Note for 2020: This post was written in 2016 when S-energy Consultants focused on the energy industry only. We provided workforce services in addition to HSE and security.
It was written just after a historic industry crash. Now, the company is available for contracts in multiple industries across the ASIA PAC region, but our industry-specific blog posts that are left published as long as we see present value in them.
The future of energy for our civilization is an uncertain one. After 150 years of extracting the ‘lowest hanging fruit’ in oil supplies, the industry has changed. Exploration and extraction costs have skyrocketed in recent years.
In the last 18 months, (and during one of the biggest global crashes in history), producers have been ramping up output. Why? To keep revenue up. This dynamic has never occurred before, a race to the bottom on prices, to stay afloat.
Not only are the ‘usual suspects’ doing this, but it seems as if every country and every producer in the world is doing it too. Capital expenditure is getting shelved due to the pressure of covering interest and debt repayments.
Alternative energy is still far too expensive without government subsidies, and oil is crucial for 95% of global transportation. That is in addition to all of the industrial, and consumer applications of oil byproducts.
We are in a catch-22 between the rising prices that producers need for cost-covering and future exploration. That will cause economic downturns and stifle industry overall.
Nuclear is not cost-effective (when decomissioning is considered), nor is wind or solar, but much of the worlds cheap oil has gotten extracted already.
The US tight and shale oil industry made a bet on future prices, as all investors do. Even $60 is not enough, $70-$85 per barrel is needed for any investor-friendly return. So where will new investment come from when investors are still smarting from the current crash?
We all know these things; we are seeing updates referring to these issues daily in the news reports.
So, what can we do about it?
- Buy up and stockpile oil to try to push demand.
- Help explorers refinance at lower rates.
- Change the thermodynamics profiles of different energy sources.
If you are reading this, you are probably involved in human resources, or you are the human resources…
You can do what we are doing, what all successful people have always done.
You can make sure that whatever happens, whatever the future holds, you will be working as efficiently and as intelligently as possible. That involves efficiency maximization at every stage of the production process if you are a company decision-maker.
Or if you are a highly skilled individual, you will be making sure that your resume shines out from among your peers, that you keep certifications up to date. You will strive for more achievements and better results on every project that you are involved in. You will be among the top tier of go-to professionals that any company will be proud to have.
You will do your best to ensure that every choice that you make is smart and that your commitment and professionalism is unquestionable.
Then you are likely to be just fine, and we will be excited to work with you as we all push forward together in these challenging times.
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