If the Middle East fails to invest adequately in its oil fields, global oil prices could spike by an additional $15 per barrel in the 2020s. That comes from the International Energy Agency in a new report assessing global energy investment needs through 2035.
The report estimates the investment in energy required to meet global demand over the next several decades. For example, $1.6 trillion was spent on energy supplies across the globe in 2013. That figure is expected to climb to $2 trillion annually over the next twenty years, with more than half of the annual sum going to offset declining production. In other words, the world will be forced to cough up over $1 trillion each year just to keep energy production flat.
While those figures are hard to fathom, they point to a future in which fossil fuels – oil in particular – become more expensive as cheaper reserves decline and producers go after harder-to-reach resources.
The U.S. has become infatuated with shale oil and gas, and has been lulled into a false sense of confidence because of rising oil production in North Dakota and Texas. The oil industry has been busy convincing the American public that we are destined for energy “superpower” status.