The New Energy Agency ( Iea ) - 2815 Words

The recoverable resource base has been considerably expanded by the development of unconventional gas reserves, most significantly in the United States. The International Energy Agency (IEA) predicts that conventional gas reserves are equal to around 120 years at 2010 levels, and when unconventional gas is added this figure rises to nearly 250 years. The remaining resources of gas can comfortably meet IEA projections of demand beyond at least 2035. The twenty first century has seen the rapid development of shale gas in the United States, which has been made possible by technological breakthroughs that allow considerable volumes of gas to be extracted at a price that competes with conventional gas. These technological breakthroughs†¦show more content†¦Despite the game changing potential to increase the geological resource base, political and economic factors none the less may mean that the shale gas revolution leads to shortages in the future and a perpetuation of past energy consumption patterns. This analysis highlights that the role of shale gas as a game changing resources is uncertain, and any predictions that are made on its future can only be approximate guesses. The shale gas revolution calls into question the peak oil hypothesis, which predicts that the price of finite resource will increase dramatically in the future once oil production reaches a peak. The peak oil hypothesis assumes that on the supply side once fifty percent of total world reserves of petrochemicals are extracted production will peak and then go into rapid and permanent decline. Rising oil prices may stimulate drilling in marginal areas but because ninety percent of the worlds reserves have already been discovered this will do little to increase the ultimately recoverable reserves (URR) of oil. This pessimistic prediction for future oil production is combined with a very optimistic prediction for the future of energy consumption. The geologists are also skeptical of the potential of unconventional gas and oil reserves to replace conventional oil. The economic argument for peak oil has its origins in Jevons’ ‘Coal Question’ (1865) and Hotellingâ €™s ‘The