The state of natural gas

As global energy demand rises, natural gas now plays an important strategic role in energy supply. It is more difficult to transport and store gas than oil and consequently it lagged behind that commodity for a considerable period. Over the last couple of decades this has changed and gas markets continue to expand more rapidly than those of other fossil fuels. l gas is the cleanest and most hydrogen-rich of all the hydrocarbon energy sources and it has high energy conversion efficiencies for power generation. Of more significance is that gas resources discovered but as yet unexploited remain plentiful. The sector is poised for considerable growth over the next two decades and some believe that it may even overtake oil as the prime fuel between 2020 and 2030. end towards natural gas becoming the premium fuel of the world economy is not now easily reversible. The key and the challenge for the energy industry is how that transition is to be managed. We examine in this paper sources of natural gas, their limitations and potential. We also identify the technological and commercial challenges to be overcome in taking the world through the transition. There is a fundamental turn towards natural gas which today accounts for about 23% of the world energy demand. Large capital investments in infrastructure to enable increased gas consumption are being made on both demand and supply sides. Several gas-producing countries have embarked upon very ambitious plans for markedly increased gas output. Many new LNG facilities are being built supply chains diversifying and becoming ever more flexible. There is a growing recognition that unconventional sources of gas, such as shale gas, coal bed methane (CBM) and deep tight gas will contribute a significant component of future gas supplies as technologies evolve. gas conversion technologies such as GTL and CNG are attracting more serious attention, but energy efficiency, cost and cost inflation remain barriers for these promising alternatives. Natural gas is also competing strongly with other fossil fuels from an efficiency and emissions perspective as the fuel of choice for power generation. However, gas price volatility and security of supply concerns means that some power generators still favor coal and nuclear components in their power generation portfolio. As the cost of carbon emissions have a bigger impact around the world, gas has the potential to increase its share of the power generation market significantly over the coming decade. A rapid growth opportunity exists for natural gas in its potential contribution to transportation either directly or by electrifying the sector. Real and imagined environmental concerns and restricted access for OECD nations to long-term oil reserves are expected to accelerate the emergence of hydrogen fuel cells. Currently available technologies dictate that the most commercially viable source of hydrogen in large quantities is natural gas, particularly methane through the reforming processes that yield synthesis gas (i.e. carbon monoxide and hydrogen). Current technologies, investments and consumption trends suggest that natural gas will be at the center of a worldwide transformation resulting in a greatly expanded market share of gas in the energy mix for power generation, space heating, petrochemical feedstocks and transportation fuels (e.g. natural gas vehicles are now on the agenda for both energy efficiency and lower emissions reasons).