Environmentalists hoping that oil production will peak in 2014 will be disappointed. New supplies will comfortably outstrip fresh demand, preventing prices from rising. Countries leading the way will include Brazil, Iraq, America and Canada. North America is a microcosm of the supply-demand discord. As in Europe, more efficient cars will suppress demand, yet American shale oil and Canadian oil-sands production will pour onto the market faster than pipelines can catch up. Other countries (Argentina, for instance, and China) that are trying to emulate America’s unconventional success face geological and other problems. But America will proceed serenely to production of almost 11m barrels of oil a day in 2014, surpassing Saudi Arabia and rivalling Russia.
While pressure to lift the ban on American oil exports intensifies, most American liquefied-natural-gas projects—many designed to ship burgeoning shale-gas supplies to Asia—will be awaiting approval. Australia is the main long-term threat to Qatar as the top gas producer. In 2014 the Queensland Curtis and the giant Gorgon plants will start liquefying gas for export, though delays and spiralling costs will slow Australian progress.
Gas is the least climate-warming fossil fuel, but as more is burnt, emissions will rise. In 2014 fossil-fuel emissions will reach 160% of 1990 levels. Coal use in China, which burns nearly half of the stuff, will creep up despite a push to cut pollution. Renewable energy will continue its rapid rise, but will satisfy only about 4% of the world’s ever-expanding energy needs.
To watch: Bureaucratic power. A draft US Environmental Protection Agency risk assessment of hydraulic fracturing, or fracking (a method used to extract oil and gas from shale rock), will be closely watched, but will barely affect drilling. The economic benefits of unlocking shale-trapped hydrocarbons mean politicians will not harry drillers much. But rules due out in June could stop any more coal-fired power plants being built in America.
