Oil Dominance Wanes as Clean Gas Takes the Lead
The energy industry has begun the "last days of the age of oil,"
with a cast of cleaner fuels waiting to take center stage,
according to ARCO CEO Mike R. Bowlin.
Oil is not dead, though. "Because 10 or 15 years from now there
still will be a large and healthy market for oil - of course. But
it is also true that the market share for oil will diminish as the
demand for other forms of energy grows."
In a Cambridge Energy Research Associates Executive Conference
address that recalled Britain's coal-created "killer fog" of 1952,
Bowlin noted demand for energy over the next 20 years is expected
to increase by 50% or more. "Global demand for clean energy -
natural gas, renewables, electricity and new energy technologies -
will grow faster than overall demand for energy, including oil and
Growing energy demand coupled with growing concern for the
environment is, of course, good for natural gas. "In the near-term,
companies like ARCO can look to natural gas, a still
under-appreciated fuel source. Natural gas can alleviate the
increasingly serious energy shortages facing East Asia and at the
same time help alleviate local air quality problems." Also poised
for growth is liquefied natural gas (LNG). But two things have to
happen for LNG to secure an established place in the energy market.
"It must be cost competitive with other energy forms - namely coal
and oil; and there must be incremental demand for electricity.
"If the delivered cost is low enough, natural gas, utilized in a
combined-cycle gas turbine is, in nearly all situations, the least
expensive - and cleanest - way to generate electricity." Bowlin
touted ARCO's 80% ownership of major gas player Vastar Resources as
evidence of the company's commitment to gas development
domestically and abroad.
Joe Fisher, Houston
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