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Animation: Oil Imports to the U.S. Have Shifted Dramatically Over 15 Years

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Animation: Oil Imports to the U.S. Have Shifted Dramatically Over 15 Years

Animation: Oil Imports to the U.S. Have Shifted Dramatically Over 15 Years

While green energy is making inroads particularly at the electrical grid, the majority of energy in the United States is still consumed by the industrial and transportation sectors. Today, it’s still true that about 90% of all energy used for transportation comes from petroleum products such as gasoline, diesel, or jet fuel.

This means that oil is the undeniable 800-pound gorilla in the energy mix for now, and that’s why it still accounts for 35% of all energy consumed in the United States.

Throughout the last 50 years, America’s heavy dependence on oil has always created unique political and economic pressures, especially when that oil couldn’t be produced domestically. As we witnessed in the 1970s, untimely oil price shocks can rattle an entire economy, and control over oil production ultimately translated into leverage for foreign organizations like OPEC, and countries such as Venezuela, Iran, or Saudi Arabia.

Shifting Sands

Oil independence is something that almost all U.S. politicians can get behind. It means more domestic job growth, and diminishing influence for foreign oil producers. Propelled by technologies such as fracking and horizontal drilling, the U.S. has been edging towards this goal. Since 2008, U.S. crude oil production has grown from five million to near nine million barrels per day. Now, the U.S. is again the world’s biggest producer.

However, as today’s animated graphic from HowMuch.net shows us, there is another significant change that has occurred recently, and it has more to do with where the remaining foreign oil comes from. In particular, oil imports are shifting from the sands of Saudi Arabia to the oilsands of Canada.

The below image shows how U.S. oil imports coming from Saudi Arabia and the Middle East have dropped drastically over the last 15 years:

U.S. oil imports from Middle East

Compare that to Canada, which now exports a whopping 1.37 billion barrels of oil to the U.S. each year.

U.S. oil imports from Canada

If this trend continues, it could have big implications on foreign policy.

Can the United States continue to wean off its dependence on the Middle East? If so, Saudi Arabia’s role as a necessary “friend” in the region may dissipate over time, completely changing the composition of Middle Eastern geopolitics.

It also raises interesting questions from environmental and economic perspectives about Canadian oil, which mostly comes from the Athabasca Oilsands.

Bitumen is particularly expensive to produce, and the extra heavy oil already sells at a discount in American markets. With oil now hovering close to $40 per barrel, what does the future of Canadian oil look like ten years down the line? Further, will concerns over emissions and pollution stemming from the oilsands have any effect on production capabilities as time goes on?

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Energy

Connected Workers: How Digital Transformation is Shaping Industry’s Future

This graphic explores the role connected workers play in achieving successful digital transformation and identifying new growth opportnities.

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Connected Workers: Shaping the Future of Industry

Digital transformation has upended businesses on a global scale, and no industry is immune from its powerful effects.

New technologies and enhancing customer experience are key drivers for companies investing in digital transformation, but the most important reason for prioritizing this shift is that it will allow them to leverage entirely new opportunities for growth.

However, with the speed of digital transformation accelerating at a furious pace, companies need to quickly adapt their working environment to keep up. This graphic from mCloud unearths the origins of the connected worker, and explores the potential applications of connected devices across industries.

The Rise of the Connected Worker

The mass adoption of smart devices has sparked a new wave of remote work. This type of working arrangement is estimated to inject $441 billion into the global economy every year, and save 2.5 million metric tonnes of CO2 by 2029—the equivalent of 1,280 flights between New York and London.

However, flexible or remote working looks different depending on the industry. For example, in the context of business services such as engineering or manufacturing, employees who carry out different tasks remotely using digital technologies are known as connected workers.

The term is not a one-size-fits-all, as there are many different types of connected workers with different roles, such as operators, field workers, engineers, and even executives. But regardless of an individual’s title, every connected worker plays a crucial role in achieving digital transformation.

Real Time Data, Real Time Benefits

When workers are connected to assets in real time, they can make better, more informed decisions—ultimately becoming a more efficient workforce overall. As a result, industries could unlock a wealth of benefits, such as:

  • Reducing human error
  • Increasing productivity
  • Reducing dangerous incidents
  • Saving time and money
  • Monitoring assets 24/7

While connected workers can enhance the potential of industries, the tools they use to achieve these benefits are crucial to their success.

Connected Worker Technologies

A connected device has the ability to connect with other devices and systems through the internet. The connected worker device market is set for rapid growth over the next two decades, reaching $4.3 billion by 2039. Industries such as oil and gas, chemical production, and construction lead the way in the adoption of connected worker technologies, which include:

  • Platforms: Hardware or software that uses artificial intelligence and data to allow engineers to create bespoke applications and control manufacturing processes remotely.
  • Interfaces: Technologies such as 3D digital twins enable peer-to-peer information sharing. They also create an immersive reflection of surroundings that would have otherwise been inaccessible by workers, such as wind turbine blades.
  • Smart sensors and IoT devices: Sensors that monitor assets provide a more holistic overview of industrial processes in real time and prevent dangerous incidents.
  • Cloud and edge computing: Using the cloud allows workers to communicate with each other and manage shared data more efficiently.

Over time, connected devices are getting smarter and expanding their capabilities. Moreover, devices such as wearables are becoming more discreet than ever, and can even be embedded into personal protective equipment to gather data while remaining unobtrusive.

Real World Applications

With seemingly endless potential, these devices have the ability to provide game changing solutions to ongoing challenges across dozens of industries.

  • Building Maintenance and Management
    Facility managers can access real time information and connect with maintenance workers on site to resolve issues quickly. Building personnel can also access documentation and remote help through connected technologies.
  • Task Management
    Operators in industrial settings such as mining can control activities in remote locations. They can also enable field personnel to connect with experts in other locations.
  • Communications Platform
    Cloud-based communication platforms can provide healthcare practitioners with a tool to connect with the patient, the patient’s family and emergency care personnel.

By harnessing the power of artificial intelligence, the Internet of Things, and analytics, connected workers can continue to revolutionize businesses and industries across the globe.

Towards a More Connected Future

As companies navigate the challenges of COVID-19, implementing connected worker technologies and creating a data-driven work environment may quickly become an increasingly important priority.

Not only is digital transformation important for leveraging new growth opportunities to scale, it may be crucial for determining the future of certain businesses and industries.

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Energy

Tracking the Growing Wave of Oil & Gas Bankruptcies in 2020

Dropping crude prices and a worsening pandemic have led to a growing wave of energy bankruptcies. Here’s what that fallout looks like.

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The Growing Wave of Oil & Gas Bankruptcies in 2020

2020 hasn’t been kind to the energy sector, and a growing wave of energy bankruptcies has started to build.

After a difficult year marred by rising geopolitical tensions in the Middle East and crude prices in the $50-60 per barrel range, analysts warned that the energy sector needed a strong recovery to offset a rising (and expiring) mountain of debt.

Instead, the oil patch has seen one bombshell after another, and the impacts are adding up.

Fueling the Wave’s Growth

The new year opened with a U.S. attack on a top-ranking Iranian general in Baghdad, followed by an Iranian counterattack on two bases in Iraq that hosted U.S. military personnel.

Then, the energy industry worried that the Organization of the Petroleum Exporting Countries (OPEC) wouldn’t renew its production deal with non-member countries, causing increased production and negative pressure on crude prices.

All the while, the threat of COVID-19 grew and started to spread. In March, the new coronavirus hit markets hardest, right as the OPEC+ deal collapsed. Russia and Saudi Arabia subsequently flooded the markets with cheap oil, starting a price war to drive out competition.

What developed was the perfect storm of nonexistent demand matched up against oversupply. Crude prices plummeted and hit a historic sub-zero low on April 20th, with futures for West Texas Intermediate (WTI) Crude closing at -$37.63.

The Wave’s Initial Damage

Now, following a renewed OPEC+ deal limiting production agreed upon on April 9th and slowly restarting economies driving up crude demand, prices have started to tick up.

Unfortunately, the damage has already been done and will take a long time to recover. By charting the sector’s bankruptcies over the first half of 2020—tracked by law firm Haynes and Boone, LLP for the U.S. and Insolvency Insider for Canada—we can see the wave start to swell:

Company TypeQ1 BankruptciesQ2 BankruptciesTotal (H1 2020)
Oil & Gas Producer71825
Oilfield Services71219
Midstream Services213
Total163147

For oil and gas producers, the second quarter of 2020 saw 18 bankruptcies, the highest quarterly total since 2016.

So far, they’re largely centered in the U.S., which saw a boom of surface-level shale oil production in the 2010’s to take advantage of rising crude prices. As prices have dropped, many heavily leveraged companies have started to run out of options.

Company TypeQ1 Total DebtQ2 Total DebtTotal (H1 2020)
Oil & Gas Producer$1.4 billion$29.2 billion$30.7 billion
Oilfield Services$10.8 billion$13.2 billion$24 billion
Midstream Services$0.2 billion$0.2 billion$0.5 billion
Total$12.5 billion$42.7 billion$55.1 billion

The biggest victim in the first half of 2020 was Chesapeake Energy, a shale giant that declared bankruptcy on June 28 with more than $9 billion in debt.

Canada has also seen an uptick in energy bankruptcies, especially after facing years of stiff competition from U.S. shale producers. However, the number of cases in Canada is far fewer than in the United States.

One reason is that companies staved off bankruptcy or receivership in four of the seven insolvency cases in Canada since January 2020, at least temporarily. Instead, they are seeking protection under the country’s Companies’ Creditors Arrangement Act, giving them a chance to restructure and avoid insolvency.

A Prolonged Fallout

Another reason for the discrepancy in bankruptcy numbers is timing. The energy sector faced its biggest challenges in 2015/2016, causing many companies to take on debt.

Unfortunately, much of that debt is starting to expire, or becoming too difficult to pay off in the current market conditions.

That’s why, despite the wave of bankruptcies caused by COVID-19 gaining steam, the wave will continue well into 2020 and likely beyond.

July has already seen more companies declaring bankruptcy or seeking creditor protection. The question is, how many more are waiting to surface?

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