In the latest edition of the International Energy Agency’s (IEA) flagship publication, analysis found that the era of fossil fuels appears far from over and underscores the challenge of reaching more ambitious climate goals.
It says natural gas continues to expand its role while the shares of coal and oil fall back.
“We see clear winners for the next 25 years – natural gas but especially wind and solar – replacing the champion of the previous 25 years, coal,” said the IEA’s Executive Director Dr Fatih Birol.
“But there is no single story about the future of global energy: in practice, government policies will determine where we go from here.”
The findings in World Energy Outlook 2016 have been welcomed by the industry in Australia, which is becoming a major player in the global LNG market.
“Far from falling, demand for natural gas is forecast to increase by 50 per cent by 2040, increasing its share of global energy demand from 21 per cent today to 24 per cent,” said Australian Petroleum Production and Exploration Association (APPEA) Chief Executive Dr Malcolm Roberts.
“The IEA also expects LNG exports will eventually overtake pipeline gas as the main form of long-distance trading.
“This is very good news for Australia. Our $200 billion investment in new LNG plants is set to supply a growing global market over the next 25 years.
“Australians will see a steady stream of high-paying jobs, export dollars and revenue for governments for decades to come.”
However, Dr Roberts has called for the governments across Australia to heed the warning of growing energy demand.
“It is vital that governments heed the IEA’s warning that long-term investment in developing new oil and gas reserves is crucial to meet growing demand and replace declining production,” said Dr Roberts.
“In an extremely competitive global market, Australia cannot expect to attract further investment while unjustified political restrictions on gas development remain in place.
Dr Roberts said the COAG Energy Council’s independent review of energy security in the national electricity market must take into account the latest data from the World Energy Outlook.
“Retaining sufficient gas-fired plant to provide for immediate back-up when renewable output falls or demand spikes is essential for reliable energy supply,” said Dr Roberts.
“To support that gas-fired generation, we need to see more development of new gas resources in eastern Australia.
“More gas supply and more gas suppliers will deliver greater energy security, enhance competition and put downward pressures on prices.”