Looking to the faraway, distant economic landscape of 2035 and beyond, industry leaders are beginning to accept the likelihood of flattening or declining oil demand in the extreme long term.
Already, though, they are employing various strategies to prepare, as 10/12 Industry Report details in its new cover story.
Even as current cost factors buoy oil demand, the largest oil producers are fixated on a growing long-term preference for natural gas and renewable forms of energy.
While there is disagreement as to the role oil will play past the mid-century mark, economists say that the power and transportation markets will ultimately determine its future, as population increases and the emergence of developing countries lead to an increasing need for energy.
Key is the significantly greater role that natural gas will play in that scenario, with some estimating that demand for the product will double through 2040.
In the meantime, here’s the big, perhaps unanswerable, question: Will Louisiana remain a major energy player when the demand shifts?
Given the increased development of shale plays and the proliferation of LNG facilities in the last 10 years that have propelled the U.S. and Louisiana from importer to exporter, natural gas may very well secure Louisiana’s spot at the table.
Energy Institute of Louisiana Director Mark Zappi says predicting where the market is going to be decades into the future is nearly impossible due to unknown political, technological and economic factors, but there is one virtual certainty: Natural gas is going to be big. Natural gas has its own environmental attributes, emitting up to 60% fewer GHGs than coal for power generation, and is an ideal source of reliable power while also supplementing intermittent renewable energy sources such as solar or wind.
“I think natural gas has got a very bright future,” Zappi says. “Every new power plant is going to be natural gas or solar, with natural gas being the predominant one that you’re going to hear about over the next 20 years.”
Read the full cover story, and be sure to check out the new quarterly issue of 10/12 Industry Report. Sign up for a free subscription of the quarterly publication. Send your feedback, story ideas and company news to editor@1012industryreport.com.
