Despite Diesel’s Decline, Nat Gas Seen as Challenger to Oil’s Monopoly as Transportation Fuel
Despite the recent downturn in the price of oil, the use of natural gas as a transportation fuel could displace more than 1.5 million barrels a day of oil demand by 2030, according to a new report.
Lower oil prices “may slow adoption” of natural gas in the short term but are unlikely to halt it, according to the report from business research firm IHS Inc.
The trucking industry is expected to have one of the highest levels of natural-gas adoption as fleets have a relatively quick turnover, which could lead to faster adoption.
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“The fall of oil prices has diminished much of the glow from what was an overly optimistic market opportunity for natural gas in transportation,” Michael Stoppard, IHS Energy, chief strategist for global gas, said in a statement.
“Nonetheless, the shift to greater use of gas in trucks is set to continue. It is widely accepted that power generation is the primary growth market for natural-gas demand, but [natural] gas as a fuel offers a new market with potentially more value,” Stoppard said.
The report from IHS, "LNG in Transportation: Challenging Oil’s Grip," says demand for LNG in the trucking and marine sectors could account for 10% of the fuel’s use by 2030.
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“Much of the launch pad for expansion, such as critical infrastructure, is either in place or close to being in key markets such as the United States and China, awaiting a rebound in diesel prices,” the report says.
Demand for natural gas in trucks is forecast to reach 81 billion cubic meters by 2030, split between LNG and CNG.
