Demand for natural gas is on the rise, and is expected to climb over 50 percent by 2035, the International Energy Agency said Tuesday. Also, Exxon Mobil Corp. top executives believe that escalating demand will make natural gas the second largest primary energy source by 2040.
The estimates show that gas could possibly take up 25 percent of global energy by 2035 surpassing coal, but remaining second to the world's top energy source - oil. More recently there has been an increase in natural gas use by 40 percent in March compared to a year earlier, according to the U.S. Energy Information Administration's Electric Power Monthly report. Also in the EIA report, use of coal dropped by 20 percent.
Exxon Mobil CEO Rex Tillerson is already anticipating natural gas overtaking coal as a prime energy source when Exxon Mobil became the nation's largest gas producer after acquiring XTO Energy for $25 billion in 2010.
"We're studying the possibilities of exporting natural gas from North America, from both the U.S. and Canada, because of the abundant supply that has now been confirmed in North America," CEO Rex Tillerson told shareholders on Wednesday.
Skyrocketing gas production in North America has amped up supply, and Exxon Mobil is no exception with the Irving, Texas based company having lots of gas it wants to sell.
According to the IEA, the upswing in production of unconventional gas in North America prolonged the potential of further demand increases in the US and Canda. Furthermore, the IEA said the sharp increase in gas production also prolonged "the emergence of a large-scale unconventional gas industry in other parts of the world, where sizeable resources are known to exist."
In the IEA special report, Golden Rules for a Golden Age of Gas, said more demand and continual production of nonconvential gas would aid in energy security, increase energy diversity, and reduce energy costs.
Meanwhile, the Exxon CEO said economic pressures have suppressed natural gas prices but it has not negatively impacted Exxon Mobil's outlook on gas.
However, the sharp rise in gas production in North America has brought prices to their lowest levels in 10 years and has presented new challenges for producers. Among the challenges is the continual controversy surrounding hydraulic fracturing, or fracking, which is the main drilling technique behind the natural gas surge.
Fracking has been controversial with environmental groups who claim the process is bad for the environment.
by RTT Staff Writer
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