By John Richardson
ExxonMobil’s purchase of XTO Energy for US$41bn seems to support the widely-held view that natural gas is the fuel for the future.
XTO specialises in the technology necessary to exploit shale gas and other hard-to-get-at unconventional gas reserves, including the large amounts of shale gas in the US – one of the reasons why the States has gone from natural gas feast to famine.
ExxonMobil will establish a separate division to manage production of both oil and gas from unconventional reserves.
This suggests, perhaps, that the focus and incentives created by setting up such a division will lead to XTO Energy and other breakthrough technologies being employed throughout the world.
Europe has unconventional reserves, which perhaps if successfully exploited could provide an alternative – a long with liquefied natural gas (LNG) – to sometimes politically-fraught pipeline reserves.
Easy-to-get-at gas in the Gulf Cooperation Council region of the Middle East is also becoming increasingly scarce, leading to evaluation of exploiting shale and tight gas.
The energy of the future argument rests both on concerns over Peak Oil and gas’s lower carbon footprint.
The International Energy Authority (IEA), in its World Energy Outlook 2009 report launched last month, described natural gas as a “bridging fuel” until even greener alternatives become viable.