Development in Oil and Gas Retail Industries
Research has shown that markets for petroleum and liquid fuels have been experiencing dynamic change in relation to demand and supply. For example, the markets have shown possible for new supplies of oil specifically from tight and shale resources. In the same regard, the demand for petroleum and petroleum products has been increasing in developing countries such India, China, and Middle East countries. On the other hand, the demand for liquid fuels among developed countries as the United States appears to have peaked. This can be attributed to long periods of unrelenting high oil prices and improvements in efficiency and conservation hence slowed or reduced growth in the demand for liquid liquids among mature oil consumers. This has led to the Europe and the United States reassessing long-term inclinations in liquid fuels markets (EIA 2014). This paper intends to examine the main components of this reassessments, risks, and opportunities for the future dynamics of the world oil and gas industry.
Main Components of the Reassessments
It is evident that Europe and the United States are interested in the sustainability of liquid fuels that are being consumed at a high rate among developing countries such as China and India (EIA 2014). Essentially, the demand for such products in emerging nations has been increasing. As a result, they are being consumed at a higher rate as compared to the rate of replenishing the same. This is worrying trend that needs to be addressed considering the fact that it compromises on future generations’ ability to access liquid fuels in the future. Essentially, Europe and the United States intend to provide a solution to this challenge. It is essential for them to find ways to reduce the demand. More and more emerging countries are consuming more liquid fuels on a daily basis. It is evident that many of them are committed to improving their economy and being ranked among developed nations. As such, they require more oil products. Nevertheless, their reliance on the scarce commodity can be addressed to avoid further increase in demand (Leal-Arcas, Filis, & Gosh 2014).
The issue of sustained high oil prices also needs to be addressed. It is evident that the world has been dealing with high oil prices for many years. Increased demand for the resources among developing countries is likely to result into a further increase in oil prices. Essentially, Europe and the United States are interested in stabilizing the oil prices to avoid further increment. For instance, they can reduce the demand by encouraging concerned countries to embrace the use of alternative sources of energy (Starr 2014).
It is also evident that the countries are considering looking for new sources of oil particularly from tight and shale resources (EIA 2014). This is an opportunity as well as a risk to the world. Shale gas can go a long way in boosting global recoverable natural gas resources. In the same regard, this can aid in the reduction of greenhouse gas emissions that have become a major concern to the world. Research has also shown that shale gas can lead to the creation of job opportunities. National energy supplies can also be boosted through the application of the same strategy. However, this also comes at a cost. Specifically, hydraulic fracturing involves the consumption of approximately 25 million litres of fresh water. Essentially, it is hard to develop shale resources in areas where fresh water is hard to find. Europe and the United States also intend to address such concerns (Leal-Arcas, Filis, & Gosh 2014).
Increased demand for liquid fuels poses an environmental threat. First growing emerging economies have failed to come up with strategies to ensure reduction in carbon emissions as a result of increased consumption of liquid oil. This is unlike the case with most developed countries. For example, the United States has been able to reduce carbon emission through increased efficiency and the use of alternative sources of energy. This is also the case with most developed European countries. The reassessment is also aimed at improving efficiency and carbon emission resulting from increased demand for liquid oil (Starr 2014).
In the same regard, the United States and Europe are concerned with environmental conservation. It is evident that the development of tight and shale resources pose a hazard to the environment. The same case applies to the extraction of oil. Many emerging markets are more interested in increasing the demand for the scarce resources despite the negative effects that may be associated with the same. Reassessments are also aimed at providing a lasting solution to this problem. Specifically, failure to handle the issue can have a negative impact on environmental conservation (Leal-Arcas, Filis, & Gosh 2014).
The reassessments are likely to result into a number of opportunities. For one, this will lead to environmental conservation. Essentially, Europe and the United States are likely to propose strategies that can help emerging markets to embrace social responsibility when consuming liquid fuels. Specifically, they will be able to avoid strategies that are likely to result into high levels of environmental degradation. It will also give the developing market the chance to embrace efficiency and conservation to reduce the consumption of the products (Starr 2014). Likewise, they will also have the opportunity to play a part in improving the protecting the environment against degradation to ensure a better tomorrow. Generally, the move by the United States and Europe to reassess the long-term trends of the fuel markets will make the world a better place (Bergsten 2013).
The oil and gas industry has been known to be a major contributor of environmental pollution. This is one of the main reasons as to why many developed nations have come up with stringent measures to ensure social responsibility among individuals and corporates. The reassessment gives the industry the opportunity to address some of the concerns raised by critics and individuals in the past. In particular, it can be able to play a role in protecting the environment. This will go a long way in changing people’s attitude towards the industry. Generally, oil and gas products will be consumed in moderation and in a responsible manner (Saulnier & Varella 2013).
Correspondingly, the reassessment will result into emerging markets such as China and India to embrace the use of alternative sources of energy. The current demand for liquid fuel is alarming. It is through the use of alternative sources of energy that the countries will be able to reduce their reliance on liquid fuels. Consequently, this will also lead to increased environmental protection. The use of alternative energy can also lead to the creation of job opportunities. This also implies that the reassessments can lead economic development especially among developing countries. Increased demand for alternative energy will lead to the development of their industry. However, one can easily argue that more jobs will be lost as a result of reduced demand for liquid fuels (Leal-Arcas, Filis, & Gosh 2014).
Similarly, the reassessments by the United States and Europe will also give the future generations the opportunity to access the scarce resources. In particular, they will also be able to access liquid fuels. In essence, the current demand for such resources can lead to their eventual depletion. In the end, the future generation may not be able to access the same (Hunt & Evans 2014). As mentioned earlier, the move by the United States and Europe will also lead to a better future with low levels of environmental pollution resulting from carbon emissions. There might no future not unless world leaders come together to handle the issue of environmental degradation. This is a problem that cannot be solved by one individual (Starr 2014).
The future oil and gas industry must also be forced to invest more and more in research and development. This is the only way in can be able to deal with increased demand for its products as well as environmental degradation. It is through continuous investment in research and development that developed countries such as United States and Europe have been able to reduce their reliance on liquid fuels, hence reduced demand. The global oil and gas industry can also benefit in a similar manner through investment in research and development. For instance, this will lead to the development of new environmental friendly ways of extracting oil to reduce environmental pollution. This will also lead to increased efficiency, hence low consumption of oil and gas products (Leal-Arcas, Filis, & Gosh 2014).
The reassessment can also enable the United States and Europe to address the issue of high oil prices. Specifically, they two regions can get the opportunity to find a lasting solution to the problem. For instance, they can come up with ways to reduce reliance on the scarce products. Normally, prices of products skyrocket when the demand is high. The problem is worsened when dealing with scarce resources. This implies that the reduction of demand can also result into the reduction in the price of a commodity. People consume petroleum and petroleum products on a daily basis. There are those who consider this a basic need. As such, addressing the skyrocketing prices can be considered a major task that requires the effort of the entire world (Beeson & Bisley 2013).
There are risks associated with the reassessment by Europe and the United States. For one, they can impact on the world’s ability to address the issue of depleting oil and oil products. Tight and shale resources have been considered by many scholars to have the potential to become the new sources of oil resources. However, the disadvantages associated with their extraction can lead to countries being sceptical on whether or not to engage in the extraction process. This means that new sources will not be developed despite the fact that the demand for liquid fuels has been increasing in the recent past. As such, oil prices can increase as the resource becomes scarcer on a daily basis (Stec & Baraj 2009). The world can also fail to pursue an opportunity to reduce carbon gas emissions as a result of relying on tight and shale resources. Fundamentally, individuals may be forced to continue consuming oil in large quantities, hence increased environmental pollution (Starr 2014).
The oil and gas industry plays a major role in the economic development of countries across the globe. Many developed nations relied a lot on the scarce resource to fuel their economy. Reducing the demand for the same can result into the significance of the commodity being reduced. For instance, countries can embrace the use of alternative sources of energy. With this being the case, alternative sources of energy industries will replace the oil and gas industry in the economy. Countries that do not have the ability or expertise and machinery to enhance their alternative energy industry may not be able to fuel their economy in the desired manner (Renaud Gicquel 2013). Essentially, they may be forced to continue consuming oil and gas in large quantities to ensure economic development.
The reassessment can also lead to conflict of interest between different governments and individuals. Research has shown that not all governments or corporates share the desire to ensure environmental protection. There are those that see the importance of protecting the environment for a better tomorrow (Leal-Arcas, Filis, & Gosh 2014). On the other hand, there are also governments that are less interested in the effects high consumption of oil and gas products has on the environment. Most of them are more interested to improving their economy at all cost. Such countries may be opposed to calls to use oil and oil products in moderation or in a responsible as this can easily impact on their ability to fuel their economy in the desired manner (Bergsten 2013). Generally, Europe and the United States must be prepared to address such concerns if they are to achieve their goals and objectives.
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