PARIS (Commodity Online) : Natural gas is going to become a leading source of energy as it has entered a golden age scenario at the moment, said International Energy Agency. In a report titled Are We Entering a Golden Age of Gas?”, the IEA said it believes natural gas is entering a "golden age" scenario, a period which will see its use account for more than a quarter of global energy by 2035, the organization predicts. Global natural-gas use may rise more than 50 percent by 2035 from last year to overtake coal as the second-most used fuel, the International Energy Agency said. The IEA's forecast assumes a more ambitious natural gas-use policy in China, nuclear power's decreased global use in light of the Japan earthquakes, and greater production of unconventional natural gas. The report warned that increased reliance on natural gas could negatively affect long-term CO2 emissions because where it replaces demand for other fossil fuels, it also replaces demand for nuclear. "[W]hile natural gas is the 'cleanest' fossil fuel, it is still a fossil fuel. Its increased use could muscle out low-carbon fuels, such as renewables and nuclear - particularly in the wake of the incident at Fukushima and the likelihood of a reduced role for nuclear in some countries," said Nobuo Tanaka, IEA's executive director. "An expansion of gas use alone is no panacea for climate change." The "golden age" scenario calls for China's natural gas demand, which is currently equal to that of Germany, to grow beyond the entire European Union's demand by 2035.The IEA also said it expects global natural gas demand. While a surge in gas use will improve air quality in many cities, cut coal use and lower energy costs, climate-change targets would be missed and temperatures would rise beyond a goal of 2 degrees Celsius (3.6 Fahrenheit), the Paris-based organization said in the report. The new assumptions for increased gas use are based on growing demand for the fuel in China, slowing growth of nuclear power, increased production of gas from so-called unconventional sources including shale, lower gas prices and rising use in transport, the IEA said. Unconventional gas would account for 40 percent of the 1.8 trillion-cubic-meter gain in consumption. Gas will overtake coal as the most popular fuel after oil, with its share of the energy mix climbing to 25 percent from 21 percent, according to the IEA. The IEA cut its price outlook by about 20 percent from last year due to the greater availability of gas from shale and other deposits. Gas prices are now about $1.50 to $2.50 a million British thermal units lower than in the IEA’s base case. Natural gas for July delivery rose 10.1 cents, or 2.2 percent, to $4.808 per million British thermal units at 9:57 a.m. on the New York Mercantile Exchange. The futures have climbed 9.2 percent this year.

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