Energy Giants Opening Natural Gas Spigots

The world’s largest oil companies are pumping more natural gas than ever before, helping spur a rise in profits while sating rising global demand for fuels, which can mitigate global greenhouse gas emissions.  This marks a shift over the past decade for an industry that once focused predominantly on crude oil, with gas in most cases an after-thought, Reuters reported.

Now, the rise of gas-powered electricity generation, surging production from US shale fields and the burgeoning liquefied natural gas industry that makes shipping the fuel possible, have conspired to create a boom.

Exxon Mobil Corp, Royal Dutch Shell Plc, Total SA and Chevron Corp have collectively increased natural gas output by 15% in the past decade, thanks to better technology and lower costs, according to data from Wood Mackenzie energy consultancy.

Analysts expect all to post double-digit increases in second-quarter profit in the coming days, according to Thomson Reuters.

“LNG is the growth commodity for these companies,” said Brian Youngberg, an energy industry analyst with Edward Jones, who expects the global LNG industry to grow at least 4% annually for the next five years.

At Total, gas is actually 61% of output, up from 47% as recently as 10 years ago, according to WoodMac.

Total is expected by analysts to post a 44% jump in second-quarter profit on Thursday to $3.56 billion.

Even as gas production has risen, so too have reserves of natural gas. International energy companies saw gas reserves jump 16% last year to 35.33 billion cubic feet, according to a study by the EY consultancy.

“There are investments and capital expenditures being made to increase the level of gas reserves, and this should only continue,” said Herb Listen, an EY energy analyst.

Exxon sees natural gas usage growing at the fastest rate of any energy type through 2040, reaching a quarter of global demand by that time.

“Worries about energy supplies have faded away, erased in large part by natural gas,” Exxon Chief Executive Darren Woods told the World Gas Conference last month in Washington, D.C.