Agency says tripling output by 2035 from unconventional gas sources such as shale gas could end support for renewable

A "golden age of gas" spurred by a tripling of shale gas from fracking and other sources of unconventional gas by 2035 will stop renewable energy in its tracks if governments don't take action, the International Energy Agency has warned.

Gas is now relatively abundant in some regions, thanks to the massive expansion of hydraulic fracturing – fracking – for shale gas, and in some areas the price of the fuel has fallen. The result is a threat to renewable energy, which is by comparison more expensive, in part because the greenhouse gas emissions from fossil fuels are still not taken into account in the price of energy.

Fatih Birol, chief economist for the IEA, said the threat to renewables was plain: "Renewable energy may be the victim of cheap gas prices if governments do not stick to their renewable support schemes."

Maria van der Hoeven, executive director of the IEA, told a conference in London: "Policy measures by governments for renewable energy have to be there for years to come, as it is not always as cost-effective as it could be."

Shale gas fracking – by which dense shale rocks are blasted apart under high pressure jets of water, sand and chemicals in order to release tiny bubbles of methane trapped inside them – was virtually unknown less than ten years ago, but has rapidly become commonplace. In places like the US, the rising price of energy has made such practices economically worthwhile.

On current trends, according to the IEA, the world is set for far more global warming than the 2C that scientists say is the limit of safety, beyond which climate change is likely to become catastrophic and irreversible. "A golden age for gas is not necessarily a golden age for the climate," warned Birol.

The IEA report comes as the Guardian revealed that gas has been rebranded in secret documents as a form of green energy by the EU.

Gas produces only about half of the carbon emissions of coal when burnt, which has led some industry lobbyists to attempt to rebrand it as a "clean" or "low-carbon" fuel. But its effect on the climate is less clear-cut than the direct comparison with coal would suggest.

In the US, gas-fired power stations have taken over in some areas from coal-fired power, reducing the nominal carbon emissions from US power stations. But that does not necessarily equate to a global cut in emissions.

Last year, the consumption of coal in Europe rose by 6%, according to Birol, which was a result of an excess of cheap coal on the market because of less consumption in the US, while the price on carbon emissions under the EU's emissions trading scheme – supposed to discourage coal – was too low to have any effect. That rise in coal consumption will have increased emissions in the EU, though the data has not yet been fully collected.

This example shows that gas can simply displace emissions rather than cut them altogether, according to Birol. "Gas cannot solve climate change – we need renewable energy," he told the Guardian.

Another important factor is the release of methane – natural gas – from shale gas fracking operations. Methane – a greenhouse gas more than 20 times as potent as carbon dioxide in terms of global warming – leaks from fracking sites, and is rarely captured by the gas companies because the technology to capture it costs money and they face no penalty for the leaks. A report by Scottish Widows found that these "fugitive emissions" were enough to offset the global warming benefits of switching from coal to gas-fired power generation.

The IEA, in its publication "Golden Rules for the Golden Age of Gas", said measures to capture leaking gas, to cut water usage and to prevent chemical contamination, must be prerequisites for a further expansion of the exploitation of "unconventional" gas.

Scottish Widows said the technology needed to capture leaking gas would pay for itself, sometimes within less than a year.

Van der Hoeven said gas companies must earn their right to exploit shale gas, by improving their environmental performance. She warned that the adverse environmental impacts of the fuel – fracking requires vast quantities of water, and can result in the contamination of water supplies and the release of harmful chemicals – would have to be taken into account, and that companies would have to clean up their act if they wanted to retain their "social licence to operate".

"If the social and environmental impacts are not addressed properly, there is a very real possibility that public opposition to drilling for shale gas and other types of unconventional gas will halt the unconventional gas revolution in its tracks," she said.

(By Fiona Harvey, Guardian.co.uk, 29/05/2012)