While the energy commodity prices increased in the second half of 2017, after decreasing nearly 20% in the first half, industry pundits are quick to predict a bright future in 2018 for oil & gas and renewables.
Statista reports that in a recent forecast, the U.S. is set to become the world's biggest oil producer in 2018, surpassing Russia and Saudi Arabia.
Under the Trump administration, the country is intent on making such predictions a reality, with a new plan just announced for 2019, opening up over 90% of U.S. offshore territory to oil and gas drilling.
Using U.S. Energy Information Administration (EIA) data, Statista produced the graphic below that shows how oil production has developed over the last few decades, with the 10,000 mark getting closer and closer.
The EIA suggests that Gasoline prices did not increase as much as distillate and crude oil prices in 2017. U.S. gasoline consumption growth slowed from 2016 to 2017, compared with the prior two years when sharp declines in gasoline prices, among other factors, contributed to strong gasoline consumption growth.
Still, with a brighter outlook for 2018, some experts say that optimization, watching pennies and moving faster into digital transformation is the safe way to proceed into the future.
"Lower oil and gas prices have not only have forced oil and gas companies to reduce costs but are also a catalyst. Oil and gas companies are optimizing processes, while setting aside innovation funding to digitally transform their business. Among the focus areas are: moving to cloud, applying mobility applications, integrated platforms for big data and analytics, advanced analytics and cognitive and other important initiatives such as Cybersecurity, and asset performance management (APM)," said Chris Niven, research director of Oil and Gas, IDC Energy Insights. "Our research shows that oil and gas companies are rapidly adopting new and innovative solutions that help automate all activities and bring a holistic view of operations with greater insight and control to become more resilient, agile, and adaptable to change."
Jeff Wiese, VP for pipeline integrity services at TRC Solutions in D.C. suggests that operators will face the growing change of managing the growing tidal wave of digital data, and the attendant challenge of extracting meaningful information from the data.
“Getting the operator’s house in order with GIS and analytical tools and models will be a growth market,” Wiese predicts. “Integration of legacy systems and databases will be a chore, but a one and done approach is a hill that must be taken.”
Wiese further suggests that advancements in the use of machine learning, AI, and natural language processing will be made, but is unlikely to help conquer the wave of digital data until operators ensure the accuracy of existing data, and capture all additional data in a digital form.
The ever-trending digital conversation is relevant on the renewable energy side of things, as well.
Jennifer Runyon, chief editor of Renewable Energy World predicts that we will see the continued convergence of digital technologies and renewables. More smart inverters communicating with utilities, more autonomous drones for wind turbine and solar farm inspections, and more batteries and battery energy management systems on the grid.
“All of this will lead to a big uptick in the global installed capacity of renewables worldwide in 2018,” Runyon shared.
“FERC is at full strength with a republican majority and PHMSA finally has political leadership and can be now expected to be moving rules,” Wiese explained. “I look for compromises but progress on the so-called Mega Rule (gas transmission and gather).”
Wiese further predicts that underground natural gas storage rules will finalize and inspections will begin.
As far as prices go, Wiese is wary of predicting the future, but goes on to say, “I believe that prices will slowly firm, but not skyrocket short of a major political development overseas.”
Wiese suggests that the slow increase in price will accelerate proposals to connect up basins like the Permian and Haynesville to existing and export markets and that some LNG export proposals will advance, as well as the pipelines to connect them to supply centers.
Everyone is quick to say that oil & gas prices will never be what they were in 2014, and all predict, without doubts, that going digital is the key to the future and to keep an eye on renewables.
All in all, the future of energy looks bright – at least brighter than the past three years.