In hot pursuit of a fuel that is less risky and more accessible

“THE bad news is we didn’t hit oil,” ran the old wildcatter’s joke. “The good news is we didn’t find gas.” Potentially dangerous and always more difficult to manage than pouring liquid into a barrel, natural gas used to give oil companies a headache. Now gas is dominating the thoughts of Western oil bosses and, increasingly, their firms’ portfolios. Seven of the eight projects Exxon Mobil completed last year were for natural-gas developments. Two of the three it has scheduled for this year are also gas-related. Royal Dutch Shell says that by 2012 half of its output will come from gas. The current high oil price still makes crude the prize for any self-respecting major. But the West’s big oil companies are growing gassier.

In part this is because oil is getting harder to find, for geological and political reasons. Global oil production will peak within a few decades, if not before. And the remaining “easy oil”—which can be extracted without fuss or expense—is increasingly out of bounds for Western firms. Almost 90% of it is in the hands of national oil companies which have, with few exceptions, blocked Western giants from their riches. This is forcing Big Oil into trickier and pricier areas, notably deepwater fields, such as those in the Gulf of Mexico and off Africa’s west coast, and unconventional reserves, such as Canada’s tar sands. Hence the appeal of gas, and a string of deals in Australia and America. …