The U.S. downstream sector is being affected by four major trends in 2022. And only one of them is helping the industry, according to a Reuters Events report published in conjunction with the multinational engineering and consulting leader Wood.

The Key Trends Shaping Downstream Growth Report, released in advance of the Reuters Events Downstream USA 2022 conference and exhibition in Houston on June 8 and 9, highlights four major headwinds for the industry:

-Government regulations and policies are growing in importance, with a raft of global, federal and state measures aimed at delivering a sustainable economy. These come on top of an anticipated long-term decline in margins worth $2 off each barrel from 2031 to 2035.

-Long-term competitiveness is becoming harder to maintain as prices for natural gas decrease the return on investment for operations and capital projects and make the industry less competitive than peers in regions such as Asia Pacific and the Middle East.

-There is a growing need for innovation and talent in transitioning to a low-carbon future as downstream players look beyond short-term issues such as the impact of supply chain bottlenecks on inflation.

On the plus side, digital technology is being used as an enabler for transformational change. The downstream sector is no stranger to using technology as the key to new opportunities, and many players are already using digital tools to maintain and improve competitiveness.

“To remain competitive and attractive to investors, oil and gas companies need to develop sustainability strategies and urgently implement data-driven measures, enabled by innovation, that can make an impact on decarbonization and emissions monitoring,” says German Carmona, President of Applied Intelligence at Wood. “Most importantly, we need to invest in our people, so they have the right skills to deliver and thrive in the low-carbon economy. It’s not only about driving business value, but also about building a better world for the future.

Plus, said Bridget Robinson, global project director for downstream at Reuters Events, “there is a sense that the downstream sector’s digital journey has only just begun. Recent challenges have forced companies to dig deeper into digital innovation, uncovering new benefits and efficiencies.”

The Key Trends Shaping Downstream Growth Report features insights from leaders at BASF, Baystar, Braskem, Chevron, Chevron Phillips, Chemours, Dow, LyondellBassell and Shell and is available for download for free now here – https://bit.ly/3IDz5UH

It is being released in conjunction with the Downstream USA 2022 conference and exhibition, which takes place on June 8 and 9 at the NRG Center, Houston, with more than 5,000 petrochemical, refining, chemical and liquified natural gas industry executives.

Visit events.reutersevents.com/petchem/downstream-usa for details of Downstream USA 2022.