We see major discontinuities and transformational opportunity across the North American Energy & Natural Resources landscape affecting the full value chain—from upstream oil and gas, through midstream transportation and trading, to end-users including utilities, chemicals manufacturers, and refiners. Globalization, regulatory and policy shifts, and technology innovation are among the triggers of these developments.
For example, through disruptive technology innovation, a natural gas and light oil supply shock has been unleashed in the upstream oil and gas industry. New capabilities are required by upstream players to win in this new, unconventional asset class. Prolific hydrocarbon supplies and low prices have stimulated a renaissance among chemicals manufacturers, oil refiners, and other end-users, and a shift to more gas-fired generation in utilities. The midstream industry, set up under an earlier context of industry maturity and tax-efficient cash distribution through MLPs, is now transforming to step up to the infrastructure build-out required.
Utilities are facing increasing customer demands for more control, reliability, and choice in their energy consumption and services. Coupled with advancements in generation, grid, and in-home technologies, fundamentally new, more distributed and flexible power approaches are becoming a reality. In short, it’s an exciting period of challenge and ground for new business and operating models to evolve.