Fill me up with Natural Gas! Sara Kent of The Wall Street Journal writes "Natural gas is set to emerge as a significant new transportation fuel over the next five years, raising the prospect of a challenge to oil's dominance in the sector, the International Energy Agency said Thursday. Already, gas demand in road transport grew tenfold between 2000 and 2010, but cheap gas in the U.S. as a result of the boom in production of shale gas, and concerns over air pollution and oil dependency in China, could help it develop into a more mainstream fuel, the IEA said."
In its five-year gas outlook, the Paris-based energy watchdog said it expects natural gas use in road and maritime transportation to rise to 98 billion cubic meters by 2018, covering around 10% of incremental energy needs in the transport sector. According to the IEA, this shift will do more to reduce the medium-term growth in oil demand than both biofuels and electric cars combined. "Gas is already a major fuel in power generation, but the next five years will also see it emerging as a significant transportation fuel, driven by abundant supplies as well as concerns about oil dependency and air pollution," said Maria van der Hoeven, the IEA's executive director. Several hurdles still exist that could stymie the development of natural gas as a transport fuel, not least the need to develop infrastructure like fuelling stations, the IEA said. But in several countries, notably the U.S. and China, activity is already underway to develop the sector." The Christen Science Monitor writes "The natural gas revolution is getting some wheels – and just in time for the gas industry. Rising use of natural gas in the transportation sector will offset a global slowdown in the growth of natural gas to produce electricity, according to a report released Thursday by the International Energy Agency. That timely boost will mean that America's boom in natural gas is likely to continue for several years, even if the focus begins to shift away from power plants and toward cars and trucks."
Not everyone is convinced natural gas will do for auto companies what it did for utilities. Changing fuels requires an overhaul of existing infrastructure, and natural gas comes with its own set of environmental concerns. In many regions, it is difficult for natural gas to compete with the range, power, and price of gasoline. But natural gas has already proven itself a useful alternative for fueling large vehicle fleets and it's even more attractive in parts of the world where gasoline prices are high." Reuters wrote that U.S. natural gas futures ended lower on Thursday, pressured by technical selling after three straight gains and a slightly bearish weekly inventory report despite fairly hot weather forecasts for northern tier states that should stir more demand. The U.S. Energy Information Administration reported that total domestic gas inventories rose last week by 91 billion cubic feet to 2.438 trillion cubic feet.