IS GAS MOVING TOWARDS A GOLDEN ERA?

Is gas entering a “golden era?” This was the question that the International Energy Agency (IEA) attempted to answer in its new special report on the increasing importance of natural gas in the global energy mix. The International Energy Agency’s chief economist, Fatih Birol, who presented the special report today at ENI’s headquarters in Rome, summarised expectations as follows. “If the gas industry plays its cards well, gas will experience growth and by 2035 should become 25% of the global energy mix.”

Among the factors favourable to the success of gas, Birol listed the growth of non-conventional forms of gas (methane, shale gas), that could have an effect over the medium-term; China’s objectives including an increased use of gas in its five-year plan and, finally, the decommissioning of nuclear power plants in many countries, which clearly encourages the search for other energy sources. Among the consequences of the gas boom for other energy sources, explained the IEA’s chief economist, the main ones would be a fall in the use of oil, slow de-carbonization, and, envisaging that current commitments remain stable, a slower growth of renewable. As far as supply is concerned, Birol specified that there are no worries over gas, “with at least 250 years of gas production ahead of us to meet our needs.” Regards to gas’ contribution to the battle against climate change, Birol was less enthusiastic, stating that gas is an excellent solution for reducing pollution, but, should it really be the energy source of the future, this would mean greater demand for energy and, consequently, a rise in polluting emissions. This, said Birol, “is bad news in the fight to oppose CO2 emissions.” However, considering there is less and less coal and that renewable energy sources are still a problem due to costs, gas “is lucky,” added Birol.

The presentation of the report was also attended by ENI’s CEO Paolo Scaroni and the Under Secretary for Economic Development, Stefano Saglia. Scaroni confirmed the rising importance of gas within the global energy scenario and spoke also of the Libyan issue. "There is still the problem pose by Libya, and we all have rather confused ideas on this subject and no one can predict what will happen,” said Scaroni, adding that “we have the capability to compensate the lack of Libyan gas, although we cannot afford to have any other problems with supply. We receive about 10 billion cubic metres of gas from Libya, which amounts to 13-14% of Italy’s consumption. We can face this shortage, but only this one. We can manage one problem, but could not manage a second one.” According to ENI’s CEO, it is also necessary to integrate the gas networks in Europe, “Europe is doing nothing to solve the simplest problem, the integration of the gas network,” he explained. Thus, “we have terrible bottlenecks. Nothing is being done to allow Spanish gas, for example, to be taken to Poland or to take the gas arriving in Italy to Bulgaria. All this makes supply security very risky.”