The Reason Big Oil is Getting Gassy
An Economist article republished in the Winnipeg Free Press does a good job of explaining why natural gas is on the ascendancy in the energy universe, and why oil will soon be in decline. Need evidence? Last year, seven of eight Exxon Mobil projects that were completed were natural gas projects. This year two of three scheduled projects are natural gas related. Royal Dutch Shell says by 2012 half (50 percent!) of its energy output will come from natural gas.
What’s caused this shift from oil to gas in the world’s largest energy companies?
In part, this is because oil is getting harder to find, for geological and political reasons. Global oil production will peak within a few decades, if not before. And the remaining “easy oil,” which can be extracted without fuss or expense, is increasingly out of bounds for western firms.
Almost 90 per cent of it is in the hands of national oil companies which have, with few exceptions, blocked western giants from their riches. This is forcing Big Oil into trickier and pricier areas, notably deepwater fields such as those in the Gulf of Mexico and off Africa’s west coast, and unconventional reserves such as Canada’s tarsands. Hence the appeal of gas, and a string of deals in Australia and America.*
The article is a quick read, and will give you a good background for the developing energy landscape, and why shale gas is so important for America.
*Economist, via Winnipeg Free Press (July 5) – Natural gas natural alternative for oil giants