Oil
Few inputs impact the world economy like the price of oil. Oil powers cars, trucks, boats, airplanes, and even power plants that make up the backbone of the global economy. As oil prices rise, costs go up for transportation companies, squeezing their profit margins and forcing them to raise prices, similarly affecting all the other companies that rely on them to transport products and people.
By contrast, most energy companies benefit from higher oil prices, either from higher revenues for oil, or because of increased demand for substitute energy sources such as ethanol and natural gas. The extreme volatility of this important economic input has piqued interest in issues like peak oil, speculation, and the world’s rising energy appetite, and is leading to greater investment in renewable energy.
Natural Gas
Increasing world demand for energy combined with supply constraints for oil and environmental concerns for nuclear and coal create a promising future for the natural gas industry.
According to the U.S. Energy Information Association, worldwide consumption of natural gas is projected to increase by nearly 64 percent between 2004 and 2030. Among the end-use sectors, the industrial sector remains the largest consumer of natural gas worldwide, accounting for 42 percent of the total increase in demand for natural gas between 2004 and 2030. Natural gas also is expected to remain an important energy source in the electric power sector, particularly for new generating capacity.
With U.S. consumption of natural gas projected to increase only slightly, the majority of the growth in gas consumption will happen internationally. However, the U.S. DOE’s projections assume large increases in production of coal and non-hydro renewables which have yet to prove themselves.