The Paris-based International Energy Agency (IEA) warned (November 9) that long-term gas supplies will become increasingly unaffordable under oil-linked supply agreements.

The IEA's World Energy Outlook 2011, jointly presented with the UN Economic Commission for Europe (UNECE) in Geneva, provides comprehensive quantitative analysis of energy trends for the next 25 years broken down by country, fuel, and considered under different policy case scenarios. IEA Chief Economist Fatih Birol said the findings indicate a one-third increase in energy consumption and a 20% rise in energy-driven CO2 emissions between 2010 and 2035 if governments continue to be cautious about honoring environmental commitments.

Evidence of faltering promises has been most evident in the EU which is entangled in deep fiscal and monetary issues. High budget deficits also put a significant strain on public financing, including subsidies for green energy sources while the impact of the global financial crisis has significantly affected the willingness of nations to increase the share of renewables in their energy mix. 

According to the report, the devastating Fukushima nuclear event has raised questions about the future of nuclear energy. The anti-nuclear debates in France and Germany indicate a possible nuclear-free future for the OECD region, a scenario that carries a number of negative consequences in terms of energy security. A lower nuclear share in the energy mix translates into less diversification and a higher demand for fossil fuels with a likely consequence being an upward pressure on energy prices. 

In any case, IEA predicts that prices will rise under all possible scenarios. Specifically, the rising demand for unconventional gas (tight gas, shale gas, and coaled methane) will remain a driving factor in the development of new technologies needed for efficient extractions.  According to Birol, “the golden age of natural gas is upon us", and Russia will remain its key global producer, followed by China, Qatar, the US and Australia. But one caveat is also clear, he said: “golden standards need to be applied to the extraction technologies” in order to avoid further environmental degradation. 

(Photo © DR)