GE: The Age of Gas is Upon Us
But the price of gas will play its part.
“The big story that we’re trying to lay out there is this idea that there is a ‘strike zone’ where natural gas can compete effectively against other fuels,” Farina said.
“It’s different in different regions depending on the underlying cost of supply and the underlying cost of transportation. And we don’t know if gas is going to end up in that strike zone, but we think for that Age of Gas to become a reality it has to find its way in there.
“The idea is that prices have to be high enough to support investment in new supplies but low enough to be competitive against alternative fuels, particularly against coal … and particularly in a lot of the emerging markets. And I think one of the challenges is that if there isn’t increased flexibility, the right kinds of partnerships and other things to drive that competitiveness of gas versus coal you’re going to see a lot of those markets remain coal markets.”
On the other hand Farina believes that gas versus oil “has a bright future in a lot of places”.
In fact, the GE report expects total demand for gas will rival that for oil. Global gas demand today is about 3,500 billion cubic meters (Bcm) per year (123.6 trillion cubic feet (Tcf)), or about 70 percent of the size of the global oil market. The GE Age of Gas outlook estimates global consumption will grow by nearly 1,300 Bcm (45.9 Tcf) of gas by 2025, which is a 36-percent increase over its present size.
Oil represents 31 percent of global energy use today, but should fall to 27 percent by 2025 as efficiency gains, conservation and substitution effects take hold, according to the GE report. This decline will occur largely due to high prices further squeezing oil out of stationary fuel applications, as well as the slow but-steady-adoption of alternative transportation fuels.
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