The shale revolution has demolished market assumptions about natural gas and instituted a new world order, which eventually could allow the “Prince of Hydrocarbons” to inherit the kingdom, according to a report unveiled Wednesday.

“Energy Vision 2011: A New Era for Gas” found that because of technological advances in unconventional gas production and transportation, coupled with a growing liquefied natural gas (LNG) trade, new opportunities, as well as new challenges, are emerging for the fuel worldwide.

IHS Cambridge Energy Research Associates (IHS CERA) and the World Economic Forum (WEF) compiled the report using contributions from experts in the gas industry, as well as government and nongovernmental organizations. The report was issued at CERAWeek 2011 in Houston.

Gas now provides around one-quarter of all global energy needs but refined drilling technologies, specifically for hydraulic fracturing operations and horizontal drilling, have almost doubled estimates for world gas reserves.

“Natural gas, proudly labeled ‘the Prince of Hydrocarbons,’ may be about to inherit its kingdom,” said Simon Blakley, who contributed to the report as a Eurogas special envoy. “Gas is likely to be the main means of reducing the carbon footprint of mankind’s energy use in the coming years.”

Shale gas “has essentially made the U.S. an island market,” said IHS CERA’s Samantha Gross, who directs integrated research and helped to write the report.

The political backlash in North America from hydraulic fracturing processes, which is now moving overseas, isn’t specifically addressed in the report. However, risks in finding new energy resources are similar to those faced by earlier generations, the authors noted.

“The unconventional gas revolution is the most important energy development so far this century and it has the potential to boost gas production far beyond North America,” said IHS CERA Chairman Dan Yergin. “The resulting changes to the supply outlook and fundamental economics of natural gas will be transformative.

“They can have far-reaching impact on the electric power industry and the fuel choices in the years ahead. Understanding what this may mean is a top-level topic for the energy industry worldwide.”

Because of the emergence of shale gas, North America has sufficient recoverable gas to meet current levels of consumption for “well over” 100 years, said Yergin. The global LNG trade doubled in the decade from 2000 to 2010 and is expected to increase another 50% or more in the next 10 years.

Advances in technology mean that gas likely will be “more available and less expensive” than only a few years ago.

The North American “shale gale” served to “slow if not reverse the move toward the convergence of prices and a truly global gas market,” according to the report. “North America also is less dependent on LNG than was projected only three years ago, which has disconnected the market from gas prices elsewhere.”

Outside of North America, gas is being embraced as a way to ensure energy security.

“In the context of a world with increasing demand for energy, gas is playing a critical role,” said WEF’s Roberto Bocca, head of energy. “It is particularly attractive for power generation as a relatively cheaper and cleaner source of energy.

“With many policy discussions today focusing on emissions and carbon reduction, natural gas represents an opportunity for progress, since a modern natural gas plant can produce electricity with half the greenhouse gas emissions of an older coal-fired plant.”

Elsewhere, however, the switch to gas won’t be quick, according to the authors. For example, using gas as a power source would reduce carbon emissions but not lead to zero emissions, which is a goal of the European Union.

“The primary uses for gas are expected to remain the same — space and water heating in residential and commercial applications, fuel and feedstock for industrial applications and power generation,” the report noted. In the United States and other member countries of the Organisation for Economic Cooperation and Development, or OECD, where there are “mature gas distribution networks, the most robust growth is expected to come from power generation.”

LNG demand is growing in Asia, which “brings increasing interconnectedness between Asian and European gas markets,” noted Yergin. “But with a mostly self-sufficient North American gas market, one should expect an interregional, rather than a global, market.”

Long-standing tenets of the world’s gas markets, especially in Europe, were challenged as the gas supply surged during the global recession, noted the authors.

“The traditional linking of gas prices to oil in Europe, though likely here to stay, is nonetheless evolving as long-standing gas suppliers are offering more flexibility in contract terms and pricing to compete with growing volumes of LNG,” the report said.

Despite the “revolution in supply, the demand outlook for gas is more evolutionary,” the report noted.

“Natural gas use in power generation, in particular, will be the main source of demand growth in the future,” the report says. “Natural gas is the cleanest of the fossil fuels, emitting the least greenhouse gas emissions and other pollutants than coal or oil, making it a preferred fossil fuel given the imperative to reduce emissions.”

In addition to Blakley, contributors to the report included Total CEO Christophe de Margerie, Gazprom Deputy Chairman Alexander Medvedev, GDF Suez Chairman Gerard Mestrallet, Eni SpA CEO Paolo Scaroni and Royal Dutch Shell plc CEO Peter Voser.