The Paris-based energy policy advisor said there would be enough oil for decades to come but warned that global prosperity and the state of the planet hang on radical change in energy production and usage.

'The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically, socially,' it warned in a summary of its annual World Energy Outlook report.

'But that can - and must - be altered: there's still time to change the road we're on.

'The future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.'

It declared: 'Preventing catastrophic and irreversible damage to the global climate ultimately requires a major decarbonisation of the world energy sources.'

It pointed to huge strides being made in electricity production, and projected that 'modern renewable technologies grow most rapidly, overtaking gas to become the second-largest source of electricity, behind coal, soon after 2010'.

The IEA, the energy monitoring and policy arm of the Organisation for Economic Co-operation and Development, also forecast in an executive summary of a full annual report to be published on Wednesday, that:

- The world will continue to be massively dependent on oil and gas for a long time but there are enough resources to meet rising demand for many years to come;

- Most of the growth in production will come from the Middle East, Africa and Russia and most of the growth in demand and carbon emissions from China, India and the Middle East;

- International oil groups will be increasingly squeezed by national factors; - Huge investment is required in oil and gas production, and in other energies urgently needed to diminish 'shocking' threats to the planet, but national companies may not be able to invest fast enough in oil and gas.

The agency said it expected the price of oil to average 100 dollars a barrel from 2008 to 2015.

But it forecast that in 2030 the price would stand at just above 200 dollars a barrel which, after removal of projected inflation, was equivalent to more than 120 dollars a barrel in real dollar values.

The agency said the figures represented a major upward adjustment from its forecasts last year, owing to a review of the outlook for production costs and demand.

But 'pronounced short-term swings in prices are likely to remain the norm,' it said. 'Prices are likely to remain highly volatile, especially in the next year or two.'

Financial crisis and economic slowdown would probably bear down on demand for oil and on prices, but they were expected to rise steadily after 2015.

Global spending on oil soared from 1.0 per cent of global gross domestic product in 1998 to about 4.0 per cent in 2007, hitting hard at consuming countries. It was expected to stabilise at 5.0 per cent, but for non-OECD countries it would be 6.0-7.0 per cent.

The only comparable period of such high spending was in the early 1980s when it exceeded 6.0 per cent.

'Oil is the world's most vital source of energy and will remain so for many years to come,' the report said. 'The immediate risk to supply is not one of a lack of global resources, but rather a lack of investment where it is needed.'

There is enough oil in the world to feed the expected rise in production beyond 2030. 'The world is not running short of oil or gas just yet,' the IEA reassured.

Estimates of remaining proven reserves of oil and natural gas 'range from about 1.2 to 1.3 trillion barrels' and had almost doubled since 1980. 'This is enough to supply the world for over 40 years at current rates of consumption.'

But the amount of oil discovered rose each year because of increased activity and improved technology. However, there was great uncertainty about the rate at which production would fall from fields as they matured.

The agency said that on its benchmark estimates, world primary energy demand would grow by 1.6 per cent a year from 2006 to 2030, or an overall increase of 45 per cent.

'China and India account for just over half of the increase in world primary energy demand,' in this period.

Middle East demand would account for 11 per cent of the increase, and non-OECD countries 87 per cent, taking their share of total world demand from 51 percent to 62 per cent. -- AFP