Best Bet on Natural Gas Is in Transportation

摘要

The petroleum industry is betting heavily on natural gas as its ticket to an extended future in a world determined to contain climate change. And the natural gas sector is betting equally heavily on power generation to provide the strong demand growth required if it is to take up the slack within the broader petroleum industry as oil consumption plateaus and perhaps starts to slide within the next few decades. But is this a sound set of strategies or a high-risk gamble? Recent experience underscores the risk side. The bet on gas over oil is probably still correct, given the lower carbon emissions associated with gas. But depending too heavily on power-gen for growth in gas use may be too big a gamble given the size of the stakes. A side bet that could help moderate the industry's risk profile and ultimately allow it to stay at the high margin end of the energy business is to focus on natural gas for transportation, both directly and in hydrogen fuel cells.