Oil & Gas Industry

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Oil & Gas Industry

There are many ways to look at the oil and gas industry.

From a personal perspective, oil and gas provide the world’s 7 billion people with 60 percent of their daily energy needs. The other 40 percent comes from coal, nuclear and hydroelectric power, “renewables” like wind, solar and tidal power, and biomass products such as firewood.

As fuels, they keep us warm in cold weather and cool in hot weather; they cook our food and heat our water; they generate our electricity and power our appliances; and they take us by car, bus, train, ship or plane to places near and distant. We all feel the economic pinch when the prices of gasoline , home heating fuel or electricity increase sharply, even though in many developed countries, they still cost less than some brands of bottled water!

From a business perspective, oil and gas represent global commerce on a massive scale . World energy markets are continually expanding, and companies spend billions of dollars annually to maintain and increase their oil and gas production. Over 200 countries have invited companies to negotiate for the right to explore their lands or territorial waters, hoping that they will find and produce oil and gas, create local jobs and provide billions of dollars in national revenues.

From a geopolitical perspective, large quantities of oil and gas flow daily from “exporting” regions such as the Middle East, Africa and Latin America to “importing” regions such as North America, Europe and the Far East. This creates political, trade, economic and even national security concerns on both sides (Figure 4). Oil and gas exporters want to maximize their revenues and improve their trade balances while maintaining control and sovereignty over their natural resources. At the same time, importing nations want to minimize trade deficits and ensure a steady, reliable oil supply. China, for example, has recognized that it must obtain access to oil in order to continue its long-term sustained growth and is actively seeking new sources of supply in the major producing companies.

From an internal policy perspective, producing countries continually wrestle with questions of how best to develop their resources and attain long-term sustainable benefits for their people. At the same time, consuming countries are always considering how to reduce their dependence on imported oil, either by imposing higher energy taxes to spur conservation, tapping into domestic resources such as coal (less costly but more polluting than imported oil) or developing alternative energy sources such as nuclear power

These issues have major long-term impacts, both within individual countries and on the world at large, even affecting such fundamental issues as war and peace.

Finally, from a health, safety and environmental (HSE) perspective, there is a continuous concern for safety in oil and gas operations, the impact that new projects have on surface environments, the possibility of oil spills and the effect of pollutants such as CO2 (carbon dioxide, a product of hydrocarbon combustion) on global climate change and air quality