In our first blog on news in the Gas Industry, we dove into the significance of the industry and where its headed. At GCMS, we are immersed into a variety of industries and want to keep you informed on the latest news across each one. This blog we will be focusing on even more future developments in the Gas Industry and upcoming trends we can expect to see in the Oil Industry, a brother-sister pair in the market.
Where The Gas Industry is Going
The prevalence of gas in today’s economy is huge. The growth of the industry is not slowing down anytime soon. According to the IEA’s annual gas market report for 2018 claims that gas demand will increase at a rate of 1.6% worldwide annually, reaching 4,100 billion cubic meters (bcm) in 2023. This is an increase of 360 bcm since 2017 at 3,740 bcm.
China has dominated in gas demand, with a 60% growth rate within a 5-year span from 2017 to 2023. The country accounts for 37% of estimated global growth by 2023, as well. With such a vast rate of growth, China will bypass Japan as the world’s largest natural gas importer by 2019. In the Eastern part of the country, the United States will be the leading gas producer in terms of supply of gas. Price competitiveness is crucial for gas to stay relevant in the emerging markets in years to come. To increase the demand of gas, the industry needs to find ways to improve air pollution and reduce the industry’s environmental footprint. This will make the industry cost-effective, eco-friendly, and adaptable among industry changes.
Trends in The Oil Industry
Despite the high production of oil in the United States, experts say that the industry is moving from an oil oversupply to a “supply crunch.” They predict by the end of the decade oil companies will be struggling to keep up with high demand of oil. On a positive note, the industry has recovered from high oil prices and production inefficiencies. The price is right and that is the driving force behind the current overall success of the industry.
To keep with the shortage in supply that the industry is seeing, companies need to focus on continuing to improve production rates and utilizing new, more advanced technologies to do so. To prepare for the future, their overall strategies and capital discipline must focus on growth. Another trend that has emerged in recent years is lack of new oil discoveries. At the end of 2017, the number of new oil and gas discoveries was at its lowest volume since the 1950s. The low number of 2017 discoveries, which amounted to 3.5 billion barrels of liquids, covered only 10 percent of oil demand. Researchers are finding it is more challenging to locate new spots for oil digging that haven’t already been “discovered.”
The last major trend that has emerged in the oil industry is lack of spending i.e. deferred maintenance. To reduce costs, companies have cut funding and laid off employees to reduce costs. Although helping in funds, these acts have hurt the upkeep of new skills workers need to adopt to keep up with occurring changes in the industry.
Although there are negative trends in the horizon of oil, industry operators are optimistic that the future looks bright. Both gas and oil companies have made and continue to make strides to improve production techniques, use proper resources, and adapt to the evolving industry.
To see how GCMS can improve your plant’s productivity and make your processes more efficient in the industry, contact us here.