AAPG ANNUAL CONFERENCE AND EXHIBITION
Making the Next Giant Leap in Geosciences
April 10-13, 2011, Houston, Texas, USA
The Future of Natural Gas
(1) Bureau of Economic Geology, University of Texas at Austin, Austin, TX.
The history of global energy use through the 160 years of the western industrial revolution shows a progression of fuel substitution, with one resource being partly or largely displaced by a more efficient, versatile and generally cheaper source. If trends in carbon reduction and hydrogen increase continue, methane should constitute the dominant fuel in the global energy mix, representing a long-term bridge to a non-fossil, probably hydrogen economy. Is this likely? Probably, but not without the substantial uncertainties attendant to any major transition.
For any energy source to assume a dominant part of the global energy mix it must be abundant and available at a competitive price. The estimated proved reserves of global natural gas are substantial, most of it conventional and much of it stranded. LNG will compete with non-conventional sources of natural gas—tight gas, coal bed methane, and shale gas. How much of these non-conventional resources prove to be recoverable and at what price are major uncertainties. If history teaches us anything, it speaks to resource elasticity as geologic understanding increases and as technology advances. Cost and availability of natural gas will not constrain a global methane economy.
Over the past 25 years global natural gas demand has increased at an average annual rate approaching 4%. Several projections show growth continuing over the next 30 years and beyond and, if correct, a clear realization of a global methane economy. In the United States residential and commercial consumption has been flat and industrial demand has declined in recent years. Transportation demand has grown, albeit off a small base, but natural gas in power generation consumption has doubled in recent years. With or without emission limits natural gas will continue to fare well in power generation where it competes with coal and nuclear.
The much larger potential for natural gas use is in transportation, although displacing oil is a challenge given its tremendous efficiency, density and versatility. CNG vehicles will continue to expand and gas to liquid transportation fuels hold promise. The real penetration of natural gas in the transport market likely will hinge on the timing and development of an efficient hydrogen fuel cell. The principal method of producing hydrogen now is through steam reforming of methane and as such methane could be the principal raw material for hydrogen.