world energy outlook

The annual World Energy Outlook released by the International Energy Agency shows Australia is positioned to increase gas production by 4.2 per cent a year out to 2035. At that point it will overtake Norway and trail only the US and Canada as the biggest gas producer in the Organisation for Economic Co-operation and Development.

Graeme Bethune, convener of the Australian Institute of Energy's national conference in Adelaide next week, where the IEA paper will be presented, said LNG proponents in Australia would have more trouble advancing projects the longer they waited.

''The projects that are in construction now and have supply contracted have an advantage because others still have to go out into this market and sell it,'' he said.

''That market is going to present a significant increase in production, like about 60 million tonnes a year by the end of the decade, which will triple where we are now.''

The forecast could be taken into account as the market speculates on suitors for Woodside Petroleum in light of Shell's sale of 10 per cent of the company and its plans to offload its remaining 24.27 per cent stake.
Woodside has already had to bat away criticism that some of its projects, such as its Browse or Sunrise joint venture projects, will struggle to meet timelines and may never make it into production.

Woodside's chief Don Voelte claims it has an oversupply of Asian customers wanting its 50 per cent share of the 12 million tonnes of LNG from Browse.

The IEA report says that by 2020 Australia will produce more gas than Malaysia and by 2025 will overtake gas production out of Indonesia.
While gas production is expected to grow quickly - delivering more than 5000 petajoules by 2035 - Australia's coal production will stay relatively stagnant, growing at 0.6 per cent a year.

Nobuo Tanaka, IEA executive director, said government support for renewables would increase from $US57 billion in 2009 to $US205 billion by 2035, under the agency's New Policies Scenario.
A GLOBAL gas glut which could last a decade will act as a ''major barrier'' to the development of renewable energy, cleaner coal plants and nuclear power, according to the International Energy Agency.

''The golden age of gas'' will lead to cheaper prices for consumers, but the agency says it is also likely to result in a rush to build gas-fired power plants at the expense of cleaner forms of electricity generation.

''In terms of climate change, gas is definitely a good solution compared to coal and oil. But it's not very innocent compared to renewables and nuclear,'' said the IEA's chief economist, Faith Birol.

The world faces a gas glut because technical advances have made possible the exploitation of previously untapped shale gas, coal bed methane and other deposits.

There are environmental benefits because cheaper gas-fired plants are more likely to replace old coal plants, which emit twice as much carbon. But gas plants' low costs will make it harder for renewables to compete.