Change Is Afoot
The global oil & gas industry has been recently undergone a significant transformation that looks likely to continue in spite of the recent recovery in the price of crude oil.
Chief among the drivers of this change is that key stakeholders – from governments to private companies and financial institutions – are investing in the development of technologies and policies that will reduce emissions globally and achieve lower carbon footprints in the coming decades. As a result of these technological advances, our reliance on fossil fuels such as coal will gradually decline as cleaner sources in natural gas and renewables become more prevalent.
Gas, which generates power on a consistent and steady basis, will remain a primary source of electricity as a backup to renewables that at times generate power only intermittently. Furthermore, as the world experiences a sustained period of economic growth in the coming decades, many economies are turning to natural gas in order to meet their growing electricity needs.
These trends mean that natural gas is predicted to grow into one of the world’s leading energy sources by 2040, when global oil demand is set to plateau due in large part to developments in electric vehicles and renewables for power generation. It’s not all bad news for oil, though: economic growth will see billions of people enter the middle classes in the coming decade, and increased demand for consumer goods will boost petrochemical demand.
What’s to Come
With the industry facing an exciting yet uncertain future, Mitsubishi Heavy Industries (MHI) Group has released an Oil & Gas Outlook that examines key trends likely to impact the industry in the coming twenty years. Among other topics, the report explores:
Shifting Demand: As fuel efficiency improves across the board, EV technology advances, and rapidly-developing economies continue to develop, the industry is poised to see a plateau in oil demand and increased consumption of natural gas.
Changing Strategies: Over the next twenty years, operators will need to meet global energy demand while running successful businesses and remaining in compliance with environmental standards. This trio of factors will drive developments in technology and fundamental shifts in business strategy.
New Technologies: From improved energy storage and distribution to automation and digitalization, new technologies in the global oil & gas industry will lead to advances in efficiency and sustainability that will meet the industry’s demands for decades to come.
To learn more about MHI’s industry outlook and to download the full report, click here.
A version of this article was previously published on Forbes BrandVoice.