If the IEA is right, by 2020, North America will produce more oil than Saudi Arabia.

Each year, the International Energy Agency (IEA) prepares a World Energy Outlook report that peeks ahead to 2035. The organization tries to predict the trends in energy generation and use that will get us there. The reports are a mix of extrapolating current trends and predicting future ones. Although they often miss the mark, they also often provide a provocative look at the big picture of the energy economy, pointing out things that can be easy to miss when the focus tends to be on the day-to-day fluctuations in prices.

This year’s was no exception. One of the key conclusions is that the US could reach energy self-sufficiency by 2020. That doesn’t mean we’ll stop importing oil; rather, we’ll be exporting so much coal and natural gas that it will offset our oil imports. Those imports will also be kept in check by a combination of increased fuel efficiency and expanded extraction within the US.

The overall conclusion of the report is that the world will remain addicted to fossil fuels for the indefinite future. This is in part because of subsidies. Around the globe, governments are subsidizing their use to the tune of over half a trillion dollars. That’s over six times the subsidies given to renewable energy, and up 30 percent from the year before.

But that addiction is being fed by a technology the IEA didn’t see coming in earlier years: the fracking techniques that open up underground deposits where rocks had previously trapped hydrocarbons. Fracking has dramatically lowered the cost of energy in the US and has started to displace enough coal for power generation that the US is exporting its excess (primarily to Europe). Longer term, the IEA expects the US will become a net exporter of natural gas as well.

But the surprise in this report comes in terms of oil, where the IEA expects fracking techniques will trigger a similar revolution of such scale that the US will produce more oil than Saudi Arabia by 2020. Combined with the Canadian oil sands and traditional sources of oil, this boom will make North America a net exporter of oil by the 2030s. That boom in production will come at a time where fuel economy standards for vehicles will start to have a serious impact on the US’s gasoline use, helping to push the country toward a net energy independence.

(The other big story in oil is that Iraq will likely return to its status as a major producer, displacing Russia as the second largest exporter. The country will also ship its oil to Asia, since North America won’t need it.)

They key role of energy efficiency in driving the US trends in oil use isn’t happening more widely, and the IEA can barely contain its disappointment. It estimates that 80 percent of the efficiency allowed by current technology is untapped in the building sector, and another 50 percent in industry. Full adoption of known efficiency measures would allow oil demand to peak in 2020 and decline by over a Russia’s worth of crude by 2035. Carbon dioxide emissions would follow a similar trajectory. More generally, we could save a fifth of our current global energy demand by that year at a cost of $11.8 trillion, and the savings would easily offset the expense.

The other big trend will be the continued growth of renewable energy. Collectively, these technologies (which include things like hydropower and biomass) are on track to become the second largest source of energy generation as early as 2015, and will be close to displacing coal as the top source by 2035.

In terms of other energy sources, the IEA recognizes that nuclear has an uncertain future in the wake of Fukushima. Coal’s future will depend in part on how seriously we take carbon emissions. Its continued use will likely require us to eventually adopt carbon capture and storage on a wide scale if we’re to limit climate change to 2°C.

Is there anything on the horizon that could confound all of these predictions? The report points out that just about every form of energy extraction or generation requires water: biofuels and hydropower among the renewables, nuclear and coal in generation, and fracking for oil and gas (oil sand extraction is also water intensive). Water is a scarce resource in many areas of the globe, and there are many other needs competing for its use. Future projects that aren’t wind or solar may find their viability threatened by factors that have little to do with the energy economy.

Here is the IAE report