The era of cheap oil is gone from this planet. Changing demographics and rapid industrialization of developing-nation energy consumers means an accelerated need for fuel, and increasingly natural gas will meet that demand. In this first decade of a new century, world energy demand will grow 2% per year, gas use will rise 3% a year and liquefied natural gas (LNG) use should increase 6% annually. In the U.S. about 23% of total energy use is supplied by gas, amounting to about 24 trillion cubic feet (tcf) a year, with 33.2% of it fueling industry, 23.8% burned in electricity generation and 7.7% consumed to drive the gas extraction and distribution sector. As a curious aside, it is projected that the oil and gas extraction industries will experience a total employment decline of 28% in this first decade through 2012, while job growth in American industries should grow by 16% in the same period. New technology will continue to improve productivity in oil and gas extraction sectors.
Especially for pipeline construction with associated facilities (compressors and pumping stations) and for LNG supply, demand growth portends a long-term business opportunity in the 2004 through 2012 time frame. Gas has inherent advantages as fuel: a) compared to oil combustion, and c) in power generation CO2 emissions per kilowatt are about half that of coal and oil. Currently LNG contributes only 5% to gas consumption but that is fast changing. Beginning with the first U.S. user of LNG in 1941 at Chicago Union Stockyards installed by Continental Oil as a peak-shaving measure, the LNG industry has languished due to high cost. Then in 1971, a LNG terminal was built in Boston to store gas for peak-shaving (see Jan. 2004 IH, p 12 for explanation of peak shaving). But remember that while LNG was too expensive, industrial use of natural gas was first implemented by Chinese about 1000 AD and natural gas was transported in bamboo tubes to fuel brine-to-salt drying plants in Sichuan.