29 Mar Oil and Gas Future
What is the “Oil and Gas Future”?
It’s no secret that the economic downturn of 2015/16 in the oil and gas industry was an eye opener. The general laws of supply and demand are more than just guidelines when looking at production and what it really boils down to is: there is such thing as too much oil. However t, at’s soon to be in the past so lets look to the “Oil and Gas Future”.
Every one of us was affected by the price per barrel from layoffs to how much we pay at the pump and that scares people.
Now people are focused, more than ever on whether oil has a place in our world and what can we do for alternative energy? That’s all very well said but a future without oil does not seem particularly bright.
Alternative energy can only go so far.
“Oil and Gas Future” in 2040
If we look at the “Energy Demand Varies by Sector” graph from ExxonMobil we can see oil and gas continuing to be in high demand all the way to 2040.
These predictions consider a multitude of variables: from current growth in demand to the likelihood use of alternative energy.
From an energy point of view oil and gas both show overall growth across all sectors whereas alternative energies are predicted to grow mainly for electricity generation.
The “Oil and Gas Future” is looking brighter and brighter.
What About Electric Cars
Electric cars and hybrids do pose somewhat of a threat to the oil and gas industry but the truth is, we aren’t there yet. Charging an electric car requires substantial amounts of electricity and unless you live in the United States, it’s going to be hard to come across a Telsa supercharging station.
This means charging electric cars will mainly happen at home. This is where you can see how oil and gas fit in. If the homes electricity generation is powered by oil and gas then the electric cars will spend similar amounts of oil and gas to run.
Not only that but not everyone wants an electric car. Traditional combustible engines are cheaper to purchase to the average consumer.
Energy and transportation aside, when we look at the downstream uses of oil and it’s not just limited to energy. Pick up any plastic and if it’s not 100% recycled it was likely made from oil and gas feedstocks.
Now imagine all the plastic in production to date. That’s a lot of oil and gas being used and will continue to be used for generations.
As the population grows the demand for “things” will naturally increase along with it. With technology at its current state and human intervention, we can only recycle so much. Even so, as things change the downstream uses will continue to be a part of everything, from wire coverings to plastic dinosaurs. The “Oil and Gas Future” will look a lot like today but with higher demand levels.
If you’re worried about the oil and gas industry today, don’t. The world’s “Oil and Gas Future” continues to look promising. Just because producers are over-producing now, doesn’t mean we will have a constant surplus. The industry will bounce back as economic waves always do, it just takes time. From $30 to $80 a barrel, oil will be relevant for years to come. Make sure your business is prepared.