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More Gas Demand 'Not That Far Off,' Says Investment Bank

Natural gas will play a central role as more than just a "bridge fuel" in a lengthy transition to renewable energy, said Calgary-based AltaCorp. Capital Inc. in a new report. In fact, "we believe it will become the largest source of energy on the planet," wrote the investment banking firm's John Mawdsley.

Economic and practical realities of renewables are often ignored; hydrocarbons are the most economic form of energy currently, with natural gas being particularly attractive, Mawdsley, AltaCorp. managing director of institutional research, said in his 84-page report. The realities of renewables will mean the transition to their widespread use will take "much longer and cost significantly more" than most realize. However, another transition is much nearer.

"We believe that natural gas, the lowest-cost and cleanest-burning hydrocarbon, will play a central role in meeting global energy needs and the long-awaited paradigm shift to increased natural gas demand is not that far off," Mawdsley said.

There's plenty of gas in North America thanks to numerous shale plays. Much of the rest of the world looks promising for shale gas, too, according to recent Energy Information Administration-sponsored research (see Daily GPI, April 7a). Long term, demand for that growing supply is going to come mainly from a handful of applications, according to Mawdsley. They are:

Natural gas, though, is not the end of the line. It, too, is a hydrocarbon that eventually will be depleted.

"Even the huge natural gas resources now being exploited with new drilling and completion techniques will eventually run out (albeit many years from now)," Mawdsley said. "Relying on a nonrenewable resource will eventually force us to reduce consumption and use renewable forms of energy, but the transition will...be difficult and painful."

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