market | Update
Figure 1: Trends in energy demand and economic growth
Figure 2: Correlation between economic growth and the demand for energy
economic growth is needed in order to remedy many of the world’s current problems. It should not be over- looked that a large proportion of the world’s population still lives in poverty and under-development, deprived of basic needs such as safe drinking water, decent sanitation, access to electrical power, etc. And, given that the world’s population continues to grow, outputs need to be increased just in order to maintain the existing situation. In summary, this means we are likely to see a more or less continuous increase in world demand for energy. So, will the world need more Oil & Gas? In recent years, sustainability topics have increasingly come to the forefront of public debate. Among them is the issue of energy: there is increased usage of sustainable energy sources such as hydroelectric energy, solar and wind power, etc. This is certainly a positive develop- ment, in so far as it also makes economic sense. But a glance at the data shows that sustainable sources of energy represent a very small proportion of the current energy mix (Figure 3). Furthermore, even in the most optimistic scenarios, renewable energy sources (despite
achieving considerable growth) are expected to remain a minority for the foreseeable future. This leads to the question, will the world need additional pipelines? Pipelines are built primarily to gather, transport and distribute crude oil, natural gas and products resulting from their processing. As mentioned, many such pipelines have been built in the course of recent decades. So why would we need any more? Firstly, it should be noted that the demand for oil and
gas is still growing (Figure 4). That in itself would indicate that additional pipelines are needed. But the growth in Oil & Gas demand is hardly the sole (or even the most important) driver of new pipeline construction.
A dynamic industry
Oil & Gas production is a very dynamic industry. On one hand, the reserves held by each fi eld and basin are fi nite – at some point they inevitably start to run out; on the other hand, new basins and new fi elds are discovered and brought into exploitation. Obviously, pipelines are not mobile: they cannot be simply moved around. New fi elds mean new pipelines, even if that new production replaces older fi elds that have run dry. In fact, it is more than that because the “low hanging fruit” has already been picked. New fi elds tend to be more diffi cult to access: deeper under- ground or under the sea, farther offshore or situated in more inhospitable and/or remote regions. This often translates into longer pipelines and more complex coating systems.
Figure 3: Global primary energy mix in 2012 12 PIPELINE COATING | May 2013
All this is true even of “conventional” Oil & Gas reserves. Crucially, however, entirely new, “unconven- tional” sources are being brought into play (Figure 5). Bituminous sands have been exploited (especially in Canada) for a number of years already. Tight gas and
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