Many factors directly impact energy production.
Four of the most significant influencers are the global economy, politics, consumption, and energy availability. The question is… ‘Which of these factors influence energy outcome expectations the most?’
In this article, you will gain insights into each of these influential factors, as well as have an opportunity to share your thoughts in a global poll.
1. Global Economy
The Global Economy contributes to energy outcome expectations based on each countries’ use of fossil fuels. Each country uses fuel to provide electricity and gas to heat, cool, propel vehicles, and aircraft. Nations also utilize it for marine vessels, trains, mass transit, and other forms of transportation. Based on studies and research from expert economists, many of their findings suggest that the global economy has the greatest influence on energy production. Furthermore, most producers and consumers would think rightly so, as the climate of the economy worldwide tends to change and impact currency values.
We find, therefore, a direct correlation between the global economy and energy production. And as a result, when a country’s economy grows, so does the demand for energy; but, as it declines, energy demand also declines. We’ve witnessed this time and time again with energy and oil prices and their impact on national economies. One of the most current examples of this direct relationship is the negative effects of US tariff increases.
Figure 1: WEO Infographic
International Monetary Fund – World Economic Outlook Update, Jan. 2018: Brighter Prospects, Optimistic Markets, Challenges…
- Last year, according to an online UN News article, the global economy grew steadily at just a little over 3%. And economists seem to expect similar growth levels in 2019. The UN’s chief economist, however, warns that these figures may mask uneven growth as it often fails to reach where it is most needed.
- Elliott Harris, the UN’s Chief Economist also states, “We still have relatively strong growth, but we do see rising risks on the horizon and an increasing likelihood that some of these risks might actually materialize…”. These comments coincide with the release of The World Economic Situation E-book.
- Overall, the e-book highlights the idea that strengthening global cooperation is a key factor in advancing sustainable energy solutions. This notion is due to mounting pressures in the areas of international trade, efforts in tackling climate change, and international development finances.
Pro Insight: Despite small but steady increases in the global economy, and the various reasons for the slowdowns in global trading, they both still have an impact on global trade and employment.
2. Political Influence
Should politics even be a contributor? It’s been reported that politics have a cyclical influence on energy outcome expectations as free world nations change administration.
Furthermore, research from the past few decades still shows a strong relationship between politics and energy production. In fact, it goes hand-in-hand with the Global Economy. Many government decisions and policies that are passed down from various countries eventually affect the economy AND the energy industry.
For example, a recent online report from The Balance addressed Four Reasons Why Global Trade Had Slowed; and one of those reasons pertained to political influences. These influences not only came from the United States, but also through other protectionist measures from China, Russia, and other nations.
Pro Insight: The “influence of political change”, according to Open Access Government, will always extend far beyond national governments; it will extend throughout the world. Therefore energy, and most other natural resources and global industries, will also be innately tied into political events.
3. Energy Consumption
Energy consumption directly impacts energy outcome expectations because energy use is tied to many levels of life and the pursuit of happiness.
As global consumption increases, so does the need for continued exploration and production. Discover the Top 5 Oil-Producing Wells around the world. Consequently, energy production is a key factor for sustainability on every continent.
Figure 2: European Environment Agency, Infographic
Correlation of energy consumption and GDP per person
This graph from the European Environment Agency shows “per capita energy consumption (kg oil equivalent) vs. per capita GDP, PPP (current international $”). Though the Americas have a significantly smaller population size compared to Asia, the US and Canada may still consume the most resources.
Again, as world demands for oil and natural gas continue to surge and sustain, energy exploration and production activities do the same. Similarly, the demand for services and supplies directly and remotely related to the oil and gas industries also fluctuates with demand. These supplies include essential pipe and thread protection products that help maintain oilfield equipment and other oil country tubular goods (OCTG).
Pro Insight: Rigs Around The World provides resourceful information and the most recent available count of industry drilling rigs currently active in the global development and exploration of oil and natural gas.
4. Production & Energy Availability
The availability of energy has become an ever-increasing stimulus to outcome expectations. This is because hydraulic fracturing technology, for instance, along with the support of some political groups, expands production.
With the introduction of fracking, according to the IPAA (Independent Petroleum Association of America), new and significant supplies of oil and gas are available. At the same time, the new technology that enables the global distribution of gas via liquefaction (LNG) is now a reality. The capture, transport to an LNG plant, liquefaction, packaging, shipping via rail, truck, and marine are now a full reality.
This is why availability is another significant contributor to sustainable outcomes. In fact, studies also show availability having an influence on energy production.
Be a Part of The Energy Poll
Which of the 4 factors influence the energy outcome expectations more?