4 Things to Know Before You Invest in Oil and Gas

Oil and Gas is one of the most lucrative industries and investment options in the US right now. If you are a high net worth individual looking to diversify your investment portfolio, investing in oil and gas investment projects is a great move. There are many trusted oil and gas investment firms that can help you when it comes to making the right moves when investing in oil and gas. But before you venture into investing in the industry, there a few things you must know. Continuing on the subject, here is a list of 4 things you must know before you invest in oil and gas. 

1. There is a Major Production Shift at the Global Scale
   
   
   For the past few decades, the Oil Producing and Exporting Countries (OPEC) held an absolute monopoly over the production and export of oil. But as of now, there has been a major shift in the production landscape and the dominance of OPEC members has all but ended. The US is now the largest producer of oil in the world. Currently, 60% of the world’s oil needs are met by non-OPEC members alone.  Technological advancements have helped nations such as US, China, and Canada produce oil at a scale equal to the OPEC members.
   
   
2. Pipelines are a Crucial Factor for Gas Industry 
   
   
   Transporting oil is easier when compared to gas. Oil is transported using pipelines, trucks, rails, tankers, and so on. Natural gas cannot be transported using the same means of transportation. To move natural gas, only pipelines are viable. For a thriving gas industry, a well-connected network of pipelines is crucial. The US has one of the world’s largest network of energy pipelines. Nearly 300,000 miles out of the 2.4 million miles of pipelines laid out in the US is used exclusively for transporting oil from one location to the other, for both household and business purposes. 
   
   
3. Natural Gas Helps in Meeting Renewable Energy Goals
   
   
   We are often left to choose between natural gas and renewable energy. While renewable energy is deemed to be a better alternative for a safer future, it cannot grow without the support of natural gas. In the current scenario, the numbers in terms of energy output from renewable resources are low. Unlike natural gas, there isn’t a steady, on-demand availability of energy from renewable energy sources. Depending solely on renewable energy to meet our energy needs seems like a highly unreliable strategy. Having natural gas to complement renewable energy to create a balance between both energy sources is the best support for the renewable energy industry. 
   
   
4. Oil and Gas - Massive Tax Breaks
   
   
   When you invest in the oil and gas industry, it is to be understood that 70-80% of the capital goes into “intangible drilling costs.” This comprises the costs of buying chemicals, labor, mud, grease, and so on. All of these expenses are fairly basic and universal in the oil and gas industry as oil and gas investment consultants will tell you. According to US tax laws, the money spent on such intangible drilling costs is 100% tax deductible. Tax exemptions and breaks of this sort help in balancing your portfolio. If you’re a high net-worth individual seeking to invest in a venture that is both high on profit potential and tax deductions, the oil and gas industry can be a suitable option for you.  

Wrap Up

Oil and gas will be on a steady rise for a long time. The industry is evolving away from the dominant OPEC nations and turning out to be more favorable to non-OPEC nations such as the US, which is now the world’s largest producer of oil. It is predicted that oil production will only increase in the coming years and there will be tremendous growth in the oil and gas industry. If you’re looking to balance your portfolio and invest in a rapid-growing industry that offers massive tax breaks and a chance to grow your wealth, oil and gas is the ideal option. Get in touch with a reliable oil and gas investment consultant from a trusted oil and gas investment firm to get expert help making your first investment.