Why We Will Still Need Oil and Gas in the Future

Will the price of oil remain low, possibly for years to come? No one knows. But there is one lesson that the history of the oil and gas industry has taught us: Although the price of oil can swing wildly, the growth of demand is surprisingly stable. There have been price peaks above $140 and troughs below $20, but over the long term average global energy consumption has grown steadily between one and two percent annually. In addition, roughly five percent of existing production capacity has to be replaced every year in order to offset the decreasing yield of aging oilfields. Meanwhile, new oilfields are being developed and the output of existing fields is being increased through the injection of gas.

Automation and digitalization are expected to keep oil and gas competitive in the decades ahead. Whether we like it or not, every year the human race is likely to burn a bit more oil and gas than it did the year before. In absolute numbers, our demand for energy is growing. However, the proportion of oil and gas in the total amount of energy consumed could decline.

That will probably hold true until, one day in the future, it will be more economical to leave the remaining oil in the earth’s crust rather than extracting it. The necessary adjustments during this long period of transition will in any case bring great business opportunities for those who have the courage to innovate and try out new ways to produce and use oil and gas.

“When you look at the growth in consumption, it quickly becomes clear that oil and gas will remain very important for the next few decades at least, and Of course we also need renewable energy sources. At least for the time being, we simply need everything we have. And that includes oil and gas.