There is almost no industry left untouched by oil and gas, even as global energy and transportation markets trend toward renewable energy. Oil and gas flow through the veins and arteries of our daily lives, powering the heart of the modern economy.

Though the energy paradigm is shifting, demand for oil and gas isn’t going away anytime soon. How does it shape our world and our economies, and what will the oil and gas sector need to do to meet future challenges?

Current Uses of Oil and Gas

Oil and gas are present in nearly every aspect of our daily lives. This is by no means an exhaustive list, but below are just a few ways global economies use oil and gas:

• • Energy

    Globally, we depend on oil and gas for electricity and heating. In 2022, about 4.24 trillion kilowatt hours of electricity were generated at utility-scale electricity generation facilities in the United States; about 60% of this electricity generation was from fossil fuels— coal, natural gas, petroleum, and other gases.
    
    Though the decarbonization of the US energy grid is being accelerated in response to the Biden administration’s clean energy plan , many technical, economic, and public policy hurdles continue to complicate the transition to emissions-free electricity. In the interim, oil and gas will continue to play a major role in the US energy sector.
     

  •  Transportation

    Gas, diesel, and other petroleum-based fuels power the cars, trucks, ships, and planes that are crucial to our supply chains and transportation systems. Gasoline, in particular, is a popular fuel for cars and light-duty vehicles, while diesel fuel is typically used for more heavy-duty vehicles such as trucks and buses.
    
    Oil is also used to lubricate moving parts in engines and other mechanical systems, while natural gas is sometimes used as a fuel for buses and other types of vehicles. Natural gas also powers certain types of transportation such as ocean going vessels and fleet vehicles.
     

  • Manufacturing

    The petrochemical industry produces a variety of chemicals and plastics derived from crude oil and natural gas, which are then used to make a wide range of consumer goods. Oil and gas are critical to the production of ethylene and propylene, which are important building blocks for the production of plastics, synthetic fibers, and other materials. Oil and gas are also used to make chemicals such as fertilizers, detergents, and pharmaceuticals. Plastics are present in almost every product we use, from our clothes to electronics — even toothpaste .
     

  •  Heating and cooking

    Oil and gas are used for heating and cooking in residential, commercial, and industrial settings. They are used in the form of heating oil, natural gas, and propane for furnaces, boilers, water heaters, and stoves.
     

  •  Industrial processes

    Industry relies on oil and gas for a variety of processes. Oil is used to lubricate machinery and vehicles, and both oil and gas are used to produce heat and steam for industrial processes. Boilers and furnaces in manufacturing plants may burn oil or gas to produce heat for drying, baking, or melting processes, for example. In addition, steam can be produced by burning natural gas to power turbines that drive electric generators.

Oil and Gas Fuel Global Economies

Oil and gas play a significant role in energizing global economies. The demand for these resources is steadily growing, particularly in developing countries experiencing population booms. However, countries that depend heavily on oil and gas exports for revenue can be adversely affected by fluctuating oil prices, leading to economic instability. The oil and gas industry's reliability is also crucial for maintaining economic growth, as any disruption in supply can have far-reaching consequences. Because of these factors, the oil and gas industry also plays a critical role in shaping geopolitical dynamics, as oil- and gas-producing countries often hold significant political power.

Where Are Oil and Gas Heading?

As stated, economies worldwide depend on oil and gas, and global oil demand is set to rise by 1.9 mb/d in 2023, according to the IEA Oil Market Report. The time is ripe for the oil and gas sector to embrace innovation to increase production, optimize their operations, and meet that demand head-on. But the pace of innovation in the oil and gas sector is relatively slow compared to other sectors, and in an age characterized by mantras like “move fast and break things”, oil and gas companies will have to innovate at a quicker pace to stay ahead of the curve.

For most oil and gas companies, that means embracing the emerging technologies that contribute to safer, more efficient, more productive, and more profitable operations. Let’s take a look at some of these emerging technologies and how they will impact the future of the industry.

Artificial Intelligence (AI) and Automation

Artificial intelligence and automation are poised to transform the oil and gas industry by providing plant operations with access to advanced analytics in near-real time. AI and automation also enable decisions, adjustments and actions to occur at unprecedented speeds, if not immediately.AI-powered solutions can analyze data from multiple sources, such as sensors and machines, to identify patterns and predict potential problems. Automated processes help streamline operations, reducing costs and improving efficiency. As the industry continues to adopt these technologies, we can expect to see significant improvements in safety, productivity, and profitability.

Digital Twins

A digital twin is a digital representation of a physical asset or system, and it can be used to simulate different scenarios and optimize performance. In the oil and gas industry, digital twins can help operators monitor operations, reduce downtime, and make more informed decisions. With the help of sensors and other data sources, digital twins can provide real-time insights into the condition of equipment and infrastructure, enabling proactive maintenance and reducing the risk of unplanned outages.

Predictive Maintenance and IIoT Sensors

By using IIoT sensors to collect and analyze data from machines and equipment, plant operators can monitor the condition of assets in real time, predict potential problems, and take proactive steps to avoid unscheduled downtime. This approach can help reduce maintenance costs, improve asset reliability, and optimize performance.

Remote Monitoring Technologies

Remote monitoring technologies enable operators to monitor equipment and infrastructure from a central location, reducing the need for on-site inspections and increasing operational efficiency. With the help of sensors, cameras, and other monitoring tools , operators can keep tabs on equipment performance, identify potential issues, and make informed decisions in real time.

Emissions Reduction Technologies

Technologies like methane mitigation and advanced water treatment and recycling systems will ultimately contribute to more sustainable operations, which is critical for the long-term viability of the oil and gas industry.

Conclusion

Oil and gas will remain critical to the energy mix for some time, even as global energy priorities shift. And though demand is projected to steadily climb, oil and gas industry players must find ways to innovate to keep their foothold in a competitive landscape. The future of energy is bright, and oil and gas must embrace innovation in order to take part in that future.