The oil and gas industry is in a transitional phase. The sector is under increasing pressure in the US and abroad to reduce its carbon footprint. It’s also facing significant cost pressure as low energy prices persist.
Shell’s chief energy adviser Wim Thomas recently said the global oil oversupply, which has caused prices to plummet over the past two year, may not end until the second half of 2017.
“It can happen any time between the second half of this year and the second half of next year,” Thomas told Reuters.
Earlier this year oil prices fell more than 70 percent from 2014 highs and remain more than 50 percent below those levels.
The industry is also under threat from alternative fuels and battery technologies, which are gaining market shares of the transportation fuels, which account for 80 percent of the oil industry’s revenues. But according to a recent Lux Research report, big oil’s days of dominating the transportation fuel market may be coming to an end. “Oil’s dominant position in transportation fuels has proved impregnable for more than a century, but real threats abound now,” said Brent Giles, Lux research director and lead author of the report.
And now that US and China — the world’s two biggest carbon emitters — have ratified the Paris climate deal, pressure on big oil and gas to transition to cleaner energy sources will likely increase.
Business as usual for oil and gas companies is not an option.
To read the full article from Environmental Leader, please click here.
Where can you find Customer Services for WordPress