Arielle Campanalie

Associate Editor // acampanalie@gie.net

Oil producers aren’t celebrating a “new year, new me” in 2016 as crude crashed to $30 a barrel in the first month. The Energy Information Administration’s (EIA) Short Term Energy Outlook (STEO) predicts crude oil prices to average $40 per barrel in 2016, arguably a long shot with how the year has started. Natural gas could be the only saving grace for the industry with working inventories 17% higher on Jan. 1 than the same week last year and 15% higher than the previous five-year average. But in terms of manufacturing, production has slowed due to a supply and time disequilibrium. On page 20 Tanya Bodell from Energyzt looks closer at this crash and when the industry will recover.

With the bad news for oil and gas comes good news for renewables. The 2015 Paris Climate Conference was hailed as a huge step for the industry, resulting in targets set for greenhouse gas emissions (see page 26). The STEO forecasts that the decline in power generation from fossil fuels will be offset by an increase from renewable sources. Generation supplied by hydropower is expected to increase 1% by 2017, and 2% by that same year for other renewables. The market preview on page 12 provides more detail on the energy industry into 2016 and beyond.

In 2016 one thing will be consistent across each sector – Big Data. If you aren’t integrating your manufacturing operations already, this is the last call. The Industrial Internet of Things (IIoT) will play a big part in the energy industry in the coming years, and almost everything will be connected – from wind turbines (see page 28) to oil wells.

Without a doubt, 2015 was a rough year for U.S. energy manufacturing, but hope is lurking in nontraditional places. The Department of Energy’s (DOE) Clean Energy Manufacturing Initiative can support the renewable rush, helping the U.S. gain more ground in this industry and become more buoyant when one sector crumbles. And jobs are growing in renewables for manufacturers, engineers, and support services. The Solar Foundation reports that there are nearly 174,000 solar workers in the U.S., more than a 20% rise since 2013, and the DOE expects wind energy will support 600,000 jobs by 2050. Since the implementation of the Business Energy Investment Tax Credit (ITC), which was renewed in December (see page 26), the cost to install solar has dropped by more than 73%, and roughly 20,000MW of solar capacity is forecasted to come online in the next two years, according to the Solar Energy Industries Association.

As we continue into this new year, don’t panic. Instead, take this time to rethink your manufacturing strategy to be more versatile with the growing opportunities in other sectors. And if your company is heavily invested in the oil and gas industry, just think – how many people do you know who rode a bike to work today? — Arielle