NATURAL GAS-1 GAS HAS ECONOMIC, POLITICAL QUESTIONS

It is time for the worldwide natural gas industry to move beyond environmentalist marketing of its definitely clean-burning fuel. Success or failure of the gas business not be decided in environmentalist terms, however important those terms are in business decisions. Gas fortunes will be determined by economics, about which several issues, some political, remain unsettled.

The industry does itself no harm in touting the clean-burning qualities of natural gas. The problem arises when it tries to create competitive advantage out of bad science. The industry must not, for example, promote faulty theories about global warming in order to make gas look better than other fossil fuels. It might lock itself into promises it cannot keep.

Combustion of natural gas does create less carbon dioxide than combustion of heavier hydrocarbons. As long as global warming fears focus on a buildup of CO2 in the atmosphere, gas looks good. But science is raising large questions about the relationship between CO2 concentrations and global temperatures. And when the assuredly growing volumes of CO2 resulting from human activity are compared with the many times greater volumes of nonhuman origin, the "threat" looks less and less daunting.

NOT THE ONLY STORY

Eventually, global warming alarmists will discover that combustion isn't the only story about natural gas. Methane is a much more reactive greenhouse gas than CO2 is, although it occurs in lower volumes in the atmosphere. Growth in production and handling of natural gas raises chances for methane leaks, a very real technological and managerial challenge for the industry. The chance for mishap may develop into a political hazard, too, as science blunts CO2's punch as a global warming scare tactic.

An environmentalist backlash also looms as the infrastructure requirements of growing gas use become clear. This is a crucial reason to keep the environmental advantages of natural gas in careful perspective.

Future gas supplies increasingly will come from wells not yet drilled. And they will come from wells increasingly distant from markets. At Gastech '93 in Paris last February, J. Roland Williams, a Shell International Gas managing director, noted that global gas demand may rise to 2.5 trillion cu m/year from 2 trillion cu m/year at present. Production capacity will have to increase by 25-40%, he said. And he estimated the investment required to find, produce, and transport new gas in the next two decades at $800 billion-$1.1. trillion.

A FICKLE PARTNER

Investment of that magnitude will create activity not devoid of environmental consequence. Production capacity growth requires drilling, installation of production and processing equipment, laying of gathering pipelines. The growing dislocation between supplies and markets will require new transmission pipelines, cryogenic tankers to carry gas where pipelines cannot go, and liquefecation and regasification plants. Will the political priorities now assigned to clean-burning qualities of natural gas be strong enough to overcome environmentalism's inherent resistance to such alterations of the landscape? Don't bet on it.

Natural gas is a valuable fuel that can and should account for a growing share of the world's energy market. One of its advantages is, indeed, environmental. But the advantage must be kept in perspective. Environmentalist politics is a fickle commercial partner. And the gas industry must find answers to serious economic and political questions if this valuable fuel is to fulfill its potential. A series of editorials beginning here will address some of them.