Strategy, Technology, and Current Issues
in the Oil Industry
Energy Overview / Current Issues in
Susan Smith Nash, Ph.D.
Global outlook: Sustained,
Worldwide growth in the economy, coupled with population growth
requires conservation, new technologies, and diversified,
The view is complicated, however, by the fact that there are
regional slowdowns as well as debt crises in certain countries.
For example, countries in Europe with high levels of debt
(Ireland, Greece, Portugal, Italy, Spain) along with banking
crises (Cyprus, Iceland), have experienced severe downturns,
resulting in lower levels of GNP and also higher unemployment.
The impact of high-growth transforming economies (India and
China) on global economic outlook and energy has been not quite
as straightforward as one might think. While the Chinese economy
was booming, there were the following initial impacts:
• Increased demand for imported oil, meaning
competition for oil produced in the Middle East, South America,
• Increased investment in infrastructure and
energy sources, which include coal fired plants and also
drilling / production / pipeline construction
• Increased investment in stakes in overseas
oil and gas producers in order to “fast track” acquisition of
• Increased levels of air pollution in Beijing
During 2013, China’s economy experienced a slowing of growth,
along with a surge in bad local debt has caused concern among
planners and economists in China. They have announced that they
will attempt a plan to avoid a possible repeat of the late 90s
crisis in Asia that essentially stopped the Asia Tigers in their
tracks, and the crisis in Japan that resulted in the “lost
The level and extent of the debt crisis is not well known, but
details are emerging, along with projections of possible impact.
In addition, scenarios for dealing with the debt crisis are also
being developed. They are complicated by the fact that consumer
spending (and borrowing) has been a transformative factor in
Chinese culture in the last 10 – 15 years, and a major downturn
or recession could have politically destabilizing effects.
Taking Europe’s Pulse
Europe’s Economic Crisis
Spring Forecast 2013
Risk of Stagnation: India and China Need to Improve their
The Euro Debt Crisis and its Economic Impact on the World
Oil and Gas Financial Journal. 2013. Unconventional
U.S. Energy Information Administration. Short Term Energy
Outlook. January 2013. http://www.eia.gov/forecasts/steo/report/renew_co2.cfm
-- full report: http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf
ExxonMobil. 2013. The Outlook on Energy to 2040. http://www.exxonmobil.com/Corporate/files/news_pub_eo.pdf
The Shale Revolution’s Shifting Geopolitics. NYTimes. Dec.
26, 2012. http://www.nytimes.com/2012/12/26/opinion/global/the-shale-revolutions-shifting-geopolitics.html?_r=0
Report Underlines Bleak Outlook for Wind in 2013. Wind Power
Monthly. 29 August 2012. http://www.windpowermonthly.com/news/1147539/Report-underlines-bleak-outlook-wind-2013/
IBM – Technology http://www-935.ibm.com/services/us/gbs/bus/pdf/g510-3882-meeting-challenges-oil-gas-exploration.pdf
Where are major areas of uncertainty in the energy sector?
How is technology a key driver in energy?
What are some of the predictions for the Chinese economy? What
are some of the potential impacts?
What are key energy factors to keep in mind when making
strategic decisions for the following companies / industries
over the next 5 years?
• transportation industry
• travel and hospitality industry
• internet communications
• national security / military