Is Gas the future of Energy?
Gas Companies say Yes
At the World Gas Conference, British Petroleum (BP) and Chevron made the pronouncement that gas is the energy of the future. At first glance this may just seem like a ploy for major gas company’s to try to get more money out of consumers. But when a closer glance is taken at this statement, there is a slight and I mean very slight chance that gas can be seen as a major part of the future energy market.
In comparison to coal gas has half the amount of carbon emissions when used to generate power and is abundant and cheap. The abundant and cheap part is probably what gas really has going for itself. While the use of renewable sources of energy has continued to increase, the price of these renewable sources of energy can’t compete with the cheap price of gas. So as long as companies continue to be motivated by gains in profit, gas will likely be used more than renewable sources of energy, at least in the short term.
Gas companies are also searching for ways to make gas less harmful to the environment by addressing the leaking of methane, a potent greenhouse gas. In fact, the only way gas would be taken seriously as being an important part of the future is by making gas cleaner, which can only be done by researching how to reduce methane emissions. Gas companies know this and are working to address the issue by participating in technology sharing and target-driven programs.
A Love-Hate Relationship with Renewable Energy
While gas companies continue to make money from fossil fuels one would assume that the major gas companies would hedge their bets on gas and oil by investing in renewable energy. However, this has not been the case. Although the major gas companies have been getting involved in the renewable energy market, their involvement in the renewable energy market is best explained as a love-hate relationship. BP is the gas company that seems to be focusing the most on renewable energy. On their website, BP boasts that they have “the largest operated renewable energy business of any major international oil and gas company.” In particular, BP has put much money into wind energy, now operating 13 wind farms. However, more recently the company has divested interest in the renewable energy market.
Chevron and Royal Dutch Shell plc have also made ventures in solar, wind, biofuel, and geothermal energy. However, just a year after venturing into the renewable energy market, Chevron sold off its renewable energy unit, deciding to focus more on oil and gas. On the other hand, Royal Dutch Shell plc has recently made a foray into the renewable energy market by buying a 44% stake of Silicon Ranch, a renewable energy developer.
The Future of Energy
I wouldn’t count on gas being the future of energy mostly because of gas’ reputation as a fossil fuel. Even if the methane emissions problem is solved gas has a reputation of being unclean and bad for the environment. Over the next few years and decades, families will probably move towards using renewable energy more and gas and other fossil fuels less. Companies will probably move toward the use of solar energy at a slower pace due to the high cost of renewable energy when compared to gas.
It remains to be seen what will happen to the major gas companies. Eventually, people will have to move to more renewable forms of energy. What’s keeping gas in the game is really it’s cheap price. This means that gas companies will continue to do well in the short run but in the long run the gas companies that invest the most in renewable energies may be the only companies that survive.