Report says global gas use will rise, as will prices

FAIRFAX, Va., March 30 (UPI) -- Global gas use is rising and prices are set to follow, as international perception of the fossil fuels' natural offspring as a "clean" energy leads to elevation of the resource's status.

Natural gas has been tipped as a major component of future global energy demand and supply by even the major oil producers, particularly because not all gas is associated with crude oil reserves.

Unlike crude oil, natural gas been spared the worst of criticism heaped on hydrocarbon sources for energy, amid rising sensitivity to possible causes of climate change, because gas is seen likely to take over some of the demand now met by crude oil.

A new global energy outlook published Tuesday by ICF International consulting company said gas demand was set to rise worldwide and higher consumption would likely lead to higher prices.

ICF International said the increase in gas use would occur alongside greater investment going into development of renewable energy sources such as solar power, geothermal and wave energy and biofuels.

The report said, "The unprecedented energy price volatility of the past two years, coupled with ongoing climate regulatory uncertainty, has undermined executive confidence in the traditional views of energy markets."

Because of unstable commodity prices, overall price volatility and looming environmental regulations, uncertainty has become the norm in the energy industry, the company said.

ICF International said it used proprietary analytical tools to examine wholesale power, transmission, fuel and emissions markets.

"The only study of its kind, the Integrated Energy Outlook provides big-picture guidance and market-specific projections and forecasts," ICF International said.

John Blaney, senior vice president for ICF International, said the document "provides decision makers with the strong analytical narrative needed to make sense of today's fragmenting energy landscape."

The report said that robust growth in gas demand will apply upward pressure to gas prices over time.

At the same time, a significant shift to renewable energy sources, gas and nuclear capacity will be driven by expected carbon legislation, which will dramatically affect bottom-line generation costs, said the report.

Coal pricing and production are expected to decline over the next 20 years but that largely depends on carbon policies and legislation, it added.

ICF International, which has headquarters in Fairfax, Va., employs 3,500 people to serve government and corporate clients worldwide.

The ICF International report coincided with the announcement of a major gas find in Venezuela and talks in Cancun, Mexico, on current and future energy outlook.

Venezuelan President Hugo Chavez said a "super well" drilled in an offshore field holds almost twice as much natural gas as originally estimated -- 14 trillion cubic feet against 8 trillion cubic feet.

He didn't identity the gas deposit and industry confirmation of the find wasn't immediately available.

"We have drilled tens of wells in the Caribbean and recently discovered a super well," Chavez said from Ecuador, where he met with President Rafael Correa.

In September 2009, Repsol YPF S.A. reported a 7.7 trillion cubic feet find of natural gas in the Gulf of Venezuela. OAO Gazprom also reported "significant quantities" of gas in a nearby field.