IEA Chief Economist: Natural Gas Could Be the Energy of the Future
BRUSSELS—At a conference on the outlook of the world’s energy future in Brussels on Friday, the International Energy Agency’s (IEA) chief economist of global energy economics, Fatih Birol, said he thought natural gas use would increase substantially in the years to come.
“We expect that natural gas will soon will be number one fuel in the entire energy world,” he said.
The main advantage of natural gas, according to him, is that it is one of the cleanest burning fossil fuels, emitting about half the amount of CO2 as coal and about a quarter less than gasoline. He also cited its flexibility in being traded. Traditionally gas was locked into long-term contracts, but a new trend towards more flexible arrangements means it can be traded where the need is greatest.
“We will see the increasing trade in gas … you can find gas goes from Australia, going from West Africa, East Africa, North America, and other countries, so there will be a more flexible gas market, and this will be good news for the gas security, gas supply, for the entire world,” Birol said.
This is good for Europe’s energy security. Energy experts at the conference all agreed the EU should diversify its imports of gas to not rely on Russia, which supplies the EU with about a third of its oil and natural gas.
“There will be new gas exporting countries coming like Australia, the U.S., Canada, East Africa—this would also give a lot of options to European countries to diversify its import portfolio to much improve energy security, European energy security,” Birol said.
The overall global picture of gas demand, according to International Energy Agency, shows that a big portion of the gas imports will come from China and the Middle East.
A big portion of gas exports will come from the U.S., Australia, and Africa, which will be the main players in the future of the gas market.
Emerging economies around the world require more energy resources every year, and Ereik Waerness, chief economist at Statoil, Scandinavia’s largest energy company, said that energy needs to come from a clean source.
“To provide sufficient energy in a sustainable manner requires that we replace coal with gas. To ensure that we get a lower fossil [fuel] footprint, CO2 footprint, in the global energy mix, we need to provide as much gas as possible to countries that currently use too much coal, particularly in Asia,” he said.
The second solution, according to Waerness, is renewable energy.
Marie Donnelly, director for New and Renewable Sources of Energy at the European Commission said that, while renewables are essential, demand also needs to be reduced.
“Probably the biggest aspect, the biggest contributor to security of energy supply is, in fact, moderation of demand, energy efficiency,” Donnelly said.
And that is the direction Europe is moving. The EU is looking to cut 20 percent of energy consumption through energy efficiency measures by 2020.