Oil & Gas Monitor Guest Article: The Top Six Issues and Opportunities Facing the Oil and Gas Industry in 2013

02/14/2013

The Energy Information Agency, in a recent report, stated that domestic crude oil production is projected to continue its steep rise due to improved production technologies especially in shale formations. An EIA official noted that the annual output increase in US crude production has experienced its largest rise since the beginning of US commercial oil extraction in 1859. In its report, the EIA indicates that oil imports are expected to plummet with gasoline consumption falling below earlier estimates, with greater use of clean energy and reduced energy imports. As for natural gas, the EIA reaches similar conclusions, forecasting “relatively low natural gas prices, facilitated by shale gas production, that will spur increased use in the industrial and electric power sectors, particularly over the next 15 years.” In the month preceding the EIA report, the International Energy Agency predicted that the U.S. would become the world’s largest oil producer prior to 2020, with North America becoming a net oil exporter by 2030.

The fast-rising tide of oil and gas production has raised boats outside of the hydrocarbon industry. It has been estimated that this boom has led to substantial new investments in steel manufacturing, petrochemicals production and fertilizer fabrication. The amounts spent on shale extraction alone, including the acquisition of mineral leases and drilling, are estimated to be in the hundreds of billions of dollars. The Eagle Ford Shale in South Texas, for example, presently ranks as the largest single oil and gas development in the world measured by capital expenditures, transforming an otherwise moribund local economy. An energy consulting firm has released an analysis indicating that unconventional oil and gas production has created more than 500,000 new jobs in Texas and is predicting nearly a million new jobs by 2020. The overall stimulus to the U.S. economy of the shale revolution and lower oil and gas prices has been substantial. Geopolitically, the shale revolution is seen as giving the United States significant additional influence and options.

Excerpted from Oil & Gas Monitors, February 14, 2013. To view full article, click here.

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