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Will an “energy revolution” restore U.S. manufacturing?

The paper predicts that non-OPEC supply growth in 2013 will be 1.1 million barrels per day – larger than the growth in global demand – which has happened only four times since 1986.
By Patrick Burnson, Executive Editor
January 21, 2013

As noted in our news section, the IHS special report suggests that new domestic energy sources will have provide logistics managers with new challenges and choices.

Other key points in this special IHS report include:

  • The paper predicts that non-OPEC supply growth in 2013 will be 1.1 million barrels per day – larger than the growth in global demand – which has happened only four times since 1986.  Leading this non-OPEC growth is the surge in unconventional oil in the United States. The report does warn, however, that increases in non-OPEC supply elsewhere in the world could be subject to what has proved to be a recurrent “history of disappointment.”

  • Growth in world demand in 2013 is likely to be about 1 mmillion barrels per day, well below the pre-economic crisis levels. This, according to the report, reflects not only the economic downturn, but also “post-peak demand” in the OECD countries. OECD demand in 2012 was almost 10 percent lower than the 2005 peak.

  • “The North American unconventional oil and gas revolution is having profound effects on the global chemistry industry,” with petrochemical investment in North American “being reignited,” writes IHS Chemical Chief Advisor Gary Adams in the report “Energy derived raw materials represent as much as 75 percent of total petrochemical production costs.”

  • The uneven global economic recovery will lead to varying impacts and challenge for the automobile industry around the world. China will be at the top, with 20.5 million cars sold in 2013, compared to 17 million in 2010. Recovery is clear in the United States, with 15.1 million new car sales 2013, compared to 11.6 million in 2010 – but still well below the 17 million peak registered in 2005.

  • The continuing impact of the recession is evident in Europe, where new car sales will be 18.1 million units, below the 18.4 registered during the downturn in 2010. The same holds true for Japan, with 4.7 million cars sold in 2013, compared to 4.9 in 2010. “The global recession has coincided with a global shift towards emerging markets,” writes IHS Automotive Senior Director Philip Gott in the report. He adds that the oil and gas revolution is only one of many challenges facing the auto industry.  Perhaps the most burning issue is that “The consumer’s love affair with the automobile may be turning into a star-crossed relationship.”

About the Author

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Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


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