Work-from-home orders, travel restrictions, and extremely limited access to critical equipment from outside personnel made in nearly impossible for many in this industry to conduct business in 2020. In addition, extreme weather events wreaked havoc around the globe. Record setting hot and cold temperatures, wildfires, raging floodwaters – each severe weather event last created distinct challenges for energy infrastructures worldwide and presented a glimpse of what’s to come if actions are not taken to mitigate the impact of humanity on a fragile planet.
BP’s 2021 Statistical Review of World Energy reports that global gas production fell by 4.3 quadrillion scf (1.23 x 1011 m3), or 3.3%, in 2020, with the largest drops seen in Russia and the US. Gas consumption decreased worldwide by 2.3% or 2.8 quadrillion scf (8.1 x 1010 m3). Hardest hit were North America and Europe.
The US Energy Information Administration (EIA) reports that demand for energy delivered to the four US end-use sectors (residential, commercial, transportation, and industrial) decreased to 90% of its 2019 level in 2020. Compared with the financial crisis of 2008, the COVID-19-related decline in the total demand for delivered energy is about 70% larger.
While uncertainty will remain a constant for the foreseeable future due evolving COVID variants, signs of market recovery began to emerge in the second quarter of 2021, with most anticipating continued growth in 2022 and beyond.
“Demand for natural gas is on the rise,” said Alan Armstrong, CEO of Williams during the company’s second quarter earnings call. “Looking at Q2 comparisons, we’ve seen demand grow by 9% in Q2 2021 compared to Q2 2019. Compared to Q2 2020, demand has grown 5.6%. during Q2 2021. We see continued strong growth on the demand front. We don’t expect the COVID or a resurgence of COVID really to have any impact on that. We’re continuing to see a steady, healthy growth coming on the natural gas market. As we look into 2022, it’s hard to predict what gas demand will continue to do but right now, certainly, the fundamentals are looking strong, and we are seeing a healthy producer response.”
“As we look to the second half of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas,” said Lorenzo Simonelli, chair and chief executive officer at Baker Hughes during the company’s second quarter earnings call.
“Internationally, we have seen a pick-up in activity across multiple regions over the last few months, including Latin America, Southeast Asia, and the North Sea. Looking at the second half of the year, we expect …”
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