Tags: Citi | America | Global | Energy | Hub

Citi: North America Could Be Next Global Energy Hub

Wednesday, 21 Mar 2012 02:44 PM

North America could be the next global hub for energy, replacing the Middle East, if projects involving deepwater drilling, oil sands and natural gas reach their potential, a Citigroup report finds.

Boosting production could hike GDP by up to 2 percent to 3.3 percent — $370 billion to $624 billion — as a consequence of new production, a decline in energy consumption, and the economic activity generated along with ramped-up output, the report finds, according to Business Insider.

The bank adds that 3.6 million new jobs could be created by 2020 as a consequence of increased energy production, 600,000 of which would be devoted to oil and gas extraction while another 1.1 million would be created to meet demand in related industrial and manufacturing sectors.

National unemployment could subsequently drop by up to 1.1 percent.

"The coming generation of Americans and its leaders may be privileged to witness a remarkable resurgence of the American economy and industry, led by its energy sector, but spreading to the rest of the manufacturing sector and beyond, a potential minor Industrial Revolution," Citi analysts conclude, Business Insider adds.

The U.S. became a net exporter of refined oil products in 2011, for the first time since 1949, according to the Energy Department, although it still remains a net importer of crude oil, shipping in about 9 million barrels per day, according to CNBC.

Some experts, however, doubt the U.S. in itself will ever become a large exporter of energy any time soon, as dependence on foreign crude won't ease, while the country lacks infrastructure to export liquefied natural gas.

"As U.S. oil demand declines because of more efficient use, the U.S. will still remain dependent on imports from Canada, and to a lesser degree, the Middle East," Alejandro Barbajosa of Argus Media, which specializes in data and information for the energy industry, tells CNBC.

"North America does not have the capacity surplus that the Middle East has. It is unlikely that it becomes the next Middle East in terms of oil and gas exports."

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