“So we beat on, boats against the current, borne back ceaselessly into the past.” The concluding words of F. Scott Fitzgerald’s novel The Great Gatsby seem apt at this moment. As I write, people in England are once again being advised to work from home, in response to the emergence of a new COVID-19 variant. The travel bans, lockdowns and oil price slump – the latter timing unfortunately with the Thanksgiving holiday season in the US – triggered by Omicron’s spread have left many casting their mind back to the onset of the pandemic, rather than forwards as might be expected at this time of year.
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What (limited) evidence about Omicron’s transmissibility there is makes it difficult to believe 2022 will bring a return to normality. For now, at least, oil prices have stabilised. In its latest short-term outlook, the US Energy Information Administration (EIA) has predicted an average price of US$71/bbl for Brent crude in 2Q22, which represents a decline from its current price but still a far cry from the nadir of April 2020. No prizes for guessing that the report comes with a sizeable dose of COVID-related caveats though.1
With the COP26 climate change summit that took place in Glasgow having concluded a few weeks ago, now seems like a good moment to assess its impact. Oil and gas escaped the severe scrutiny given to coal, although an agreement on the “phase-out of inefficient fuel subsidies” indicates the direction of travel for those countries, now in the majority, that have committed to net zero.
The vagueness of this phrase (as Wood Mackenzie put it, what exactly counts as a subsidy is undefined) should not be used as an excuse for oil and gas producers to prevaricate on decarbonisation.2
True, significant investment is needed in E&P operations following the CAPEX cuts of the past 18 months, but it is also needed in the clean technologies that the industry has the expertise and resources to develop and deliver at the scale required. A 2022 marked by inertia would risk alienating investors increasingly keen to see emissions reductions that help restrict global warming to 1.5°C by 2050 and represent a huge missed opportunity to adapt.
Away from the hurly-burly of markets and international diplomacy, oilfield service companies continue to innovate and evolve their offerings, as evidenced by the articles within this issue.
Our cover story from Varel Energy Solutions takes readers through the methodology behind the company’s drill bit hydration approach, and how this has been successfully applied in runs in the US and Oman. Elsewhere, readers can enjoy features covering pipeline integrity, autonomous oilfields and health and safety.
I’ll finish by thanking all of our contributors, advertisers and readers this year, and on behalf of the Oilfield Technology team wish you a happy and healthy new year.
- US Energy Information Administration, ‘December Short-Term Energy Outlook’ (7 December 2021), https://www.eia.gov/outlooks/steo/report/
- Wood Mackenzie, ‘What COP26 means for energy and natural resources’ (1 December 2021), https://www.woodmac.com/news/opinion/what-cop26-means-for-energy-and-natural-resources/