Predicting exactly what the oil and gas industry will look like in 20 years or more is very difficult. There are always unforeseen factors that have a potentially destructive force that can negate any forecast, which is why long-term forecasts tend to be vague. Unless they are related to oil and gas. This is said by the material of experts from the OilPrice resource.
When it comes to oil and gas, there are two schools of long-term forecasting, and they both contradict each other. One school, called the Transition School, argues that electrifying transportation and transforming power generation will eventually lead to the demise of oil and gas as the commodities that underpin the global economy.
Another direction is convinced that fossil fuels will forever remain the basis of the global economy. Representatives of this school argue that the current approach to transport electrification and the transformation of energy production can never work as it should, mainly because of the laws of physics. And for this reason, the demand for oil and gas will continue to persist for decades.
Vehicles have become electrified quite rapidly over the past couple of years, primarily in the passenger car segment, with EVs accounting for an increasingly large share of total sales in some countries such as the UK, EU and California. However, this did not affect oil demand.
Regardless, a number of factors cloud future forecasts for oil and gas production. The electrification of transport could be the main factor in reducing the demand for raw materials. Oil industry heavyweights say the sector continues to be structurally underfunded.
The one conclusion about the future of the oil and gas industry that all the experts agree on is that developed countries will increase their energy efficiency over the next few decades, and that developing countries, which account for 80% of the world’s population, will use more energy in an effort to raise living standards. This paradox, which explains the increase in demand for fossil raw materials as the world strives to meet environmental standards, shows a distortion of the global economic system.
In the years to come, a dispute will arise over the main issue of the future of the industry. Its essence lies in the fact that it is cheaper. Some people think they know the answer, and it’s wind and solar power. Other experts with some knowledge of the mining industry and especially of geopolitics will insist on the primacy of conventional fuels.
Photos used: pxhere.com
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