It is not an exaggeration to state that the oil and gas industry has a major impact on how the world operates. Despite all the talks about the imminent decline of the market, trends still suggest that the industry is still relevant today. Current statistics show that oil accounts for around 33 percent of all the world’s energy. With more people living longer, there is a pressing need for societies to have power. This has driven oil consumption to almost mind-boggling levels. Industry experts suggest that energy can be argued as the primary reason for globalization. Without it, current technologies would not exist. Yet this is a far-reaching statement; one that is perhaps too big a concept to grasp. To better explain the practical and perhaps, direct, impacts fossil fuel and oil have had on society, experts have listed a few examples.
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A booming transportation industry: Considered the keystone to any logistical network, transportation plays a vital role in economics. What drives these trucks, cars, and other vehicles is derivates of gasoline and diesel fuel. With more companies operating on a global scale, more transportation vehicles need to be made. Even with other forms of alternative energy cars, gas and oil will still be needed to operate other parts of the transportation sector.
83 percent of the world has just begun to consume oil: Westerners have a hard time understanding this, but the truth of the matter is, much of the world has only now begun using oil. The growing market in oil consumption means dramatic shifts in not only their local economies but how international policies will play as well.
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Lastly, one cannot talk about economics and fuel consumption without referring to the price inelasticity of demand. There is an assumption that completely removing oil production will improve environmental conditions. People often confuse alternative forms of energy like solar and wind (which is used for electricity) with fuel consumption (which is used for transportation and gas). There is still no significant substitute to the oil market, and improving extraction technologies also imply fewer carbon emissions from existing refineries.
As a successful oil and gas industry entrepreneur, Cody Winters is on a mission to educate fellow investors and operators about the many facets of this lucrative and important industry. Learn more when you follow this Twitter account.
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