As an oilman from a producer country and region, I am always interested in what goes on around the world in these fields. I am always enthusiastic to learn that some discovery has been made somewhere else or that a certain country has increased its production or even that others have developed so much alternative energy away from oil.

This is because human existence cannot be measured by what remains of the resources of oil and gas and that life must go on after oil and gas, and coal for that matter, is no more. I consider all energy forms supportive of each other and that each must be viewed on merits rather than on its impact on unholy battle against oil and OPEC.

But I am distressed by reports that delight in certain developments that are considered to be diminishing the energy power of one region vis-à-vis others instead of considering them as an enhancement of resources for the wellbeing of all.

Under its Power and Growth Initiative, the Manhattan Institute published a report on July 1, titled Unleashing the North American Energy Colossus: Hydrocarbons Can Fuel Growth and Prosperity written by Mark P. Mills, adjunct fellow of the Institute, it is clear that the writer while correctly stating the enormous energy resources of North America, is simply aiming at diminishing those of the Middle East. He says that “the United States, Canada, and Mexico are awash in hydrocarbon resources: oil, natural gas, and coal. The total North American hydrocarbon resource base is more than four times greater than all the resources extant in the Middle East.” While this is correct, it is strange that coal resources are lumped together with the much smaller oil and gas resources. It is true that coal is a hydrocarbon but its production and use are distinct from those of oil and gas and always talked about separately.

The report admits that “resources are distinct from reserves”, and North America is no match to the Middle East in terms of reserves until such time that these resources are actually converted to reserves by the availability of technology and supportive market forces especially with respect to price. North American oil reserves at the end of 2010 are close to 74 billion barrels compared to 753 billion in the Middle East and its gas reserves are close to 10 trillion cubic metres compared to about 76 in the Middle East.

Only in coal, is North America far richer with reserves of about 922 billion barrels of oil equivalent where the Middle East has none. But the versatility and environmental advantages of oil and gas are eating into coal’s market share gradually and with prices of natural gas in the US as low as they are, no one will invest in coal no matter how big the resource base.

The report relies so much on technological progress to enhance the hydrocarbons availability, but technology will do the same to other regions as well. Admittedly North America may gain more by technological advances due to its stage of development and the fact that its new oil and gas resources are essentially non-conventional and, as we witnessed by the increase in gas production in the last few years, the fracking technology was instrumental in this increase.

But in the euphoria of these developments, the writer does not discuss the enormous environmental problems associated with fracking of shale oil and gas in the US or the extraction of oil sands in Canada. The water resources needed especially in the US are a concern to many states and they may hinder further development.

The report adds that “the growing continental surplus of hydrocarbons points to North America effectively becoming the new Middle East by the next decade; a growing hydrocarbon net exporting centre.” Perhaps North America will export some gas and it can certainly export a lot of coal but there is no analysis anywhere where it can be a net exporter of oil. The report suggests that “the US will surpass Russia to become the world’s second-largest oil producer by 2020 assuming that the current “enhanced” trajectory is permitted to continue.” Even if this optimistic statement turns out to be correct the US will still be a large importer of oil and Canada and Mexico surpluses will not be enough to balance as the report puts it mildly by saying “the net effect of the trajectory that the US is now on, will lead to essentially net zero imports for total hydrocarbon needs (though some continuing oil imports).”

No doubt the US and Canada have enhanced their oil and gas production beyond what was thought possible before but the less costly and easy to extract oil and gas is still somewhere else.

The writer is the former head of the Energy Studies Department in the Opec Secretariat in Vienna.