Tuesday, June 25, 2013

REPOST: Natural Gas To Play A Bigger Role in Transportation, IEA Predicts

The demand for natural gas in transportation arises, according to the International Energy Agency. Read this Forbes.com article.

Image Source: forbes.com
The International Energy Agency predicts in a new report that natural gas will emerge as a “significant” transportation fuel, if and when infrastructure issues can be ironed out.

The agency’s enthusiasm for natural gas in transportation arises from the usual factors. Gas is cheap compared to oil, it can reduce dependence on imports in a large number of countries, and it emits fewer greenhouse gases than petroleum. China will account for 30 percent of the increase in global gas demand between now and 2018, according to the report.

But the possible shift toward gas will be driven by another factor: softness in demand in electricity markets. With more gas coming out of the ground all of the time, gas suppliers need additional markets. The U.S. has yet to enact significant carbon regulations. With gas prices inching up, many power plants may shift to cheaper coal. (These factors, of course, could easily reverse themselves too: the White House is said to be on the verge of proposing a new emissions strategy and there is growing pressure to revise the royalties for coal mining.)

In Europe, meanwhile, there is “persistent demand weakness.” The IEA, in fact, lowered its projections for the growth of gas in the global energy mix : the agency now expects gas’s market share to grow by 2.4% a year through 2018, lower than the 2.7% annual growth rate in an earlier projection.

Overall, demand for gas will grow from 3,427 billion cubic meters in 2012 per year to 4,000 billion cubic meters meters.

IEA Executive Director Maria van der Hoeven also noted that the demand for gas in transportation will occur “once the infrastructure barriers are tackled.”

That won’t be easy. As we’ve chronicled here, natural gas cars tend to be expensive and so do natural gas filling stations. You get some of the disadvantages of electric cars-range anxiety–without the benefit of a fun, zippy driving experience. Honda’s natural gas Civic for consumers (pictured) has undersold projections.

On the other hand, fleet owners can amortize the cost of filling stations and they typically don’t buy cars for a fun driving experience. EV sales have been climbing, but EVs clearly haven’t colonized the world’s freeways either.

Dr. Ali Ghalambor is considered as one of the most reputable names in the oil and gas industry. This Facebook page contains more information about Dr. Ghalambor, as well as updates about the oil and gas industry.

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