Oil prices to drop as shale oil flows By Flint Duxfield Monday, 25/02/2013
0 A consultant's report says oil prices could drop as much as 40 per cent in the next two decades due to the growth of the shale oil industry. Price Waterhouse Coopers predicts the industry could provide around 14 million barrels of oil per day by 2035 - about 12 per cent of the global oil supply. Lead energy analyst with Price Waterhouse Coopers, Jock O'Callaghan, says it will take significant investment to launch a shale oil industry in Australia. "Scale that makes it big enough to make it worth feasible require will require some really tough decisions and lots of money put into it," he said. "Just as we've seen with LNG [natural gas], it's not like you can do these things on a small scale. "It's not just a case of bigger is better, but bigger is necessary." The International Energy Agency estimates that shale oil expansion in the United States will see the US overtake Saudi Arabia and Russia as the world's biggest oil producer by the end of the decade. Mr O'Callaghan says the impacts of a lower oil price will have flow on effects throughout the entire economy. "You've got this overriding effect of everyone's cost going down for fuel," he said. "And then you have the industries which are dependent on oil where there costs will come down. "Manufacturing, industrial, transport and fuel costs for agriculture is another." If the expansion of shale oil continues as planned, Mr O'Callaghan says, the lower oil price could also have impacts on the renewable sector. "If the investment dollar around the world might have been earmarked towards renewables, this presents another option."