America loves its oil while Australia goes for gas

The International Energy Agency predicted recently that in the next five years, the US will surpass Russia to take the title of the world’s largest oil producer. By 2023, the US will supply the majority of worldwide growth in fuel supplies. US crude oil is expected to reach a record of 12.1 million barrels per day in 2023, up from 10.6 million per day this year with the current US output practically on par with Saudi Arabia. Thanks to horizontal drilling technologies, hydraulic fracturing and new infrastructure, in November 2017 US crude oil output hit an all time high beating a benchmark set 40 years ago.

The controversial Keystone XL pipeline project appears ready to start construction, but there are still attempts to block the pipeline that would link Canadian sand tar oil to American refineries. The dramatic growth in US oil production is a stark contrast to China’s bet on renewables expansion. Will Trump’s bet on oil outplay Xi’s vision for low carbon future? Only time will tell. Natural gas is seen as a critical transition fuel in the transition to a cleaner future. In the Southern Hemisphere, East Timor and Australia have settled a treaty on sea borders and a “pathway” to develop the Greater Sunrise offshore gas fields. On shore, a $750 million gas development by Santos GLNG in Queensland is set to create 400 construction jobs and boost gas production to 70% of the east coast supply.

Back in Washington, DC, Prime Minister Malcolm Turnbull’s recent meeting with President Trump yielded an Australia-United States Strategic Partnership on Energy in the Indo-Pacific. Despite this, when Australian trade minister Steve Ciobo recently exchanged words with US trade secretary Wilbur Ross, he was still left unsure about whether proposed US steel tariffs would apply to Australia. The announcement has created an awkward situation for the Australian government who believed that it had secured an exception mid last year. The story continues.

Read more: WSJ($) / CNBC / ABC / Queensland Gov / Prime Minister Malcolm Turnbull / The Guardian

Image: Shealah Craighead / Public Domain – Trump and Turnbull shaking hands

This story is taken from the 09 March 2018 edition of The Warren Centre’s Prototype newsletter. Sign up for the Prototype here.