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Exxon Move Signals Future of Energy

There are some elements of the energy debate that one can count on. The first is that the role of oil and coal will change in the coming years. The role of alternative fuels will be limited for the foreseeable future. The use of wind and solar and geothermal and all the rest will barely add up to 5% of the country’s energy needs in the next ten years – even under the most optimistic assessment. That leaves only one fuel as the real future of energy – both for power production and for transportation - and that fuel is natural gas.  Exxon has now acquired one of the largest natural gas producers in the world in an all stock deal that cost $31 billion. XTO will now become a company that is devoted to finding natural gas deposits in dense rock formations all over the world.  The US was once an importer of gas and now sits on some of the world’s largest reserves. The use of gas as a power plant fuel will expand, that is certain. It will also be employed more and more for its traditional uses; but the real future will lie in transportation. The Exxon involvement hastens that day as they have the incentive to go along with their distribution system. Much attention has been focused on the electrics but the real advances may come from the natural gas powered car and truck.