The Top Challenges Facing the Oil and Gas Industry
Every year brings new challenges and expectations for the oil and gas industry. Learn all about the industry’s 2020 trends with this overview.
No matter what part you play in the industry, it’s important to stay on top of news, trends, and other vital, ever-changing information. The oil and gas industry has its share of uncertainties, including economic fluctuations, trade agreements, and societal energy transitions. From contractors working with industrial pipeline products to the business executives taking major strides in the industry, everyone must shift and adjust to make the most of these changing circumstances. Stay on top of the latest news with these 2020 trends in the oil and gas industry.
The Effects of COVID-19
As the COVID-19 pandemic made its way across the world, it left a major impact on the oil and gas industry. Social distancing measures meant that fewer people were driving and flying. The sharp decrease in demand for oil and gas led to a price crash worse than any the industry has seen in recent years. With this decrease in revenue comes the threat of having to seal off wells and reduce production in order to lower the surplus of oil and gas. Meanwhile, though the oil and gas workforce remained essential and in business throughout the pandemic, it faced thousands of layoffs alongside many other of the nation’s industries. The future remains uncertain, but experts are hopeful that the right planning and timing can help the industry recover once more as the economy reopens.
Prioritizing Infrastructure
Meanwhile, the industry has become increasingly aware of the need for better energy infrastructure across the nation. Prioritizing the improvement of facilities and pipelines means bigger and better storage buildings, process facilities, and underground pipelines, all of which help to optimize logistics and supply chains. While this is a large investment to make, it has proven beneficial in allowing businesses to increase their capacity, deliver products faster, and overall improve the industry’s value chain.
More Focus on Sustainability
Environmental concern is not new to the oil and gas industry, which has spent the past several years increasing its focus on sustainability. This is another trend that continues into and likely beyond 2020. There are many aspects to this trend. One side of it includes the growing initiatives oil and gas companies are taking to reduce their own carbon footprints, such as reducing greenhouse gas emissions in their facilities and operations. Major members of the industry also continue to invest in renewable, low-carbon energy companies while also striving to meet the sustainability concerns of their stakeholders. All in all, this means continued environmental efforts across much of the industry.
A Resurgence for Natural Gas
While oil gets most of the industry’s attention—followed by a growing interest in solar and wind power—natural gas still holds an important corner of the market. In fact, a resurgence of interest in the natural gas sector is one of the top 2020 trends in the oil and gas industry. This likely comes from the fact that natural gas is a low-carbon alternative to oil, meaning it meets many sustainability and environmental concerns surrounding the industry. Natural gas has also become less expensive in North America because of the United States’ increased access to natural gas fields. All in all, the natural gas sector continues to grow in popularity and show potential for a bright, profitable future.
