Oil and natural gas make up 55% of global energy use, with the top 350 companies holding a combined market cap of $7.2 trillion, comprising 7% of the world’s largest companies. State-owned enterprises control 90% of the world’s crude oil reserves. Just 8 companies hold 50% of the market cap.
Approximately 4934 trillion cubic feet of gas have been produced globally since 1900, with the United States contributing around 30%. Texas and Louisiana account for over half of US natural gas production. The introduction of fracking led to a significant increase in production, making the US a major exporter.
Natural gas, once a byproduct, now comprises a quarter of global energy. Advancements in infrastructure and technology, along with increasing demand, have propelled its rise. However, its contributions to greenhouse gases and geopolitical tensions present challenges for sustainability and climate change goals.
Coal, oil, and natural gas have played major roles in U.S. industrialization and energy. Coal dominated in the 20th century, but oil and natural gas gained prominence after World War II. Fracking revitalized oil and gas production, leading to major shifts in fossil fuel production and investment trends.
In 2022, the US consumed 32 trillion cubic feet of natural gas, the highest level in 30 years due to increased fracking. Efforts towards carbon-neutral energy may reduce demand, as residential use is gradually being replaced by electrical alternatives. However, industrial demand is anticipated to remain strong in the near term.
Since the first successful oil well in 1859, the U.S. has drilled millions of wells for oil and gas. Drilling surged with demand, technology, and geopolitics, with notable periods like the post-WWII boom and the fracking-driven increase in natural gas wells. This progress has brought economic benefits and energy shifts, yet also raised environmental and social concerns.
Of the millions of wells drilled, approximately 3.5 million are now abandoned, with some being properly plugged and others left unplugged. Unplugged wells can emit greenhouse gases, contaminate surrounding environments, and pose safety hazards. Orphaned wells, which lack a responsible operator, become the financial responsibility of the government and taxpayers.
Oil and gas activities contribute to significant air pollution, resulting in adverse health effects and economic costs. Emissions from drilling, production, and transportation release pollutants that are linked to asthma, heart attacks, and premature deaths, especially impacting vulnerable populations. Addressing these emissions is crucial for protecting public health, mitigating economic burdens, and implementing comprehensive policies to reduce air pollution from the oil and gas industry.
Global natural gas consumption has risen 70% from 2000 to 2022, fueled by economic growth and coal-to-gas transition. Hydraulic fracturing in the US has played a major role. Liquefied natural gas (LNG) enables long-distance shipping, but presents climate and energy justice challenges.
Texas has emerged as a prominent oil and gas producer, ranking as the fifth largest oil producer globally if it were its own country. The development of fracking technology and a surge in oil prices led to a significant increase in oil and gas production in Texas from 2000 to 2014. However, the distribution of employment gains during this boom varied across gender, race, and ethnicity. The Texas example underscores the importance of ensuring an equitable distribution of economic benefits in energy systems, especially as governments incentivize low carbon energy initiatives.