Exxon Mobil (XOM) CEO Rex Tillerson has indicated that the natural gas boom in the U.S. could boost the global economy. Tillerson said that “natural gas is quickly becoming a key enabler of economic growth and environmental progress around the world,” with demand in Asia set to rise by over 50% in the next 30 years. In separate remarks, Royal Dutch Shell (RDS.A) CEO Peter Voser agreed, stating that gas reserves are assisting in the U.S. economy’s recovery. I am not sold on the idea that natural gas development is the solution to the worldwide economy’s woes, but I do think that natural gas is the ticket that Exxon Mobil will use to break past $90 by this time next year.
Tillerson Predicts the Future of Natural Gas
Tillerson believes natural gas will continue to displace coal as a primary energy source for electricity production in the years to come. His remarks came amid discussion of whether Exxon Mobil’s acquisition of XTO Energy in 2010 was a wise strategy. In my opinion, it was. Though natural gas prices will take time to rise to normal levels, Exxon Mobil purchased itself the title of the U.S.’ largest natural gas producer, a position that would have taken years to build from the ground. This is key since fracking technology continues to improve, and latecomers are suffering from a lack of knowledge and resources as well as increased land prices. The acquisition also supports Exxon Mobil’s petrochemicals arm, which continues to contribute to its bottom line.To continue reading, click here.