SAN FRANCISCO – February 6, 2017 – Trellis Energy, the leading provider of innovative technology solutions for the natural gas, liquids, oil and electric industries, revealed today its predictions for the U.S. oil and gas industry in 2017. The company’s predictions take into consideration macro trends and shifts in the energy industry including expectations from the new federal government administration, demographic changes within the industry’s workforce, adoption of new technologies and changing demand patterns.
“The U.S. oil and gas industry is highly dynamic – easily affected by not only regional but also global developments and macro-economic factors. On top of this, the sector is heavily regulated. By keeping our finger on the pulse of the industry, we’re able to help energy asset owners and operators quickly respond to and stay ahead of industry changes while remaining compliant with new and updated laws and regulations,” said Rakesh Agrawal, CEO of Trellis Energy. “With our 2017 predictions, we look to highlight some of the biggest trends that are likely to shape the industry this year.”
Trellis Energy’s 2017 predictions include:
As a result of the new presidential administration, we anticipate that policy positions may affect the natural gas industry in a number of ways, including:
- Increased and ongoing exploration of natural resources in the U.S. – If the current nominee for Secretary of the Interior – Ryan Zinke, who is currently a U.S. Representative from Montana – is confirmed, we can anticipate further exploration. Some currently protected federal lands may be opened up for exploration and development. However, based on his previous policy positions, we believe that it is likely to be under a contract with the federal government, rather than the sale of those lands to companies or private owners.
- Both new and resumed construction on a growing network of energy infrastructure, primarily in the form of expanded pipeline and transport operations – With the U.S. government being the single largest landowner in many of the states that have natural gas deposits, coupled with the likelihood of fewer restrictions on Federal land, we anticipate that interstate and intrastate natural gas pipelines will grow. We also anticipate a massive push to maximize efficiency of existing pipelines through more Internet connected components and technology solutions that increase automation and proactive maintenance.
- Potential deregulation on the operations and speculation of natural resources – If Oklahoma Attorney General Scott Pruitt, who is the new administration’s nominee for the chief of Environmental Protection Agency and a close ally of the fossil fuel industry, is confirmed, we anticipate that he will seek to streamline exploration and production hurdles currently in place.
- Increased potential for wider, more rapid fluctuations in the global commodities markets – Given the preceding, we predict an ongoing, accelerated overall growth and drive for increased automation in the natural gas industry, both in the United States and internationally. This is likely to put greater pressure on the crude oil market, resulting in the potential for broader fluctuations in the commodity markets for crude barrel prices.
Cyber attacks on critical energy infrastructure will significantly increase.
As the oil and gas industry continues to modernize its operations systems, we’re seeing growing adoption of open, web-based information systems as well as increased connectivity to the Industrial Internet of Things (IIoT) for mission-critical processes. As the distinction between information technology (IT) and operations technology (OT) increasingly blurs, we expect to see an increasing number of cyber attacks in the coming year. Given the threat, energy asset owners and operators will need to increase their investments in cyber security solutions that are specialized for the oil and gas sector.
The ever-increasing number of sensors connected to the IIoT along natural gas pipelines will lead to information overload for many pipeline asset owners.
As pipelines continue to be increasingly connected to IIoT sensors, we predict that asset owners will become overwhelmed by the volume of raw data being generated. We will see natural gas asset owners throughout the industry increasingly turn to cloud-based technology platforms and sophisticated software systems that leverage computer learning and automation to manage the volume of data and gain the insights needed to streamline processes, and reduce operational and maintenance costs.
As North American gas markets continue to shift toward a just-in-time supply structure, we predict that the industry will see an increasing number of supply interruptions.
Lead by changing demand patterns, the U.S. natural gas industry is increasingly moving away from storing large quantities of gas for seasonal demand, and toward a more just-in-time supply model. As a result, we predict that there will be interruptions in supply due to shortfalls, late delivery or sudden changes in demand as the industry learns how to manage the just-in-time model.
The retirement boom will continue to intensify and smaller operators will be squeezed the most.
The oil and gas sector is feeling a talent squeeze brought on by a wave of retirements. As this widening skills gap continues to threaten business continuity for companies across the board, we predict there will be a rise in predatory recruitment in the industry. In turn, this will lead to higher salaries and pressure on the bottom line. While everyone is bound to feel the pressure, we believe that smaller operators and asset owners with limited resources are likely to feel the squeeze the most.
For more information on Trellis Energy’s 2017 predictions, please visit https://trellisenergy.com/whitepapers/ to download the full report.
About Trellis Energy
Trellis Energy is a leader in helping energy companies move to the digital world by providing software and services to better manage and operate their energy assets. Trellis Energy works with leading energy companies including BP Pipeline, Chevron Pipeline, DTE Energy, Gaz Metro, NextEra Energy, ONE Gas, Pacific Gas & Electric and Tokyo Gas, among others. The company is headquartered in San Francisco and has offices in Houston, Denver and Washington D.C. Let Trellis Energy’s innovative solutions help run your business. Smarter.
For more information on Trellis Energy, visit https://trellisenergy.com