A new “age of gas” may be dawning in the worldwide energy industry that will alter assumptions about supply, demand and cost, a GE Oil & Gas economist told the INGAA Foundation at its annual meeting. The Dana Point, Calif., conference, marking the organization’s 25th anniversary, attracted some 350 attendees.

Michael Farina, senior marketing leader for the General Electric Co. unit, opened the meeting’s keynote address by saying that “gas is at the center of the energy industry” now and that has “created a number of megatrends” that will impact existing assumptions. With degrees in economics from the University of Colorado and Colorado State University, Farina was director of natural gas consulting at Cambridge Energy Research Associates before joining GE.

“Gas is an important part of where the world is going and we need to go out and talk about that,” he told the INGAA Foundation members—not just within the oil and gas business but more broadly with energy consumers, governments and other interest groups. He projected that gas could fill 26% of the world’s primary energy supply by 2030, moving in front of coal, oil, nuclear, renewables and other basic energy sources.

Attractive gas prices and stable supply will, in time, back out demand for fuel oil, coal and other energy sources, he predicted.

Farina pointed to four key drivers of a move toward greater gas usage—supply diversity, environmental impact mitigation, the growth of worldwide infrastructure network, and growing cooperation and collaboration among suppliers, infrastructure operators and consumers.

Supply diversity is of particular concern to midstream operators, such as INGAA members, he said. Distributed supply sources from multiple areas are creating a need for new and repurposed assets. Gas processing and transportation networks worldwide continue to evolve from simple point-to-point systems, to hub-and-spoke networks, and finally to multiple, linked networks.

Collaboration with customers, in particular the power industry, is a necessity, Farina said, adding some power firms view recent government moves to limit coal’s use as a temporary trend. Some power generation executives worry that gas supplies will fall in outlying years and that will cause prices to rise to the point where coal will again be competitive. That would make construction of new gas-fired power plants, or conversion of existing coal-fired plants, uneconomic.

“Gas has to hit a sweet spot, a strike zone, where the price is high enough to support investment and supply but low enough to be competitive,” he said.

The Marcellus and Utica plays in the Northeast U.S. “are one of the big stories, we have gone from shortage to abundance,” Farina said. Those two plays, coupled with growing production from other North American unconventional sources, could easily move domestic production from around 72 billion cubic feet per day (Bcf/d) this year to more than 100 Bcf/d by 2020 or shortly thereafter. Development of unconventional shales abroad lingers at primary stages but could have a significant impact in outlying years.

For the U.S. to reach a 100 Bcf/d level, five things need to occur. Farina said the shale plays must produce in the long term, gas infrastructure (particularly in the Northeast) must grow, the U.S. must have a stable power-sector policy, development of a gas-based transportation fuel industry must happen and there needs to be a more complete integration of a North American gas grid, he said. Combined, “this will create a tremendous opportunity for investment,” he predicted.

Abundant North American gas supplies stand ready to greatly impact the worldwide market for gas and that can happen through a gas “network evolution. That is one of the key themes and North America is ahead of the curve,” compared to other gas-producing nations, in supplying its infant LNG export industry, he said.

Summarizing his presentation, Farina told the INGAA meeting that “we have a historic story to tell.” Conveying the gas story, and responding to its potential, will allay the fears of the power industry and other potential gas customers.