The oil and gas industry is set to undergo significant shifts in 2024, driven by a combination of market dynamics, technological advancements, and evolving energy policies. One of the most notable trends is the increasing focus on natural gas, marking a strategic pivot from traditional oil dominance. This shift is supported by data indicating that gas production volumes are expected to surpass oil for new fields coming online in the coming year.
According to Wood Mackenzie, a leading energy research and consultancy group, approximately 3 million barrels of oil equivalent per day (boe/d) of new supply will emerge from fields starting up in 2024, spread across 50 countries. Notably, over 60% of these new volumes will be gas, with significant contributions expected from Russia, the Middle East, Africa, and the Americas. This transition reflects a broader industry move towards cleaner and more sustainable energy sources in response to global decarbonization efforts.
The American Gas Association reports that average U.S. dry gas production hovered around 103 billion cubic feet per day (Bcf per day) over the first eight days of 2024. This production level is 2 Bcf per day higher than the same period in the previous year, indicating a steady increase in gas output. This growth in gas production is in line with Wood Mackenzie’s predictions for the global market, where gas is set to play an increasingly dominant role.
Moreover, the U.S. Energy Information Administration (EIA) forecasts a modest increase in natural gas supply in 2024, driven by a 1.5 billion cubic feet per day (Bcf/d) increase in production. This growth is slightly offset by a decrease in imports, but overall, the trend points towards a stronger presence of natural gas in the energy mix.
Another key development in the natural gas sector is the anticipated freeze of several natural gas and LNG projects. Wood Mackenzie predicts a downturn in these projects due to various factors, including market conditions and the increasing focus on alternative energy sources like blue hydrogen and carbon capture technologies. This prediction hints at a more complex and evolving landscape for natural gas and LNG projects in the coming year.
The trend towards natural gas is not limited to the U.S. but is part of a broader global shift. For instance, in Canada, oil and gas production is expected to continue its growth trajectory, with annualized production exceeding nine million boe/d for the first time in 2024. This growth will be fueled by both oil and gas, with oil sands operators filling expanded pipeline capacity and new developments in gas plays.
In summary, 2024 is poised to be a pivotal year for the oil and gas industry, with natural gas taking a more prominent role in the energy landscape. This shift reflects the industry’s response to global energy demands, environmental concerns, and the pursuit of more sustainable and cleaner energy sources. As these trends unfold, they will shape the industry’s trajectory and influence global energy policies and market dynamics in the years to come.