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In spite of the increasing interest in renewable energy sources such as solar and wind, and the rise of sleek, eco-friendly electric vehicles, countries around the globe continue to rely on oil and gas. According to Steve Ziemke, a senior vice president at Gulf Coast Western, that demand will only continue to increase.
In fact, Ziemke believes that investing in petrochemicals is essential for America’s continued dominance as a global superpower. “Global and domestic demands are increasing as various industries increase their productivity to meet customer demands,” he explains.
Ziemke believes that oil and gas joint partnerships offer both long-term potential gains for investors as well as consistent support for the United States’ domestic oil and gas production. He explains why oil and gas are so critical to the American way of life and how continued oil and gas exploration will fuel the global economy.
Oil Demand Is on the Increase — and So Are Prices
Steve Ziemke believes the transition to electric vehicles will likely not have an impact on oil prices for 10-15 years, as the technology and demand are not there yet. Even with investments in alternative energy sources, oil and gas demand has never been higher. According to the International Energy Agency’s January 2023 Oil Market Report, global oil demand will increase to a record 101.7 million barrels of oil a day this year.
Not only is this demand increasing, but global oil prices are also on the upswing. According to Deloitte’s 2023 Oil and Gas Industry Outlook, 93% of oil and gas executives are optimistic about the industry in the coming year. Of those executives, 27% say high, stable gas prices are the key to sustaining the industry’s momentum through 2023. “In Gulf Coast Western’s outlook, I see strong oil prices helping in our clients’ returns, both short term and long term,” Ziemke adds.
Oil and Gas Support American Jobs and the Economy
Steve Ziemke first worked in the casualty insurance industry. He admits that jumping into the oil and gas industry came with a learning curve, but he was amazed at the inner workings of the sector — namely, the number of people required to support American oil and gas exploration.
“What surprised me most over the years, is just to learn how vast the oil and gas industry is when it comes to people. Starting from acquiring leases from someone’s land to developing the wells, through drilling and fracking, to production, refining, and getting the products to market,” Ziemke says. “All the people that are involved in the industry is just crazy.”
Oil and gas are difficult to manage, and the complexities require an extensive network of expert workers to meet the country’s increasing demand for oil. It’s no wonder why the oil and gas industry is a major employer in the United States, supporting millions of jobs. This includes oil field workers, engineers, geologists, and truck drivers. The industry’s growth also spurs economic activity in other sectors, such as manufacturing and construction.
The oil and gas industry also contributes significantly to government revenue, which boosts the development of healthy communities across the U.S. Oil and gas companies pay substantial taxes, including corporate income taxes, royalties, and lease payments to access federal lands for exploration and production. The industry also generates significant state and local taxes, reinvesting funds back into local communities to support infrastructure, education, and public safety.
Steve Ziemke on Oil’s Technological Advancements
As an experienced professional with a Master of Business Administration, Ziemke is no stranger to integrating technology with business. Even so, he believes that oil and gas is a critical industry because it fosters innovation. “We’ve seen our horizontal well technology improve year to year. That technology improves our production efficiencies,” he explains.
The oil and gas industry has long been a catalyst for technological innovation and advancements. Companies invest heavily in research and development to improve exploration and production techniques, enhance safety measures, and increase operational efficiency. These technological advancements not only benefit the industry itself but also have spillover effects on other sectors of the economy, such as robotics, automation, and even data analytics. This is yet another way oil and gas back American innovation, which is critical to the country’s independence.
American Oil and Gas Support Everyday Life
Not only are oil and gas essential for running the country, but they’re also the foundation for everyday life. “Over 50% of the oil and gas that’s used is to make petroleum-based products. So whether it’s a plastic dashboard for electric cars or some other petroleum product you’ve got to have oil and gas to make it happen,” Ziemke explains.
With the U.S. population set to grow over the coming years, Ziemke believes that oil and gas exploration is necessary to support future generations. “There is such a demand and it’s increasing as we come out of where we’ve been in the economy. As the population grows, we need oil and gas. We need that to be stable as a country,” he says.
A reliable, affordable supply of oil and gas is essential to maintain the U.S. economy, ensuring all of our industries continue running smoothly. For Ziemke, oil and gas are critical to the self-sufficiency and independence of the United States. “There are vast oil and gas reserves available to us and I think that will help continue to meet needs and to keep us independent,” he says.
Fueling America’s Economy: The Enduring Importance of Oil and Gas
The importance of oil and gas can’t be overstated. Despite interest in renewable energy sources, demand for oil and gas continues to increase. According to industry experts like Steve Ziemke, oil and gas will play a critical role in American jobs, technological advancements, and the economy long term.
With a growing population and increasing energy demands, continued oil and gas exploration is crucial to ensuring the stability and self-sufficiency of the United States. “I think the importance of energy in this country is just the impact of how the demand is growing,” Ziemke says.
