil production reserves and that South America also shows spectacular potential, the United States energy policy could evolve radically. Of course, the historical presence of the United States in the Middle East would not change dramatically in the coming few years. As well, “proven” reserves only amount up to 10% of the total of “retrievable” reserves. If a sustained price war was to last between the United States (shale oil producers) and the Middle East (Saudi Arabia in particular), the foreign policy of the United States in the region could be modified. With 10% of total energy consumed in North America, the market share of the Middle East has significantly dropped in the past few years, together with its influence. The consequences of this fact of oil geopolitics remain to be written.

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