* Indebted governments seen likely to switch to gas
* IEA says new supplies will pressure gas prices lower
By Emma Farge
BERNE, Sept 13 A new "golden age of gas" could
derail global efforts to fight climate change as indebted
governments mull a switch to the cheaper fuel, the International
Energy Agency's chief economist said on Thursday.
Government subsidies designed to promote renewable energy
currently amount to around $70 billion globally, he said.
But governments may be tempted to drop them as new shale gas
and export facilities of liquefied natural gas (LNG) in east
Africa and Australia pressure prices lower.
"Governments are feeling more and more uncomfortable to put
m oney in renewables especially in the days of austerity, and
some governments are cutting their support," Fatih Birol from
the West's energy watchdog said at an energy conference in
"The availability of cheap or lower gas prices are putting
additional pressure on renewable energies," he added.
Currently, natural gas prices of many exporters such as
Russia, Norway and Qatar are high because they are sold under
long-term contracts that are linked to oil, but suppliers are
coming under increasing pressure by customers to reduce prices
or allow more flexible pricing based on movements in the freely
traded spot gas markets.
But Birol said that new supplies will undermine their
ability to charge high prices in the long term.
In North America, a boom in unconventional shale gas
exploration has led to sharp drops in domestic natural gas
prices and the U.S. is expected to begin exporting LNG by 2015,
putting pressure on global gas prices and established pipeline
suppliers such as Russia's Gazprom and Norway's
"You will see more and more, even in Europe, gas available
outside of major current gas exporters which can put downward
pressure on prices and give more flexibility on importers to
negotiate long-term contracts," he later told Reuters.
Other analysts, however, say that shale gas exploration in
Europe will not be big enough to break the dominance of
established pipeline suppliers, and that the development of
renewables will therefore remain important in order to meet
energy demand and Europe's emmissions reduction targets.
Birol said that any reduction in investment in renewable
energy would increase the risk of an increase in global
temperatures by 6 degree Celsius this century, describing the
current trend as "catastrophic".
"If there are no urgent and bold policies put in place the
door to a 2 degrees trajectory, the door to a normal life for us
and for our children, will be closed and will be closed
forever," he said.
The IEA has already said that global emissions hit a record
in 2011, and that carbon emissions from countries switching from
nuclear to other conventional power generation technologies such
as gas or coal are likely to rise
"You are wrong if you believe all this nuclear will be 100
percent replaced by renewable energy," he told the conference.
(Additional reporting by Henning Gloystein in London, editing
by William Hardy)