Gas is cleaner than oil, but still has a transition problem

As a relatively clean fossil fuel, natural gas will play a useful role for years to come. It is less certain that it will be a profitable one.

Exuberant investment in new gas reserves and liquefaction facilities in recent years helped globalize the market but also created a glut. Growing Asian demand has pushed prices up dramatically this month, raising hopes of better times. But any sustained recovery in prices and profits will require fossil-fuel producers to resist the temptation to overinvest once again in their favorite green-transition fuel.

Future gas demand will balance two major trends: growing prosperity in Asia driving an increase in consumption; and declining sales in Europe and North America. Future profitability depends on how well supply and demand match up.