With news media constantly proclaiming a global petroleum recession, it’s no wonder friends and family frequently ask what effect this is having on our companies and on us personally. Observing the pain our colleagues on the liquid side are enduring, many of us would have to admit experiencing some degree of concern ourselves. With that in mind it’s worthwhile to take a quick look at some key facts and forecasts about our industry.
While the steep plunge in oil has dominated headlines for months, natural gas prices have been depressed for years now and are highly unlikely to see any such precipitous drop. Yet despite the low benchmarks, most companies in our industry are booming. In fact, the International Energy Agency says that we have entered “the Golden Age of Natural Gas”. Because it is a cleaner and more efficient energy source, gas is in high demand for power generation and transportation. And even those regrettably low commodity prices have had a positive effect by restarting a domestic petrochemical industry whose demand for NGL feedstock is projected to increase 125% over the next quarter century.
Other forecasts are just as encouraging. While global demand for oil is slowing, the market for natural gas is expected to rise by 65% over the next 25 years (IEA) while North American production is projected to grow by about 75% to around 140 BCFD as unconventional gas production nearly triples (ExxonMobil Energy Outlook). Meanwhile the estimated total available future supply of natural gas in the United States increased 5.6% to 2853 Tcf in the latest evaluations by the Potential Gas Committee and the U.S. Department of Energy. Many experts contend that this will satisfy America’s needs for at least the balance of this century.
This is not to naively infer that we’re immune to market forces, and it’s only fair to note that not everyone subscribes to these forecasts. Some contrarians contend that shale gas reserves are significantly over-estimated and that demand will far outstrip supply in the near future, creating a worldwide crisis. That of course ignores the thinking of the best minds in the business, but even if true would undoubtedly lead to increased prices and profits which history shows would fund a new era of innovation, exploration and production.
At Mueller we strongly believe that for those who thrive on that spirit of innovation, the future is incredibly exciting. New techniques and technology continue to propel us all forward. Our own revolutionary filterless KLS separation system is a prime example. And we have another game-changing application in the final beta test stage that promises to improve midstream operations even more. The same progress is going on at companies around the world. It’s enough to fill even staid engineers with energy and enthusiasm. And it’s certainly reason enough for bright young professionals to confidently choose a career in natural gas, something that’s critical for the industry’s long term health.