Oil and natural gas remain the world's leading fuels, accounting for nearly 55% of global energy consumption
Oil and natural gas are formed from decaying plant and animal remains that became buried within layers of the earth and subjected to heat and pressure over millions of years. These two types of fossil fuels have been the world’s primary sources of energy for decades. They have enabled advances in quality of life and in all sectors of the economy, from residential lighting, cooking and heating to transportation and industrial manufacturing. However, the low carbon transition has put the oil and gas industry under pressure as these fuels are two of the main sources of greenhouse gases. The industry is associated with environmental disasters such as oil spills, and the prices of the two fuels – especially oil – are highly volatile with fluctuations directly impacted by political and socioeconomic events. Nevertheless, more than 100 countries currently produce oil and/or natural gas and the two fuels are expected to maintain their importance across the energy sector for many decades to come.
The production of oil and natural gas are often coupled as the two are typically found together in nature. The industry is commonly divided into three main operational sectors: upstream, midstream and downstream. The upstream sector incorporates the exploration and extraction of crude oil and natural gas reserves, while midstream focuses on transporting and storing the extracted products. The oil and natural gas then reach downstream processing facilities where they are refined, distributed and sold to the end customer. The product that reaches the end customer can take a number of forms including natural gas, liquefied petroleum gas (LPG), petrol, diesel fuel, jet fuel, heating oil, kerosene, asphalt and other petrochemicals. Several trends are currently impacting the future outlook of the oil and gas industry. The use of natural gas has increased across all economic sectors over the last few decades since natural gas – often viewed as a bridge fuel towards a low carbon energy system – burns cleaner than oil or coal for electricity generation. The switch to natural gas is becoming more widespread with the proliferation of the technology to liquify it (to LNG) for transport. Developments in shale gas and oil production have also greatly increased supply in the US, which has had implications in global oil, and increasingly LNG markets. Given a growing world population and continued demand for oil and gas products, discoveries of new deposits and advances in production technology will determine availability of supplies. Developments in carbon capture, use and storage (CCUS) will also impact the position of oil and natural gas in the long-term energy mix.
You can further explore the three sectors by clicking the links below:
Learn more about oil and gas extraction by exploring our Energy Insights.
For the latest news and articles on exploration and production read New Energy World.
Explore our dedicated collections on Aviation Fuel, Road Fuels and Shale Gas
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of global power generation was fuelled by gas in 2020 (IEA)
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of methane emissions come from oil production, and the remaining 60% comes from leaks from the natural gas value chain (IEA)
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supply chain jobs in decarbonisation of the UKCS, CCUS and hydrogen will be supported as part of the North Sea Transition Deal, published in 2021 (BEIS)
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of the 40 million tonnes of carbon capture capacity currently in operation around the world is estimated to be used in natural gas processing (IEA)
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Events and training
EI LIVE I Technical webinar on Alternative Powertrains
30/07/2024
EI LIVE I Technical webinar on Alternative PowertrainsThis webinar provides an overview into a research report which aims to support organisations to ...
Discovering Entrepreneurship -Breakfast with the Pros
12/09/2024
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Safety Critical Task Analysis September 2024
16/09/2024 - 20/09/2024
5 X 1.5hr seminars (and Bonus material) on Human Factors Safety Critical Task Analysis (SCTA).
Economics of the Oil and Gas Industry - October 2024
14/10/2024 - 15/10/2024
A 2-day introduction to the economics of the oil and gas industry. This course is suitable for students who are new to the oil and gas industry.
Introduction to LNG - October 2024
21/10/2024 - 22/10/2024
This 2-day training course provides an introduction to the LNG chain. Suitable for students who are new to the LNG sector and/or those with a non-tech...
Technical guidance publications
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IP 601: Petroleum products – Determination of boiling range distribution by gas chromatography method – Part 4: Light fractions of crude oil
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IP 545: Determination of boiling range distribution by gas chromatography method – Part 3: Crude Oil
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IP 599: Determination of Fatty Acid Methyl Esters (FAME) in aviation turbine fuel - Gas Chromatography using heart-cut and refocusing
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