5 Most Common Types of Petrochemical Valves

Valves are used in a variety of industry types in order to control flow and pressure of liquid, gas, oil, vapor, etc. They effectively control the piping system, which is especially critical when working with chemicals and extreme pressure/temperature as you do in the petrochemical industry.

Petroleum is used for a number of applications in everything from creating plastics to rubber, and the petrochemical industry works at refining these products as well as fiber raw and natural gas materials.

While there are many types of valves out there, this article is going to detail five of the most common petrochemical valves. We’ll detail how the valve works and what it does for the petrochemical industry.

1. Plug Valve

This cylindrical or cone-shaped valve works to either allow or stop (aka “plug”) the flow. It switches between the “open” and “plugged” position via rotation.

In the open position, the internal hollow passages are open and allow the liquid and/or chemicals to flow. In the “plugged” position, the valve is rotated to block the hollow internal passages and stop flow. Check out this video to see a visual of how this works.

Since they are high-capacity valves that can handle high temperatures and function best in low-pressure applications, they are often used in petroleum pipelines.

2. Globe Valves

Globe valves work only in one direction, so you must make sure to install them correctly. They can be used to stop and start flow with high precision, which effectively regulates many pipe systems. These type of valves are often used for oil, fuel, and chemical control and transport in the petrochemical industry.

They’re versatile in their design and are easy to maintain, which is great for this industry. O-SEAL® Globe Valves from CPV are examples of this type; they are designed to ensure leak-proof, bubble-tight seating for thousands of cycles.

3. Knife Gate Valves

Petroleum is a viscous and thick substance, which is why knife gate valves are often used. Knife gate valves can easily cut through thicker substances and fluids like petroleum. However, they aren’t good under high pressure, which limits their versatility.

As the name suggests, this valve uses a knife-like blade that physically cuts through thick substances to regulate flow.

4. Slide Gate Valves

The slide gate valve is a linear motion valve that, unlike the knife gate valve, is designed to handle dry powders, granules, pellets, etc. It uses a sliding plate, as opposed to the blade in a knife gate valve, in order to stop the flow of dry materials.

Depending on the application in the petrochemical industry, you could use either a knife gate or a slide gate valve.

5. Vacuum Relief Valves

Vacuum relief valves are also called “breather” valves because they provide pressure and temperature relief to pipes and tanks.

Many areas of the petrochemical industry will result in building high pressure and temperature that needs to be relieved to avoid dangerous explosions, damage, and other consequences.

Before installing, speak with your manufacturer to ensure that it follows the American Petroleum Institute’s standards.

Using the Right Petrochemical Valves Is Important for Safety and Efficiency

These five common petrochemical valves ensure the petrochemical industry runs smoothly in all contexts. They’re also imperative for maintaining safety.

Need more information? Contact us to learn more and ask any questions you still have.

Valves Used in Numerous Industries

The Many Places You’ll Find Valves

Anywhere that a fluid or gas flows through a pipe, you’ll find valves. They regulate flow, stop it, and start it again. Safety and relief valves protect property and lives from over pressurization.

CPV Manufacturing’s high-quality valves are used in some of the toughest industries and harshest environments on Earth. Here are a few of the places you might find them:

Marine & Shipbuilding

Ships are complex. From fuel distribution and storage to cargo loading and unloading, the ballast and bilge systems, refrigeration, and hydraulic systems, there’s no shortage of valves on a ship. You’ll find all types, from metal-seated ball and butterfly valves to relief, check, gate, and globe valves.

Large ships havecomplex systems of pipes and valves to direct the fuel. US Navy aircraft carriers use CPV valves in the lifting of aircraft to the flight deck and in bringing the jets to an abrupt halt when they land.

Marine settings are some of the most hostile…even fresh water is damaging to pipe and valve systems. Plain water causes oxidation to susceptible materials. In seawater, oxidation is compounded not only by the effects of salt, but the sand and mud, plant particles, microorganisms, and small animals. Certain bacteria can produce hydrogen sulfide, ahighly corrosive toxic gas. Valves used in naval settings have to be able to stand up to the inhospitable aquatic environment.

Oil and Gas

Oil and gas production requires heavy-duty valves and pipes. From offshore oilrigs to onshore processing and distribution, a multitude of valves will be found along the way.

Offshore rigs and facilities

Offshore oil rigs have several different functions, each requiring pipe and valve systems of their own. Piping the oil or gas from the land beneath the water requires valves and equipment that can work under as much as 10,000 feet of water.

The Christmas tree valve assemblies that can be seen on top of wellheads are a combination of valves including gate valves and chokes. Their primary function is to control the flow out of the well. Christmas trees are made to handle up to 10,000 psi of pressure and can be found both on land and in offshore wells.

Once the oil has been extracted, typically the water will be removed from the hydrocarbons, and natural gas liquids will be separated from the fluid stream. Sometimes sour gas, raw petroleum containing hydrogen sulfide, is present. Due to its highly corrosive, flammable, and toxic nature, special handling is required including the use of corrosion-resistant valve materials.

The valve that you’ll see the most on an oil rig is the ball valve, although other types of valves are also used.

The American Petroleum Institute (API) as well as the American Society of Mechanical Engineers and NACE (formerly the National Association of Corrosion Engineers) have standards and recommended practices that are to be followed depending on the circumstances. Specifications that may apply on an oil rig are: NACE MR0175, API 594, API 600, API 602, API 608, and API 609, API 6D, API 6A.

Pipelines

The underground pipelines that transport petroleum have valves spaced at intervals, specified by codes and laws, for their entire length. If there were to be a leak, these emergency shutoff valves would be closed, minimizing potential hazards, loss, and environmental damage. Shutoff valves also allow for maintenance to be performed.

Underground pipelines also have stations where they come above ground to allow for cleaning or inspection. The valves at these stations must be able to be fully opened so that the cleaning and inspection equipment can be fit through. Gate or ball valves are typically used at these stations.

Pumping stations containing gate, ball, and check valves are located along the length of the pipeline in order to keep the fluid moving.

The American Petroleum Institute specifications API 6D apply specifically to pipeline valves.

Refinery and petrochemical

If you’d like to see an example of almost every type of valve, a large refinery is the place to be. High temperatures and corrosive fluids are common in refineries. Such valves require extra resistance, which can be accomplished with the use of thicker walls and the right materials using metals ranging from carbon steel to high-nickel alloys.

Specifications API 594, API 600, and API 608 may apply to the valves used in a refinery.

Liquefied Natural Gas

Liquefied natural gas is about 600 times smaller in volume than in its gaseous state. Achieving this liquid state requires that it reach a temperature of -265 degrees F. The pipes and valves used in this process are large, so they must handle high pressure as well as the very low temperatures needed for liquefaction. Popular valve types in LNG production are quarter-turn ball and butterfly valves.

No valve packing materials, however, can withstand such low cryogenic temperatures. To work around this factor, a gas column is used. This column keeps the packing away from the cryogenic conditions so that it doesn’t freeze which would immobilize it.

Gas Separation

Like LNG, gas separation also occurs at very low temperatures. The valves used for gas separation must be tolerant of very low temperatures.

As in LNG production, a gas column is used to separate the packing from the low-temperatures needed for gas separation.

Chemical

The 316/316L grade of austenitic stainless steel is the metal of choice where corrosion is of moderate consideration. Production of highly corrosive chemicals requires the use of even more heavy-duty metals and alloys.

Chemical production is usually done at lower pressures than in the industries discussed above, so pressure is less of a factor than it is with others.

Linear valves are still used for some chemical processes, but the resilient-seated ball valve is popular for many chemical applications due to its zero-leakage shutoff and compact size. Diaphragm, pinch valves, gate and globe valves are used as well.

This is just a sampling of all the places valves are used. Even if you’re not directly involved in one of the industries we serve, there’s a pretty good chance that your daily life has been touched in some way by a CPV valve.

Fugitive Emissions Packing Standards: Understanding API 622

Fugitive Emissions Packing Standards: Understanding API 622 Increasing pressure from the public and lawmakers about global warming and other environmental hazards has resulted in stricter standards for fugitive emissions. Fugitive emissions are gases or vapors, such as volatile organic compounds (VOCs) and greenhouse gases, that leak from pressurized equipment into the atmosphere. Fugitive emissions are costly not only in terms of human and environmental health, but they also pose a threat to profits in many industries.

Fugitive emissions can emanate from a number of sources in machinery, including valves, flanges, seals, sample connections, open-ended lines, pressure relief devices and screwed fittings. However, valves account for the greatest amount of fugitive emissions released from industrial processes, so selecting the right valve is key to ensuring an effective emissions control strategy.

The Evolution of Emissions Testing

The problem of air pollution was first brought to light in 1955 with the passing of the Air Pollution Control Act, which provided funds for government research into air pollution. This was followed by the Clean Air Act of 1963, which was aimed at improving and accelerating programs to prevent and decrease pollution. Amendments to the Clean Air Act in the 1970s meant new approaches to regulation, including national air quality standards as well as measurement and tracking of fugitive emissions.

In the 1980s and 1990s, the Environmental Protection Agency (EPA) began pursuing refineries, chemical plants, and other emissions-producing industries to institute leak detection and repair programs and to ensure that they were not under-reporting emissions. Companies that were found to be in violation were fined and issued consent decrees.

To ensure that they complied with regulations and help determine which valve manufacturers offered the best products to protect against leakage, end users and even some manufacturers developed their own testing methods and standards. These tests varied widely, however, rendering them unreliable.

Today, the EPA, International Organization for Standardization (ISO), and TA-Luft set the standards for emissions around the world. Here we detail API Standard 622, “Type Testing of Process Valve Packing for Fugitive Emissions.”

API Standard 622: Valve Packing

The valve packing standard API 622, which was revised most recently in 2011, is the industry standard for determining whether valve packing is sufficient to prevent or abate emissions leaks. Set by the American Petroleum Institute, the test evaluates three areas of the packing:

Emissions, or leak rate
Resistance to corrosion
Materials

To ensure test uniformity, the standard dictates that every test rig mimics a 4-inch 300-pound gate valve. For accurate results, it’s important to use the most current version of the standard.

Emissions

The emissions portion of API 622 is not a pass/fail test. Rather, it measures valve performance—how many thermal cycles the valve can withstand before emissions exceed the allowable rate of 500 ppm. An emission rate below 500 ppm is considered low, although many manufacturers hold themselves to an internal standard of 100 or 200 ppm during this test.

The emissions testing takes 6 days, during which 1500 cycles are completed. The first 5 days involve thermal actuation cycles. Day 1 includes 150 cycles at ambient temperature, followed by 150 cycles at 500°F. Everything is allowed to cool overnight, and the process is then repeated once daily for 5 more days.

If the packing continues to pass through day 5—proving that it can withstand a significant amount of stress—the process is repeated on day 6. The last thermal cycle on day 6 is followed by 10 more cycles at ambient temperature.

Because methane gas is used, the test is run outdoors. The leak detection method used is EPA method 21, which is employed in a number of valve standards and ensures consistency across tests. Leakage is measured with the valve stem in a stationary position. The test allows for 1 re-torque. That is, if the valve exceeds the allowable leakage of 500 ppm (or the set internal rate), the gland bolts can be re-torqued and the gland load reapplied one time. Typically, this allows the leak rate to come down to a safe emissions level and the test can continue.

Corrosion

The corrosion portion of the test is conducted in a different test rig than the emissions portion. It is a time-based, observational test; it is not pass/fail. Its purpose is to identify how much pitting occurs in the metal (which is based on how much the packing sticks to the stem) as well as the general condition of the packing.

To conduct the test, the packing is soaked and compressed to 30,000 megapascals and left to sit wrapped around a piece of metal. Different metals can be tested to see how the packing will affect different valve stems.

Material

This portion of the standard is about getting to know the material properties of your packing. It tests the packing’s weight and density, how much lubricant it contains, the polytetrafluoroethylene content, and whether any chemicals (e.g., chlorides, fluorides) are leaching out of it.

This portion of the test does include a pass-fail component. If weight loss for graphite foil packing exceeds 15% at a temperature of 538°C, the packing is considered to have failed. For graded packing, 50% weight loss is allowed before it is rated as failing the standard.

The Future of API 622

API 622 has been in effect for 6 years. With technology continuing to improve packing, the achievable leak rate for most of the industry is already 100 ppm. It’s likely, therefore, that this will be the leak rate measured against in the next revision of the standard, with no re-torque allowed.

About CPV Manufacturing

CPV’s high-quality valves and fittings are also used in the oil and gas industry. In this industry, it’s essential that all products perform properly for efficiency and safety and to minimize risks.

CPV’s innovative designs have become fundamental in the daily functions of gas-filling stations and plants, increasing productivity as well as accuracy.

Click here to find out more about CPV’s products.

IQ-CHem Contest to Aid Innovative Petrochemical Start-Ups

The petrochemical industry is constantly growing and discovering new ways to produce and use chemicals to benefit the industry and the world. Now, SIBUR is helping to advance the industry even further with the IQ-CHem contest.

About the IQ-CHem Contest

The IQ-CHem contest will discover and promote innovations in petrochemical production and application. It gives petrochemical start-ups a chance to showcase their projects and how they can improve and develop the petrochemical industry for the future.

IQ-CHem will work to find and promote projects that help create technologies for gas processing and transportation. It’ll also support ideas that can advance the production and use of plastics, elastomers, and custom chemicals. On top of that, IQ-CHem will focus on finding projects for modern equipment and technological solutions to enhance the operative efficiency of chemical and technical processes.

The IQ-CHem contest is open to all petrochemical start-ups. Projects and ideas submitted will be evaluated by a jury of more than 30 international experts from the biggest companies in the petrochemical industry. These experts will determine the best start-up projects and award monetary prizes to three 3rd place winners, two 2nd place winners, and one 1st place winner. The total prize funds for the IQ-CHem contest is $55,000.

Interested petrochemical start-ups can apply to participate until March 1, 2017. Winners will be announced on June 6, 2017, at Startup Village 2017, a start-up conference held in Moscow, Russia.

Additional Petrochemical Opportunities

SIBUR has also partnered with many of the top companies in the industry to help find and promote the best petrochemical start-up projections. A few of these partners include LG Chem, Honeywell UOP, 3M, and Dow.

IQ-CHem Contest As a global stage for communications, the best start-ups will have a chance to receive opportunities to work with these and other global chemical leaders. These opportunities can help participants find investors and ultimately turn the best ideas and projects into a full industrial production.

How IQ-CHem Benefits the Petrochemical Industry

IQ-CHem does more than help petrochemical start-ups find funding for their best ideas. The contest also works to promote the creation of better and more efficient ways to produce and use chemicals in the petrochemical industry.

As explained by Jim Rekoske, Vice President and CTO of Honeywell UOP, this event will shine a light on the importance of how innovative ideas can help develop new technologies and new ways to use chemicals in the future.

“Society has relied on crude oil to provide fuels for more than a century,” he said. “But now countless other chemical products can be made from hydrocarbons, demanding exceptional scientific innovation and technological development.”

Dr. Joost Waeterloos of the scouting and exploration network, Ventures & Business Development for Dow in Europe, Middle East, Africa, and India, also said that IQ-CHem would help start-ups create projects that’ll benefit both the petrochemical industry and the overall quality of life for the rest of the world.

“Participation in IQ-CHem will enable talented participants to unlock their potential and build courageous collaborations, creating unique projects essential to petrochemical industry and, as a result, to humanity as a whole,” he said.

Overall, the IQ-CHem contest is slated to pave the way for start-ups to create projects that’ll ultimately make the petrochemical industry and the world better in the future.

For more industry news and upcoming events, read CPV Manufacturing’s blog.

Petrochemical Industry Structure: What is Upstream, Midstream & Downstream?

The petrochemical industry has become a big topic of discussion. And since the 2016 US presidential election, there’s been news surrounding the upstream, midstream, and downstream markets of the industry.

But what exactly are the upstream, midstream, and downstream markets of the petrochemical industry?

What is Upstream?

Petrochemical Industry Structure The upstream market stage in the petrochemical industry refers to the exploration and production of natural gas and crude oil. It’s the first process in the industry, and it focuses on finding economically viable sources of petroleum products.

Exploratory drilling is most often associated with the upstream process of the petrochemical industry. This is when companies drill into the earth to locate underwater and underground sources of natural gas and crude oil. If the exploratory drilling finds viable fields, the natural gas and oil are extracted and pulled to the surface to be recovered.

Exploratory drilling is performed both onshore and offshore and is usually paired with geological and geophysical surveys to help companies better find viable sources.

What is Midstream?

Petrochemical Industry Structure Once petroleum products are recovered in the upstream sector, they move into the midstream sector of the petrochemical industry. The midstream sector focuses on the transportation and storage of natural gas and crude oils.

Companies will gather recovered petroleum products and store them until they’re ready to be transported. When they can be moved, natural gas and crude oil are normally transported using pipelines, tanker trucks, and rail lines to the final market stage of the petrochemical industry.

On top of that, midstream processes include elements from both upstream and downstream sectors. For example, some companies in the midstream sectors will also produce and purify other sources of petroleum products like natural gas liquids.

What is Downstream?

The final market stage of the petrochemical industry is downstream. Processes for this sector are dedicated to turning natural gas and oil into marketable petroleum products. Overall, the downstream process has multiple parts, including distributing and selling the petroleum products.

However, the most important part of the downstream market stage is refining, processing, and purifying crude oil and natural gas. When crude oil and natural gas arrives at refineries, they’re turned into the petroleum products we use daily. They include gasoline, kerosene, diesel oil, lubricants, waxes, and liquefied petroleum gas.

The downstream stage of the petrochemical industry includes hydrodesulphurization as well. This process removes poisonous hydrogen sulfide from crude oil and raw natural gas. Once removed, the hydrogen sulfide is converted into elemental sulfur or sulfuric acid.

Each stage of the petrochemical industry structure plays an important role in providing the world with the petrochemical products we use every day. And if you’d like to learn more about the petrochemical industry structure, read our post on why petrochemicals are important.

How the Internet of Things (IoT) Is Changing the Oil & Gas Industry

The Internet of Things (IoT) is a new concept in the oil and gas industry. It’s essentially a network of devices and systems connected to the internet. With the IoT, these systems can communicate information to other connected devices.

Overall, the IoT is revolutionizing the oil and gas industry and making things easier, safer, and more cost-effective for all companies. Here’s how.

Remote Monitoring

Internet of Things Monitoring systems in plants used to be a difficult task for many companies in the oil and gas industry, but the IoT is working to change that. With IoT technologies, systems are connected to one network and programmed to relay information back to a device such as a smartphone or tablet that’s connected to the same network.

Workers can access the information gathered to help them better understand how the system is performing, and they can monitor each system and analyze information virtually from any location.

Remote Services

IoT technologies also work to make repairs and services safer and more cost-effective in the oil and gas industry. The information collected from each system allows workers to actively monitor overall system performance so they know when to schedule repairs and maintenance.

Connected systems can be programmed to send alerts to other connected devices if they begin to fail. Alerts also can be sent when systems are about to experience a high-pressure situation, malfunction, or any other dangerous issues.

Some technologies can even be programmed to self-diagnose and self-repair. This eliminates the need to hire additional workers for repairs, which saves companies a great deal of money in labor costs.

With IoT technologies, systems can be repaired and serviced remotely or even autonomously. This is especially beneficial for those working with more complicated and dangerous systems because remote services can help to reduce the risk of workplace injuries.

Data Collecting

Internet of Things We already know that the IoT communicates system information to other connected mobile devices. However, it can also store the important data a company needs in an online storage unit, like a cloud computing system.

A cloud computing system is like an online server. It stores system performance details as well as any other important company data. It can be accessed from virtually any location but is secure enough to ensure that company details and information is protected from hacking.

Asset Tracking

Asset tracking is one of the biggest areas that the IoT is working to change in the oil and gas industry. With the IoT, companies can use sensors to monitor everything from inventory to oil and gas shipments traveling across the world.

These sensors can let you know exactly how many supplies are in your inventory and if any items are missing. They can also be used to track shipments and can relay the location of each shipment back to your office.

Certain sensors allow you to monitor the condition of oil and gas shipments as well. They can track temperature changes, leaks, and other issues that occur during transit. Plus, some systems can even let you address the issues remotely to prevent serious problems from occurring.

The IoT is definitely changing the oil and gas industry but in the best ways possible. To learn more about the effect of technologies in the industry, check out our post on technology improving offshore energy resource development and maintenance.

Low Oil Prices Impact on International Economy & World Business

Oil prices have fallen significantly over the last few years, and there seems to be little to no signs of change as we head into 2017. Low oil prices have become one of the biggest concerns in the oil and gas industry.

But what caused it and how will low oil prices impact the international economy and world business in the future?

Why are Oil Prices So Low?

Low Oil Prices It’s simple economics. Oil prices are low because companies are still producing oil even with decreased global demand. Essentially, oil prices drop because the supply of oil outweighs the overall demand for it.

The United States has become a top oil producer. In fact, oil production in the US has doubled over the last several years. As a result, the country’s production surge has led to a global glut.

While oil production is rising, consumer demand is falling. Weak economies in Europe and developing countries as well as the prominence of energy-efficient vehicles has caused global demand to drop significantly.

Combine these issues and you get low oil prices.

Low Oil Prices and the International Economy

The price of oil has managed to bounce back a few times over the past couple months, but the global glut is keeping the cost for a barrel of oil low. Currently, oil prices range from about $40 to $50 per barrel, and many international countries are suffering because of it.

In Russia, the consistent decrease of oil prices had led to a steady decline in revenue. According to the BBC, Russia loses about $2 billion in revenue for every dollar oil prices fall.

On top of that, low oil prices have resulted in lower earnings for many global companies and producers. Because of this, companies have been forced to decommission more than half of their rigs and reduce their investments in exploration and production, according to The New York Times.

Some companies have even gone bankrupt, which caused more than 250,000 people across the globe to lose their jobs.

The effect that low oil prices has had on the international economy has gotten so severe that the Organization of the Petroleum Exporting Countries (OPEC) has proposed freezing oil production in efforts to raise prices.

Reuters reported that OPEC plans to lower production by 700,000 barrels per day, which would bring their oil production to about 32.5 to 33 million barrels per day. As of now, OPEC is producing about 33.24 million barrels per day.

Plus Side to Low Oil Prices

While low oil prices have negatively affected the international economy, many forget that declining prices can lead to great long-term benefits.

In a recent Bloomberg article, BlackRock Inc. Chief Executive Officer Laurence D. Fink noted that low oil and gas prices will help both consumers and the global economy in the long run. “The reality is 4 billion human beings are going to have cheaper energy, cheaper heating, they’re going to have more disposable income,” he said. “And ultimately that’s going to re-accelerate the global economy. It may take six months; it may take a year, but this is all good.”

For updates and news about the global oil industry, read CPV Manufacturing’s blog.

Countries by Oil Production: Oil Market Trends and Predictions for 2017

The global oil market has had its ups and downs throughout the years, and 2016 has been no different. Even with low oil prices, production rates in various countries seem to be increasing. So which countries are producing the most oil, and what does this mean for the oil market in 2017?

Top Oil Producers by Country

Countries by Oil Production Throughout the years, countries like the United States, China, Russia, and Saudi Arabia have been named the world’s biggest oil-producing countries.

In 2015, the United States was the top oil producer in the world followed by Saudi Arabia, Russia, China, and Canada. Below is how many barrels per day each country produced in 2015, according to the US Energy Information Administration.

United States: 15,044 thousand
Saudi Arabia: 11,949 thousand
Russia: 11,030 thousand
China: 4,722 thousand
Canada: 4,506 thousand

On top of that, all five of these countries were listed in the top 10 oil producers in the first three months of 2016, according to CNN Money.

Oil Market Trend and Predictions for 2017

Countries by Oil Production Currently, the oil industry is booming. With several new plants and more countries contributing to the global oil supply, the world has more than enough to meet consumer demands. But many don’t consider that to be good news.

A monthly report by International Energy Agency (IEA) stated that global oil demand growth is waning, which means an oversupply will be expected in 2017. “Our forecast in this month’s report suggests that this supply-demand dynamic may not change significantly in the coming months. Thus, supply will continue to outpace demand at least through the first half of next year,” the IEA said in a Reuters article.

The IEA’s report also stated that crude oil prices will rise, though not by much. Overall, they expect the price of oil to increase by only about 50 cents per barrel in the United States.

In terms of production, global refineries have no signs of slowing down. In fact, The Wall Street Journal reported that countries like the United States, Norway, and Russia will produce more than 190,000 barrels per day in 2017.

On top of that, they reported that global production will be at an average of 760,000 barrels per day. This about three times higher than predictions recorded just last month.

What Does This Mean for Consumers?

Based on the market trends, consumers are likely see some benefits in 2017. For example, the global oil glut will carry into the new year, and the slight projected increase in oil prices will mean gas prices will continue to be as low as they are now in 2017.

For more industry predictions, check our post on New Threats that the Oil Tanker Business Could Face in 2017.

Oil and Gas Industry Trends of 2016

The oil and gas industry has had its ups and downs throughout the year. The industry trends for 2016 have provided the sector with great benefits as well as a few challenges.

But the year isn’t over yet. Here are the 2016 oil and gas industry trends to look for during the rest of the year and beyond.

Low Oil & Gas Prices but Decreased Demand

oil and gas industry Gas prices have been on the decline and will continue to fall during the remainder of the year and maybe into 2017.

With that said, consumer demand for natural gas is expected to increase through the rest of the year and into next year. The United States and the Middle East are expected to have the highest demands for 2016.

In other areas, however, demand for natural gas and oil is faltering. While prices remain low, changes within the economy in Europe and China are leading to overall decreased demand. Because of this, the price for a barrel of oil is likely to change in the near future.

Increased Production

Concerns about depleting the supply of natural gas and oil have lessened considerably in 2016. Increased fracking and new plants have made it possible to extract oil and natural gas from more places.

This has led to an increase in natural gas and oil supply all over the world. In fact, the US Energy Information Administration predicts that crude oil production in the Gulf of Mexico will increase from 1.5 million barrels per day to 1.9 million barrels per day by 2017. However, production in the United States is anticipated to drop by 1.2 million barrels per day.

Focus on Climate Change

The continuing focus on the environment and climate change has become one of the biggest oil and gas industry trends for 2016. Because of this, we’ve seen many companies adopt environmentally friendly production methods to reduce the world’s carbon footprint.

However, more stringent environmental regulations could pose problems for many plants in the future. These government regulations may force companies to change their ways of operation to decrease harmful emissions. But these restrictions would only pose short-term problems. Thanks to new advanced technologies, companies can implement efficient systems without sacrificing production.

Digital Technologies in the Industry

Perhaps the most interesting trend in oil and gas industry for 2016 is the increased focus on digital technologies. In a recent survey, many believe that digital technologies can add more value to companies.

According to McKinsey & Company, these technologies will provide monetary benefits to oil and gas companies. Their research showed that using digital technologies within the industry could reduce capital expenditures by up to 20%. On top of that, they could reduce operation cost in upstream by up to 5%.

Many companies have already adopted digital technologies such as cloud systems, the Internet of Things, and advanced analytics.

The year isn’t over for the oil and gas industry, but we can make a few predictions about the future. Based on the industry’s 2016 trends, the oil and gas sector will continue to deal with falling prices, increased production, and government regulations. Plus digital technologies will provide immense benefits to the sector.

For more information on industry trends, read our post on Challenges That the US Petrochemical Industry is Facing in 2016.

Natural Gas Pros and Cons: The Future of Natural Gas as an Energy Source

Natural gas has been called both a solution and the cause of the world’s energy and environmental problems. Some consider it to be an effective and reliable source of energy while others see it as an environmental hazard. So which side is right?

The truth is, natural gas has both pros and cons that will affect its future as an energy source. A few of them listed are below.

Drawbacks of Natural Gas

Natural Gas Pros and Cons One of the biggest concerns of using natural gas as an energy source is its sustainability. Natural gas is a non-sustainable and non-renewable form of energy. This means the global supply will run out at some point. Plus, depending on how high the demand is, we could run out of natural gas sooner than anticipated.

On top of that, natural gases are known to emit greenhouse gases. When burned, natural gas releases carbon compounds such as carbon dioxide and carbon monoxide, two compounds that cause global warming and climate change, into the atmosphere. Natural gas also contains a high percentage of methane, another greenhouse gas.

The costs of working with natural gases can also be expensive. Plants and homes need long pipe systems as well as specialized tanks and plumbing systems when working with or transporting natural gas. These systems may lead to excessive spending and decreased revenue for many.

Above all, natural gas can be extremely dangerous. Natural gas is colorless, odorless, and highly flammable, so gas leaks tend to go unnoticed, which leads to overexposure and illness. Gas leaks also cause fires and explosions in both plants and homes using natural gas.

Benefits of Natural Gas

Natural Gas Pros and Cons While the disadvantages of natural gas are substantial, natural gas does offer a number of benefits. For example, while natural gas may emit greenhouse gases, it’s the cleanest burning fossil fuel available.

If fact, natural gas emits up to 50% less carbon dioxide than coal and 20% to 30% less than oil, according to the International Gas Union.

Natural gas is also a flexible source of energy, which means it can be used in many applications. It can power vehicles, produce electricity, heat homes, and much more. Plus natural gas can be cheaper to use compared to other resources.

Most importantly, natural gas provides economic benefits. Increased demands of natural gas have led to the creation of more plants across the country. As a result, the oil and natural gas industry has provided more job opportunities.

Future of Natural Gas as an Energy Source

Based on the pros of cons listed above as well as changing industry trends, the future of natural gas as an energy source is uncertain. However, according to the US Energy Information Administration’s (EIA) Short-Term Energy Outlook, the future of natural gas may be bright at first.

The report predicts that natural gas prices will decline throughout the rest of the year and gradually rise in 2017. The report also states that natural gas production and trade as well as consumption will increase within the next year.

The EIA notes that the natural gas inventories have had lower-than-average storage injections, with just 3,401 billion cubic feet available. But despite this low amount, the EIA believes that natural gas inventory will increase to 4,042 billion cubic feet by October 2016.

So despite all of the pros and cons, natural gas is likely to continue being a top energy source for the United States and the rest of the world.

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