Sustainability Projections of the Oil and Gas Industry
A major concern among just about everyone from the leading industry experts to the everyday consumer is, of course, the sustainability of the oil and gas industry. We rely on these substances for things like keeping our vehicles running, powering industrial machinery to build and expand our cities, and even for warming our homes.
The concern for what the future looks like for the oil and gas industry is a very valid one. Every day, this industry is threatened by emerging technologies that haven’t quite caught up yet, among a multitude of other proponents that are opposed to the continued use of fossil fuels.
And that’s not even the scary part…
In this article, we are going to look at the two trends that we have identified as potential detriments to the oil and gas industry leading up to roughly 2040; increased energy demand and consumption, and the ever-increasing cost of oil extraction processes.
Now, neither of these are inherently positive or negative, but they do clearly show the direction that we are headed into as a global industry. What we do with the information is yet to be seen.
Increased Energy Demand And Usage
The first thing that we have observed, as we are sure everyone has as well, is that the world continues to gobble up energy as if it were a race. If we look at the data from the World Urbanization Prospects study that was prepared and performed by the United Nations Organization back in 2011, it is easy to see that the population is rapidly growing. In the study, it was found that the global population wasn’t going to stop growing anytime soon and that by 2040 the population will be somewhere near 8.9 billion. That means that the global population is growing at a rate of 0.8% per year.
A massive population growth such as this, in and of itself indicates that there is going to be a steady rise in energy demand and usage. On one hand, this seems like great news if there is enough supply to meet the demand. On the other hand, if we are not ready for it, it is going to drive oil and gas prices sky-high.
Cost Of Oil Extraction
The second thing that we need to be very weary of is the ever-rising cost of extracting oil. While demand increases, the supply will have to be able to keep up. This means more machines, more gas to power them, and increasingly complex methods, operations, and machines.
Now, you might be wondering… Why do we need more complex machines or methods of extraction than those we have already at our disposal?
This is because, if we exclude the oil reserves of the Middle East, most of the oil that remains untouched is in areas that present a whole new set of challenges than what the global industry considers commonplace or has ever had the chance to see.
This includes places such as Canada, Russia, and Venezuela. These areas contain heavy oil or are in tar pits.
Looking at all data available, we can safely assume that by 2040, we will already be looking into extracting oil from these locations, and if the cost is reflected too harshly to the end consumer, we could potentially be looking at sever decrease in demand as a result.
While these two areas of potential complications are certainly something we all need to consider before progressing too quickly, there are other factors to think about as well. But we will save those projections for another time.
For now, our biggest concerns in this global industry revolve around 2 things; supply and demand, and money. If we don’t ease into the future carefully however, we face bleeding ourselves dry and watch the collapse of an industry.
But, if we can continue to balance those, the industry is going to keep flourishing. New
methods could be discovered, machinery constructed, and quite possibly in all that advancement, we may stumble upon a way to make it even better.