At a recent petrochemical conference in Pasadena, Exxon Mobil (NYSE:XOM) predicted that by 2040 natural gas will be used to generate 25 percent of the world’s electricity, and overtake coal to become the second most popular fuel source after oil. Lynne Lachenmyer, a senior vice president at Exxon Mobil, claimed that natural gas “is penetrating into the power sector, which has been predominantly coal in the past. We see it making tremendous inroads there.”
Exxon has calculated that global demand for natural gas will increase 65 percent over the next 30 years, and eventually exceed coal as a source of energy.
Lachenmyer said “we see a lot of people looking at natural gas as a form of transportation fuel, so you’re beginning to see compressed natural gas or liquefied natural gas applications for fleets within large communities. Its growth rate is higher than the balance of the energy mix, so it’s basically increasing its market share on an annual basis.”
Exxon also predicts that demand for wind power will grow by 7 percent year-on-year, and in 30 years time solar power demand will be have grown by 20 times, although wind will only account for 7 percent of total global energy production, and solar just 2 percent. Meanwhile, oil and natural gas combined will contribute 60 percent of the world’s energy supply, up from 55 percent today.
Natural gas is becoming such a popular fuel source due to the success of hydraulic fracturing, and the subsequent shale boom experienced in the U.S., which has produced an abundant supply of gas.
So far, in the last few years since the start of the U.S. shale boom, more than 120 petrochemical construction projects have been announced in the Gulf Coast region, bringing an expected $80 billion in investments. And once these projects are completed, US exports are expected to boom, and flood the international market with cheap shale gas.
Originally written for OilPrice.com, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.