Increasing investments in energy projects to drive oil & gas infrastructure demand in the U.S.
Development of oil & gas infrastructure to rise across the U.S. with rising concerns for GHG emissions
The U.S. oil & gas infrastructure market is characterized by an increase in research-based studies by various organizations. These studies are being conducted for the assessment of associated capital expenditure and the resulting economic consequences of oil and gas infrastructure development.
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For instance, the Office of Fossil Energy and Carbon Management (FECM), U.S. Department of Energy (DOE), has announced a research project in collaboration with ORNL (Oak Ridge National Laboratory) for the assessment of existing domestic oil and natural gas infrastructure. The project further aims at providing a geographical evaluation of natural gas infrastructure and pipeline materials for blended gas transport for methane, hydrogen, and other gas blends.
Driven by such advancements, the U.S. oil & gas infrastructure market share is slated to record steady growth through 2024.
The growth can be accredited to increase in oil refining which is propelled by the production of oil sands in Western Canada and tight oil development within the U.S. In fact, refinery output in the United States is set to escalate from its level of more than 16 million barrels to between 17 and 19 million barrels a day through the year 2035.
Furthermore, the country is witnessing a dramatic upsurge in gas markets, with considerable growth of LNG (Liquified Natural Gas) exports, increase in petrochemical activity, exports to Mexico, and escalations in the generation of gas-fired power.
An upsurge in the launch of development projects by oil and gas infrastructure companies as well as regulatory bodies is expected to fuel product demand in the coming years. Considering an instance, in August 2021, the BHP board approved a capital expenditure of $544 million for the execution of the Shenzi North oil project in the U.S. Gulf of Mexico. The project will add subsea equipment and two wells for the establishment of a new drill center situated to the north of Shenzi.
Surging GHG concerns to reshape industry outlook
The production of oil and natural gas in the United States has witnessed considerable escalation in the past decade. Given that the country is a leading producer of both oil and natural gas at the global level, this has brought several economic advantages, comprising improvement in the balance of trade, job creation, and greater competitiveness for certain industries. However, greenhouse gas emissions from fossil fuels have been the key propellant of climate change. This has been instrumental in the surging emphasis on transitioning away from fossil fuels.
In the light of such factors, the key industry players in oil & gas infrastructure sector in the U.S. are going nine yards to establish their footprint in the market. They are focusing on various initiatives like increasing R&D activities, acquisitions, mergers and other inorganic strategies.
In a nutshell, an escalation in the formulation of new policies and infrastructure plans will alter U.S oil & gas infrastructure market outlook through the estimated period.
