Gas could make up 25% of global energy mix by 2035: IEA
London (Platts)--6Jun2011/729 am EDT/1129 GMT
Natural gas use could overtake coal and rival oil to account for more
than a quarter of global energy demand by 2035, supported by booming shale
gas output and a weakened appetite for nuclear power, the International
Energy Association said Monday.
In a new report, the IEA concludes that gas use may rise more than 50%
to 5.1 trillion cubic meters by 2035 from 2010 under a "high gas scenario"
with ample supplies and robust demand from China and other emerging markets.
The new estimate represents a 2% average annually growth rate and is
13%, or 600 Bcm, higher than the IEA's previous benchmark scenario for gas
demand published in late 2010.
"We have seen remarkable developments in natural gas markets in recent
months," IEA Executive Director Nobuo Tanaka said speaking at the launch of
the report in London.
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"There is a strong potential for gas to take on a larger role, but also
for the global gas market to become more diversified and therefore improve
energy security," he said.
The report -- 'Are We Entering a Golden Age of Gas?' -- illustrates
increasing uncertainty about nuclear power in the wake of Japan's Fukushima
disaster and points to a more prominent role for gas in the global energy mix.
Gas use grows at the expense of oil, coal and nuclear under the new
scenario, with gas overtaking coal to become the world's second biggest
energy source by 2030.
Five year later, gas consumption would stand just 2 percentage points
lower than oil at 27% of the energy mix, the study concludes.
Non-OECD countries would account for 80% of the demand growth for gas to
2035, with China making up nearly 30% of the total to rival the EU's total
gas consumption, the IEA said.
Gas demand is expected to grow through China's implementation of an
ambitious gas use policy and lower growth of nuclear power and an expected
growth in vehicles fueled by compressed natural liquids.
To meet China's growth in demand by 2035, annual gas production must
increase by 1.8 trillion cu m, which represents about three times the current
production of Russia, the IEA said.
The IEA was upbeat, however, on the global supply potential to meet
demand, estimating that the world's recoverable gas resources could last over
250 years at current consumption.
The IEA said more than 40% of the increase in demand will come from
unconventional gas sources, such as shale gas or coal bed methane projects.
Although unconventional gas resources are now estimated to be as large
as conventional capacity, uncertainty persists over its production outlook
due to environmental and safety concerns raised by hydraulic fracturing, or
The IEA believes, however, that if "best practice" production values are
adhered to, unconventional gas could have 3.5% higher well-to-burner
emissions than conventional gas.
Despite concerns over shale gas technologies, the IEA concludes that
unconventional gas can be produced in "plentiful volumes" at cost similar to
current US levels of around $3-7 per million Btu.
A large scale ramp up in unconventional gas outside the US, however,
would likely require tighter regulations and operating practices adding to
production cost, the IEA's chief economist Fatih Birol said.
"We do not think that the increased costs will be a deal breaker," Birol
While gas prices in the US and Europe are likely to continue benefiting
from existing weak demand and booming supply in the short term, the current
glut will likely dry up by 2015 supporting gas prices further out, the IEA
The IEA also warned that lower gas prices could push out renewables, if
governments come under pressure to reduce renewables subsidies and opt for
gas as an alternative.
Tanaka added that "while natural gas is the cleanest fossil fuel, it is
still a fossil fuel. Its increased use could muscle out low-carbon fuels,
such as renewables and nuclear -- particularly in the wake of the incident at
Fukushima and the likelihood of a reduced role for nuclear in some
countries," he said.
Although increased use of natural gas can result in lower emissions of
greenhouse gases and local pollutants, the report found that within the
"golden age scenario" carbon emissions would still be consistent with a
long-term temperature rise of over 3.5 degrees Celsius.
At such a level, scientists warn that global warming could run out of
control, with major disruption to the global ecosystem and rises in sea
A greater shift to low-carbon energy sources, increased energy
efficiency and deployment of new technologies including carbon capture and
storage would still be required to limit temperature rises to 2 C, said the
"An expansion of gas use alone is no panacea for climate change," Tanaka
'Are We Entering a Golden Age of Gas?' is taken from the IEA's annual
World Energy Outlook 2011 due to be published November 9.
--Robert Perkins, firstname.lastname@example.org
--Jillian Ambrose, email@example.com