Wednesday, 6 November 2013
Oil and Gas - the contribution of the end user
The unspoken issue in reviewing the oil and gas industry, is what is the impact of consumer demand on the pipeline. Were consumer requirements for gas and other petroleum products decreasing, the need for increased production would be moot.
If car mileage utilization were dropping, if more public transit trips were being made, if active transportation were becoming the norm, then one would be expect to see oil production decreasing.
And we as the consumer are the driver of the this pipeline.
Canadian net gasoline sales have increased an average of 0.6% annually over the past five years. While diesel sales dropped with the recession in 2009, since then have increased by 7%. Stats Canada detail gasoline and diesel consumption annually at Stats Can gasoline consumption reports . The US has fared slightly better with flattened utilization over the past few years and overall reduction of 6% since 2007. US consumption of gasoline
Most countries will do not have the positive experience of the US. Japan, UK and other European countries have marginal improvements as well. Globally, typical projections of global demand suggest a 2% annual overall demand in petroleum products driven by growth in Asia and other emerging economies. Check out your country or region at international petroleum consumption
As long as demand increases, the need for exploration and tapping existing supplies will continue. Just as importantly, many traditional supply sources such as US based fields, North Sea and even Canadian non-tar sand supplies have decreasing productivity requiring shifting to newer sources such as tar sands.
Despite the marginal improvement in US and other countries, dramatic reductions in demand would be the only scenario where consumer demand would decrease sufficiently to warrant limiting industry growth. Sadly, sustained decreasing trends are not likely given best efforts in European centres have plateaued at marginally lower demand.
In the meantime, keep walking, biking, using public transport, and encourage friends and family to do the same. Aiming words at producers can only be backed by substantive behavioural change at the end of the pipeline.