Petroleum and natural gas have been the essential source of energy production worldwide, greater than nuclear and alternative sources such as solar, wind and geothermal. With globalization, global energy demand will continue to increase for the foreseeable future. Oil and natural gas will continue to supply a majority of the world’s energy needs, and the production will be from natural sources of petroleum, coal and natural gas. The U.S. has an estimated 260 billion tons of recoverable coal, equivalent to three or four times as much energy in coal as Saudi Arabia has in oil [1]. This increase requires the exploitation of conventional and unconventional reservoirs of oil and gas in an environmentally friendly manner that requires advances in technology and materials in the form of better catalysts to produce clean fuels.
The National Petroleum Council (NPC) in the U.S. [2] indicates that the total global demand for energy will grow by 50 – 60% by 2030 due to the increase in world population, and the average standards of living in the developing countries. Therefore, oil, gas and coal will continue to be the primary energy sources notwithstanding the discovery of bio-fuels such as bio-ethanol for the twenty-first century. Further, the energy industry will require an increase in the supply of hydrocarbon resources to meet these demands. The volumes of oil and natural gas located in unconventional reservoirs are much larger than the conventional reservoirs, which are currently used for what has been produced. Unconventional oil and gas are generally difficult and expensive to extract, and may present a more negative environmental impact than conventional reserves. Examples of unconventional oil sources are extra heavy oil, oil sands, tight sands, oil shale, etc. Extracting oil and gas from unconventional reservoirs requires developing new technology that enables the industry to produce oil and gas in an environmentally acceptable manner. Carbon dioxide (CO2) sequestration and environmentally friendly processes will form a prominent aspect of developing new resources. Throughout these processes, development of materials of construction for the facilities, especially those that can withstand high-temperature, high-pressure and high-stress conditions will be essential to the entire industry [3].
The recent low oil price (U.S. $55/bbl) in 2015, unlike 2008, is triggered by:
- A weak demand growth, particularly in China and Europe.
- Strong non-OPEC supplied growth, particularly from U.S. tight oil.
- OPEC’s behavior as it has maintained production to retain market share.
The global demand for oil in 2000 was 76 million barrels per day (bbls per day), while currently oil production is about 86 million bbls per day (40,000 gallons per second) or 31.4 billion barrels per year. The NPC estimates that the demand for oil will be 103–138 millions bbls per day or 37.6–50.4 billions bbls per year by 2030. Global conventional oil reserves are mainly in the Middle East, and the seven countries with the largest conventional oil reserves account for more than 70% of the world total. Saudi Arabia holds 20% of the conventional reserves [3].
In the early 1990s, Saudi Arabia held 18.9% of the global crude oil/refined product export market. The market share fell to a low 12.4% in 2014, which notably is the same market share when OPEC took a stance and flooded the international oil market with the goal to control its market share as in 1986. The mid-1980s were disappointing and unprofitable for both the upstream and downstream until corrections in supply and demand lifted oil pricing to an agreeable level for producers as Saudi Arabia and OPEC.
Figure 1.1 shows Wood Mackenzie’s global demand outlook, and first-quarter and second-quarter 2015 demand levels projected to be lower than that of the fourth-quarter 2014, reflecting seasonality and re...