Technology About Gas

The fuel of future is gas

 By Nicholas Newman
About gas

The first liquefied natural gas tanker ship passed through the expanded Panama Canal on July 25, hauling gas from the U.S. Gulf Coast. The shortcut means less time and money spent getting American gas across the Pacific. Natural gas it’s cheap, burns cleaner than other fossil fuels and it’s plentiful. Nicholas Newman looks at why natural gas is likely to be at least for the short to medium term, a fuel for the future…

(Cover photo by MIT Mobile Experience Lab)

In 2014, natural gas accounted for 25 percent of the world’s energy consumption. BP’s Energy Outlook 2035 forecasts that about a third of the probable rise in global energy demand will be supplied by natural gas, another third by oil and coal together and another third by non-fossil fuels, making natural gas the main fossil fuel in the energy mix. This rise in the importance of gas owes much to its intrinsic properties—it is cleaner than coal or oil, it is plentiful and it is also affordable.

Consumption of natural gas worldwide is forecast to rise from 120 trillion cubic feet (tcf) in 2012 to 203 tcf in 2040. The industrial, electric power and transport sectors together are expected to account for 73 percent of the total increase in the world’s natural gas consumption, principally by India, China, Africa, the Middle East and Southeast Asia. With increasing incomes and GDP growth, the transport sector is expected to grow significantly, absorbing 26 percent of energy consumption. There will be increased market penetration of natural gas vehicles in China, Italy and America; diesel train locomotives will be fueled with liquid natural gas (LNG). In shipping, LNG will reduce the use of heavy fuel oil.

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Drivers for gas

Advocates for gas cite its environmentally friendly credentials for power generation and transport and view it as a bridging fuel to a low carbon future. Its price competitiveness and abundance make it the fuel of choice for energy-intensive industries such as chemicals, plastics, steel and textiles. Countries looking to rapidly increase electricity generation see gas as a cheaper and faster option than building coal, oil or diesel powered stations. Governments, alarmed by the current “dieselgate” scandal and the eventual ratification of the COP21 Agreement in Paris and its successors, may well adopt clean energy policies by setting tougher emission standards to contain climate change. Gas will be the main beneficiary.

Supply of natural gas

Proven global natural gas reserves amounted to 603 tcf last year, sufficient to meet nearly 53 years of current production. Reserves have increased substantially in the past decade with major discoveries in offshore Mozambique, Tanzania, Angola, Malaysia and, most notably, Egypt’s super-giant Zohr field. Last, but not least, there is the ongoing exploitation of North America’s shale, including the giant Marcellus field. To meet the expected increase in demand for natural gas, the world’s natural gas producers will increase gas supply by nearly 69 percent by 2040.

Shale gas

Shale gas accounts for around 10 percent of today’s gas output. Predicted growth of 5.6 percent a year will more than double its share to 24 percent by 2035. The US will remain the largest producer accounting for three-quarters of global output with the remainder coming from shale formations in China, Argentina and Algeria and production of “tight” gas and coal-bed methane in the US, China and Canada.

LISTEN TO THE PODCAST: Zohr discovery by Marco Alfieri


Liquid natural gas

Global LNG export capacity will rise by 188 billion cubic meters by 2021 of which the bulk will come from Australia and the US as liquefaction capacity under construction in the Gulf States is completed. Exports of LNG and the re-opening of the widened Panama Canal offer hard pressed US gas producer’s relief from a supply glut. The first LNG tanker destined for China from the US Sabine Pass export plant passed through the Panama Canal on July 25. Many more will follow since the Panama Canal route makes access to Asia easier, cheaper and faster. Worldwide, supplies of LNG will increase according to Patricia Roche, senior consultant at engineering firm Mott MacDonald, “there are over 100 liquefaction projects at various stages of construction” and large new offshore discoveries in Mozambique, Tanzania and in the eastern Mediterranean have yet to reach a final investment decision.

Gas in power generation

The share of natural gas in power generation is expected to rise from 22 percent today to 28 percent by 2040. However, if China replicates the US shale energy revolution, the outlook for natural gas electricity generation could be greater—gas could become the leading source of electricity generation. According to the IEA’s World Energy Outlook 2015, India is home to a sixth of the world’s population but only uses 6 percent of the world’s energy. Rising population, urbanization and industrialization will require the power sector to quadruple in size to keep up with projected electricity demand. To accommodate a tripling in size of SE Asia’s economies will require 400 GW of additional power generating capacity by 2040 of which 40 percent is expected to come from coal.

While the IEA foresees a decline in natural gas, it is just possible that new gas finds in the region and the cheapness of LNG could boost gas-to-power. BP predicts that Africa will have the fastest and largest growth in energy demand—some 88 percent by 2035 owing to increased population, urbanization and determination to boost electrification rates.

According to management consultants EY, only 7 of 48 sub-Saharan African countries have electrification rates above 50 percent with the remainder averaging just 20 percent currently. Management consultants, Mckinsey predict that if each country in sub-Saharan Africa were to build enough capacity to meet its domestic needs, gas could join coal as the dominant source of power in the region supplying around 700 TWh.

Gas-to-power is a suitable option for countries needing to expand their power generation sector given widening geographical dispersion of discovered gas, pipelines and trade. For countries without pipelines, the attraction of LNG-to-power is enhanced by the increasing availability of low-cost re-gasification plants, which make it easier to import LNG. Natural gas and LNG-fired power plants are sufficiently flexible to balance the intermittency of increasing local supplies of solar, wind and hydropower.

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Gas as a transportation fuel

The transport sector is responsible for a large chunk of today’s greenhouse gas emissions, which, on current trends, are expected to double by 2050. In the European Union road transport is responsible for 20 percent of all CO2 emissions. Replacing petrol and diesel with natural gas will reduce fuel costs and pollution and this trend is underway. Worldwide there are nearly 15 million natural gas vehicles on the road. China is leading the way with just under 2 million natural gas vehicles on the road rising to 5 million by 2020. While in Europe, Italy has almost one million on the road. According to the EIA International Energy Outlook 2016, the share of natural gas as a transportation fuel will rise from roughly 3 percent today to around 11 percent in 2040, by which time 50 percent of buses, 17 percent of rail freight and 15 per cent of large trucks will be fueled by natural gas.

Road veichles

The “dieselgate” scandal combined with recent recognition of the danger to health should focus international attention on vehicle emissions and perhaps inaugurate tougher emission standards. Also, $100 a barrel oil is an impetus towards vehicles running on something other than petrol and will boost the uptake of natural gas, hydrogen and electricity to run cars. Natural gas vehicles generally emit 13-21 percent fewer greenhouse gasses than comparable gasoline and diesel vehicles. The cost savings are not negligible.

The economic and environmental advantages of gas for heavy goods fleets and owners are substantial with natural gas costing $0.51 a mile—a saving of roughly 37 percent on diesel. The adoption of natural gas by the global truck segment, most notably in China, India, Europe, Russia and Africa offers huge savings and significant reduction in emissions, which is good news for environmentalists. The IEA predicts that China and the US will account for most gas consumption in transport by 2035.

Replacing petrol and diesel with natural gas will reduce fuel costs and pollution...


In 2012, the seven major US freight railroads collectively consumed more than 3.6 billion gallons of diesel, accounting for 7 percent of total US consumption. The benefits of switching to gas fueled locomotives are huge for LNG and offers a cost saving of 40-60 percent for rail. GE and Electro-Motive Diesel are currently collaborating with different railway operators to develop LNG-diesel engines and are running pilots across North America. Last year, US railway Norfolk Southern took possession of a new fleet of eco-locomotives to replace the entire stock of their Chicago Yard. Part funded by a $19 million grant from the US congestion Mitigation & Air Quality Improvement Program, these 3,000 horsepower engines possess the latest diesel emissions reduction technology and will use less fuel than the traditional locomotives.

BNSF Natural Gas Locomotives


Shipping is also a major contributor to pollution since the majority of ships and tankers rely on heavy marine bunker oil and diesel, which is 2,700 times dirtier than road diesel according to Lief Miller, CEO of Conservation NGO, Naturschutzbund Deutschland. To put this into perspective, in 2015-2016, the world’s merchant fleet numbered some 50,420 vessels, of which a third (16,900) were bulk carriers and just 410 were LNG tankers. Oil, which was the most valuable globally traded commodity until the collapse in its price, was transported by around 2,300 tankers and incurred around 12 percent of global shipping emissions.

The first LNG powered cargo vessel

The introduction of Emission Control Areas in North American and European territorial waters has led to the adoption of low sulfur fuels and encouraged the shipping industry to look to sail, LNG, solar, hydrogen and even batteries to power their ships. As a ship fuel, LNG meets many of the emissions standards (SOx, NOx, PM and CO2) due to be imposed in coming years. Last year there were just under 100 LNG fueled ships in operation ranging from ferries, coastal and patrol vessels as well as two US-owned container ships said to be the cleanest by achieving a 97 percent reduction in sulfur emissions. DNV GL, a provider of independent advisory services to the maritime and energy industries, expects that by 2020 LNG might fuel around 600 vessels including large ocean going vessels. The trend towards LNG as a marine fuel of the future has started.

The consensus of energy forecasters is that non-OECD countries will account for the bulk of the world’s increase in energy consumption as they seek to industrialize and satisfy the needs of their growing populations. Natural gas, shale gas, LNG and coal-bed methane will become major beneficiaries of this rise in demand, facilitated by increasing supply and the imposition of ever more stringent clean energy policies.

about the author
Nicholas Newman
Freelance energy journalist and copywriter who regularly writes for AFRELEC, Economist, Energy World, EER, Petroleum Review, PGJ, E&P, Oil Review Africa, Oil Review Middle East. Shale Gas Guide.