Thanks to the advent of hydraulic fracturing, natural gas has a new
manifest destiny: By 2040, it will provide a fourth of the world's energy
through its growth as fuel for transportation and electric power generation.
At least that's the projection of Exxon Mobil Corp., the nation's largest natural gas producer.
"It is penetrating into the power sector, which has been predominantly coal in the past. We see it making tremendous inroads there," said Lynne Lachenmyer, a senior vice president at Exxon Mobil who was keynote speaker at a petrochemical conference in Pasadena on Thursday.
The Irving-based oil and gas behemoth expects that in 30 years, natural gas will overtake coal as the second-most used energy source after oil, as demand for the natural gas climbs 65 percent, Lachenmyer said.
"We see a lot of people looking at natural gas as a form of transportation fuel, so you're beginning to see compressed natural gas or liquefied natural gas applications for fleets within large communities," she said. "Its growth rate is higher than the balance of the energy mix, so it's basically increasing its market share on an annual basis."
Addressing the engineers, bankers and Port of Houston officials at the 2013 Petrochemical and Maritime Outlook Conference, Lachenmyer said even as solar and wind pick up as sources of energy, fossil fuels aren't going anywhere.
Wind power is expected to grow by 7 percent per year while solar power will be 20 times more prevalent by 2040. Still, wind will make up just 7 percent of the world's stockpile of energy in that year and solar will make up 2 percent, Lachenmyer said. Meanwhile, oil and natural gas will make up 60 percent of the world's energy supply, up from 55 percent today, she said.
Energy demand will be a third higher by then that it is now, pushed by population growth and rising economic prosperity, she said. The increase is equivalent to the current energy consumption of Russia, India, Africa, Latin America and the Middle East combined
In the U.S., new technology including hydraulic fracturing has unlocked massive, once-unreachable natural gas resources trapped in dense shale rock across the country. That, in turn, is creating an economic force that is disrupting and boosting businesses as diverse as the auto industry, agriculture and petrochemicals.
Natural gas is a fuel and raw material for petrochemical production.
Petrochemical growth promises to be a boon for the Port of Houston, where the industry and the export business have formed a symbiotic relationship. Just five years ago, before the shale revolution, petrochemical exports were declining, and the U.S. nearly became a major importer of petrochemical products.
The natural gas boom is turning that around, which means both increased business and greater challenges for the Port of Houston.
Vison for port
Port Commission Chairman Janiece Longoria laid out a vision for meeting those increased demands, including development of a storm surge gate to guard against disaster in a major hurricane strike, and improved cost-effectiveness in the regular dredging crucial to the flow of vessel traffic in the Houston Ship Channel.
"It's no surprise that 2012 and 2013 have been record years," she said, adding that the petrochemical industry is investing $35 billion in port-area infrastructure over the next three years.
More than 120 petrochemical construction projects have been announced in recent years, promising $80 billion in investments throughout the U.S. Gulf Coast region.
Petrochemicals now make up 12 percent of U.S. exports, bringing in $188 billion a year.
Lachenmyer cited American Chemistry Council projections that chemical exports will outpace imports and grow from an $800 million trade surplus in 2012 to more than $46 billion of net trade exports in 2020.
"This improvement in profitability is what's giving rise to the desire to continue to invest, to grow our footprint here alongside the shores of the Houston port," she said.
(c)2013 the Houston Chronicle
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