IEA WEO 2009: Unconventional gas is "a game changer".

IEA WEO extracts: “World energy demand in aggregate has already plunged with the economic contraction …stimulus packages have included measures to promote clean energy with the aim of tackling an even bigger, and just as real, long- term threat — that of disastrous climate change.” The financial crisis brings a temporary reprieve from rising fossil- energy use: Global energy use is set to fall in 2009 — for the first time since 1981 on any significant scale — as a result of the financial and economic crisis.
Falling energy investment will have far-reaching consequences: ….In the oil and gas sector, most companies have announced cutbacks in capital spending, as well as project delays and cancellations, mainly as a result of lower cash flow. ….Any prolonged downturn in investment threatens to constrain capacity growth in the medium term, particularly for long lead-time projects, eventually risking a shortfall in supply. This could lead to a renewed surge in prices a few years down the line, when demand is likely to be recovering, and become a constraint on global economic growth. These concerns are most acute for oil and electricity supplies. ….The financial crisis has cast a shadow over whether all the energy investment needed to meet growing energy needs can be mobilised. The capital required to meet projected energy demand through to 2030 in the Reference Scenario is huge, amounting in cumulative terms to $26 trillion (in year-2008 dollars)
Current policies put us on an alarming fossil-energy path
Limiting temperature rise to 2°C requires a low-carbon energy revolution
Energy efficiency offers the biggest scope for cutting emissions

New financing mechanisms will be critical to achieving low-carbon growth
Natural gas will play a key role whatever the policy landscape
Gas resources are huge but exploiting them will be challenging
The world’s remaining resources of natural gas are easily large enough to cover any conceivable rate of increase in demand through to 2030 and well beyond, though the cost of developing new resources is set to rise over the long term. Proven gas reserves at the end of 2008 totalled more than 180 tcm globally — equal to about 60 years of production at current rates. Over half of these reserves are located in just three countries: Russia, Iran and Qatar. ….Unconventional gas resources — mainly coalbed methane, tight gas (from low-permeability reservoirs) and shale gas — make up about 45% of this total. To date, only 66 tcm of gas has been produced (or flared).
The non-OECD countries as a whole are projected to account for almost all of the projected increase in global natural gas production between 2007 and 2030. The Middle East sees the biggest increase in output (and in exports) in absolute terms: ….Iran and Qatar account for much of the growth in output.
The rate of decline in production from existing gas fields is the prime factor determining the amount of new capacity and investment needed to meet projected demand. A detailed, field-by-field analysis of the historical gas-production trends of nearly 600 fields (accounting for 55% of global production) indicates that close to half of the world’s existing production capacity will need to be replaced by 2030 as a result of depletion. This is the equivalent of twice current Russian production. ….The observed average post-peak decline rate of the world’s largest gas fields, weighted by production, is 5.3%. Based on these figures and estimates of the size and age distribution of gas fields worldwide, the global production-weighted decline rate is 7.5% for all fields beyond their peak — a similar rate to oilfields.
Unconventional gas changes the game in North America and elsewhere
The recent rapid development of unconventional gas resources in the United States and Canada, particularly in the last three years, has transformed the gas-market outlook, both in North America and in other parts of the world. New technology, especially horizontal-well drilling combined with hydraulic fracturing, has increased productivity per well from unconventional sources — notably shale gas —
….The extent to which the boom in unconventional gas production in North America can be replicated in other parts of the world endowed with such resources remains highly uncertain. Outside North America, unconventional resources have not yet been appraised in detail and gas production is still small.
….The share of unconventional gas in total US gas production rises from over 50% in 2008 to nearly 60% in 2030.
A glut of gas is looming
The unexpected boom in North American unconventional gas production, together with the current recession’s depressive impact on demand, is expected to contribute to an acute glut of gas supply in the next few years.
Turning promises into results
The upcoming UN Climate Change Conference in Copenhagen will provide important pointers to the kind of energy future that awaits us. Whatever the outcome, implementation of the commitments that are made — then or later — will remain key. The road from Copenhagen will undoubtedly be as bumpy as the road leading up to it. It will need to be paved with more than good intentions. The IEA has already called on all countries to take action on a large scale — a Clean Energy New Deal — to exploit the opportunity the financial and economic crisis presents to effect the permanent shift in investment to low-carbon technologies that will be required to curb the growth of energy-related greenhouse-gas emissions. Recent initiatives by a number of countries within the framework of economic stimulus packages are an important step in this direction. But much more needs to be done to get anywhere near an emissions path consistent with stabilisation of the concentration of greenhouse gases in the atmosphere at 450 ppm and limiting the rise in global temperature to 2°C
A critical ingredient in the success of efforts to prevent climate change will be the speed with which governments act on their commitments. Saving the planet cannot wait. For every year that passes, the window for action on emissions over a given period becomes narrower — and the costs of transforming the energy sector increase. We calculate that each year of delay before moving onto the emissions path consistent with a 2°C temperature increase would add approximately $500 billion to the global incremental investment cost of $10.5 trillion for the period 2010-2030. A delay of just a few years would probably render that goal completely out of reach. If this were the case, the additional adaptation costs would be many times this figure. Countries attending the UN Climate Change Conference must not lose sight of this. The time has come to make the hard choices needed to turn promises into action.
Press release: “The time has come to make the hard choices needed to combat climate change and enhance global energy security, says the latest IEA World Energy Outlook ….said Nobuo Tanaka, Executive Director of the International Energy Agency today in London at the launch of the new WEO. (It) provides both a caution and grounds for optimism. Caution, because a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security. Optimism, because there are cost effective solutions.”