Global Crude Oil and Nat Gas industry faces “Epic” changes

BP

Global Oil and gas industry will face “Epic” changes over the coming years as they undertake big changes in Crude Oil use and supply, a report published Monday by the Chatham House think-tank warned.

The independent report “What next for the oil industry?” was produced by veteran oil industry expert John Mitchell, a fellow at Chatham House and a former senior executive with BP (NYSE:BP) for 37 yrs.

He said a Key problem the oil industry faced over the coming years would be in the use of Crude Oil in transport, which accounts for 50% the world’s Oil market.

Competition from other industries is reducing the market, with the automobile industry developing more efficient vehicles and biofuels replacing Crude Oil, and higher oil prices since Y 2005 and policies across the world limiting carbon emissions are driving changes in oil consumption.

“Today’s vehicle, ship and aircraft industries have grown up as siblings of petroleum,” the report read, ” Now they are turning the technology and business models towards avoiding its use.”

The report highlights that China and countries like it, are less dominated by the legacy of fuel infrastructure than mature economies, and will find it easier to develop new technologies to challenge or supplement oil.

China has a very ambitious electric vehicle (EV) development program, said Mr. Mitchell, with a cumulative sales target of 0.5-M by Y 2015 and 5-M by Y 2020.

“China is unique in possessing all the elements for an electricity-based transport supply chain: the road system and urban development designed to accommodate a large segment of short-journey travel, charging infrastructure, vehicles and battery manufacture, lithium, coal and nuclear power,” Mr. Mitchell said in the report.

All are capable of being co-ordinated by government, he wrote.

The large market and manufacturing base will stimulate competition, drive down costs and pick winning technologies.

“All the elements have bases in export industries, so that the shape and timing of the Chinese electric vehicle development will have global reach,” Mr. Mitchell wrote.

 

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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