The global energy investment sector is worth trillions of dollars. Investing in this dynamic and fast-paced sector requires staying up to date with the latest happenings. To be able to invest in midstream oil and gas companies that are involved in the processing, transporting and marketing of natural gas and oil, it is important to understand the key trends dominating the energy market. Investing in energy can be rewarding and profitable if backed by thorough data analysis and knowledge of the market. Here, we break down seven key trends in the global energy sector.
1. The global energy investment sector is now stable
From 2015 to 2017, there was a decline in the global energy investment sector as the amount invested went down. In 2018, this trend seemed to stabilize. There were increased spending and investment in the oil and gas sector as of 2018. In 2019, this sector is now completely stable.
2. There is not enough investment in renewable energy
Most of the increased spending following the bounce-back has gone into oil and gas, and other fossil backed energy sectors. The renewable energy sector has remained stagnant, and experts predict that there needs to be more investment in this sector if the word is to move toward clean energy.
3. There has been more investment in upstream energy sectors
The year 2018 saw more investment in the upstream energy sector, in particular in the electricity production sector and shale gas production. There has also been more focus on electricity generation, such as the establishment of more power lines in the U.S. and Canada.
4. Much more investment is required
To meet global energy demands in the future, much more investment is required in the energy sector than is currently being invested. A stable energy sector is not enough. There needs to be growth in the energy sector, both in the downstream and upstream.
5. There should be an increased focus on energy efficiency
To meet the future’s energy growth requirements while sticking to the goals of the Paris Climate Agreement, there needs to be more investment in clean energy. This is also necessary to meet the UN’s Sustainable Development Goals. More innovation needs to take place in terms of energy efficiency.
6. The future is facing more uncertainties and risks
The energy investment landscape of the future is quite uncertain, due to changing technologies, markets, and policies. New players are entering the field, and geopolitical power struggles have the capacity of throwing downstream markets in turmoil. Some parts of the world are primed for investments in the energy sector, while others such as the poorer parts are beset with significant risks.
7. Coal is still a big player
While investments in oil and gas are booming, investments in coal power plants have gone down significantly. This does not mean that they are becoming obsolete as developing countries are investing in new coal power plants. These will remain operational for a long time, and they will be important in meeting the growing energy demand of the future.
The energy investment landscape today is quite stable and primed for investment due to expected demands in the future from rising urbanization and population growths. Developing countries are becoming key players in this market. Existing energy networks are looking to expand in developed countries.