The assessment that the US could emerge as the world’s largest oil producer before 2020 and even transition to full self- sufficiency by 2035 was the undoubted highlight of the International Energy Agency’s (IEA’s) ‘World Energy Outlook 2012’ report, released last week. The world’s largest economy currently imports around 20% of its total energy needs.

The report says growing US output (which could exceed that of Saudi Arabia by 2017), together with new fuel-efficiency measures, should result in a continued decline in US oil imports, to the extent that North America becomes a net oil exporter by around 2030.

Some have already described the IEA’s US forecast as “quite optimistic”. But the report does serve to underline an established megatrend, which is likely to have far-reaching political and economic consequences in the decades to come.

But there was another more worrying point contained within the report – one that requires urgent and serious attention from policymakers, energy companies and society as a whole.

The document notes that energy is becoming a “thirstier resource”, with water needs for energy production poised to grow at twice the rate of actual energy demand.

“We estimate that water withdrawals for energy production in 2010 were 583-billion cubic metres (bcm),” the IEA notes, explaining that the water is used not only in electricity generation, but in the extraction, transport and processing of oil, gas and coal, and, increasingly, to grow biofuel crops.

“Of that, water consumption – the volume withdrawn but not returned to its source – was 66 bcm. The projected rise in water consumption of 85% over the period to 2035 reflects a move towards more water-intensive power generation and expanding output of biofuels.”

In other words, water is going to play an increasingly important role as countries and companies assess the viability of future energy projects – particularly as many energy projects will be competing with other social and economic forces for the same water resource.

In some regions, water constraints are already affecting the reliability of existing energy facilities and raising operating costs.

“The vulnerability of the energy sector to water constraints is widely spread geographically, affecting, among others, shale gas development and power generation in parts of China and the US, the operation of India’s highly water-intensive fleet of power plants, Canadian oil sands production and the maintenance of oilfield pressures in Iraq.

“Managing the energy sector’s water vulnerabilities will require deployment of better technology and greater integration of energy and water policies,” the authors conclude.

For a water-scare country such as South Africa, striking the correct energy-water balance is going to be essential.

It will also require far more joined-up planning.

For instance, the next version of the Integrated Resource Plan for electricity will surely not only have to include adjustments for South Africa’s climate commitments, but should also highlight some of the trade-offs that may be required to ensure that the energy sector uses its fair share, and no more, of the country’s (and the region’s) water resources.