OPEC’s upstream investments: Cooperation between producers and consumers is key

In the International Energy Outlook 2011, the U.S. Energy Information Administration’s (EIA) National Energy Modeling System forecasts that domestic oil (liquid fuels) consumption will increase 5% to 20% in the next 20 years.2 With just 2% of the world’s proven endowment, and despite recent strides in domestic production, half of the 19.5 million bpd of liquids that the U.S. uses is imported from other countries. Canada’s massive oil sands resource in Alberta holds some 180 billion bbl of “free market” oil, but policy, such as the delay of the Keystone XL oil pipeline expansion project, could limit its availability to the U.S. market. Mexico, the next most important U.S. supplier, passed peak production in 2005, and its own growing economy will require greater amounts of fuel. Meanwhile, as demonstrated by the “NOPEC bill,” the national security mission to break the U.S. free from the Organization of the Petroleum Exporting Countries (OPEC) has been a steady drumbeat.