Comments: Looking Ahead (April 2010)
- John Donnelly (JPT Editor)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- April 2010
- Document Type
- Journal Paper
- 16 - 16
- 2010. Society of Petroleum Engineers
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- 33 since 2007
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Every year, IHS/Cambridge Energy Research Associates brings together some of the world’s top energy executives to Houston for a weeklong conference. The event acts as sort of a state-of-the-industry temperature check and spawns discussion about where the industry is now and where it is heading. Last year’s theme was surviving financial turbulence; this year’s reflected the sense of recovery both in the industry and world economies.
Amid the panel sessions and more focused breakout sessions, a general consensus arose about what may lie ahead for the oil and gas industry in the near future.
- The recent highly publicized shale gas plays in the US have the potential to be one of the most significant developments in decades, and could decidedly change the industry—including markets and trade, investment, and supply/demand fundamentals. But this is not just a North American phenomenon—there is huge potential for unconventional-gas development in other parts of the world.
- Thanks to the breakthroughs in shale production and global liquefied natural gas projects, gas can no longer be thought of as just a “bridge” fuel to future alternative energy.
- Despite all of the talk of alternative energy sources the past few years, hydrocarbons will still be the major source of energy supply for at least the next 20 years and likely much longer.
- Globalization of supply has existed for years, as producers around the world focused on key demand centers such as the US, western Europe, and Japan. But demand in these regions is peaking and the world is now witnessing a globalization of demand.
- And the world will need all energy resources—hydrocarbons, nuclear, solar, wind, etc. to meet future world energy demand. There is no going back in the developing world as it moves toward a more energy-rich, more affluent, and more efficient economy and lifestyle.
- Although global warming has lost policy momentum this year after the Copenhagen conference and controversy surrounding how some data were arrived at, the industry will continue to confront legislative and public concern over “climate change.” The march toward a lower-carbon future will continue, although many may not be aware of how difficult and expensive that transition will likely be.
- The key to increasing supplies to meet growing demand lies in technology. The oil and gas industry certainly appears to be entering an era of transition. Oil supply growth appears to becoming more concentrated with only about a dozen or so regions with potential to grow, including Russia, Africa, Eurasia, and the Middle East. Demand growth has decidedly shifted to developing economies. And oil is now intertwined more than ever with financial and commodity markets as well as the climate debate, which will lead to not only the need for more transparency in the future but more regulation.
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