Over the past decade interest in gas-to-liquids (GTL) technology within the oil and gas industry has been on the rise. Depending on the level of cost reductions obtained, this technology has the potential to create a significant change in the oil and gas industry. In an effort to consider these changes, this paper will address the following issues: Can GTL technology redefine the energy industry’s present structure and give rise to a broad range of new competitors and/or products? If so, how and when is it likely to happen? Our answer to the first part of the question is, simply, yes. GTL technology certainly has the potential. However, the depth and breadth and timing of GTL’s penetration into the industry will be driven by forces of cost, price and environmental regulations. The depth of penetration depends on the answers to the following questions: Can GTL plants be built for US$25,000/bpd or less? What impact will scale and learning curve have on cost reductions? What premium will the consumer market give for GTL products? Is the peak production for conventional oil production on the horizon? If the development of the LNG industry is representative of the potential growth in the GTL industry, we could project a GTL production rate of 1,000,000 bpd in 2025, or about 1.3% of the world’s current production rate.