According to the IEA, oil and gas combined will account for more than half of all global energy consumption by 2040. Oil will remain the largest source of energy accounting for around 27% of global needs, and gas will become the second largest at 25% over the coming 20 years.
The IEA's Outlook, which is the organisation's flagship research publication, is based on a "New Policies Scenario" which builds forecasts taking into account current and incoming legislation and government policy that includes Paris Agreement targets and emissions reduction.
Gas will overtake coal by within the next 10 years as global emissions reduction targets come into effect and nations seek to cut coal use for energy generation and instead opt for gas. The biggest rise will be seen in the LNG sector where Australia, Qatar and US are fighting for top place as the world's biggest producer and exporter.
India, China, Africa and the Middle East are the main centres of gas demand growth to 2040, with demand increasing by 200%, 185%, 112%and 58% respectively.
To meet demand more than 100 billion cubic metres of LNG liquefaction capacity is currently under construction, and new investment decisions and infrastructure is expected to continue.
Upstream activities and production of gas is forecast to increase by 44% to 5.4 trillion cubic metres, which will account for over a quarter of global energy demand by 2040.
The IEA estimates US$8.4 trillion of investment is needed in global gas supply to 2040 to ensure secure and reliable supply.
It is largely government policy that underpins the new shift from coal to gas in the energy sector, and under current and planned government policies energy demand world-wide is set to grow by 25% in 2040 - requiring more than US$2 Trillion a year in investment ion new energy supply.
Constructive proactive policy decisions will need to be made quickly to ensure an economically and climate-responsible future, according to the IEA.
"Our analysis shows that over 70% of global energy investments will be government-driven and as such the message is clear - the world's energy destiny lies with government decisions," IEA executive director Fatih Birol said.
"Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centres, and expanding basic access to energy in Africa and elsewhere."
In a major upset for the fossil fuel industry, under the IEA's sustainable development prediction, approximately 40% of the world's energy mix will need to come from wind and solar renewables within the next 20 years, while other renewables including hydro and biomass would account for around a further 20%.
"In power markets, renewables have become the technology of choice, making up almost two-thirds of global capacity additions to 2040, thanks to falling costs and supportive government policies.
"This is transforming the global power mix, with the share of renewables in generation rising to over 40% by 2040, from 25% today, even though coal [currently] remains the largest source and gas remains the second-largest," the report said.
