Natural Gas Set to Challenge Oil as a Transportation Fuel, IHS SaysEngineering360 News Desk | June 04, 2015
A study by IHS forecasts significant growth and value in the market for natural gas and liquefied natural gas (LNG) as a transportation fuel. LNG in Transportation: Challenging Oil’s Grip, says that use of natural gas as a transportation fuel could displace more than 1.5 million barrels per day (mbd) of oil demand by 2030.
The highest level of adoption will be in high-fuel consuming applications such as trucks and ships.
The study says that worldwide oil consumption in trucks is almost as high as in cars but notes that it is often more economic for truck fleets to switch to alternative fuel sources. Fleets have a relatively quick turnover, leading to early adoption of new technologies.
IHS forecasts that natural gas demand in trucks will reach 81 billion cubic meters (BCM) by 2030 and be split between LNG and compressed natural gas (CNG). An additional 17 BCM in LNG demand is expected to come from ships, also by 2030. LNG demand in the truck and marine sectors is expected to account for 10% of all globally traded LNG at that time.
While the growth outlook for gas demand in fuel is strong globally, the study does find big differences between drivers and outcomes in key regions. However, in all regions the tax treatment of fuels will be critical in determining consumer choice, especially as oil prices fluctuate. The study says that a minimum level of fueling infrastructure is essential to jumpstart adoption.