This week, leaders in the energy sector, including ministers of energy, oil executives, and green investors, convened to commemorate the International Energy Agency’s founding 50 years ago and evaluate its evolving function as a global guide guiding the transition from fossil fuels to renewable energy.

Some in attendance feel that the energy watchdog of the industrialised world has compromised its impartiality by shifting its focus from traditional oil and gas supply security to renewable energy and climate action.

The green shift is in line with the U.S., the agency’s largest financial supporter, on climate change.

However, several analysts, as well as prominent members of OPEC+, have questioned the IEA’s recent policy recommendations and its interpretation of the data it gathers from its 31 member nations regarding the oil market.

This came about as a result of a contentious 2021 IEA study in which the organisation stated that if the world was serious about meeting its climate commitments, no money should be invested in new projects including oil, gas, or coal.

Over the course of two days, crammed into the old Chateau de la Muette in Paris, where Marie Antoinette once freely strolled among her people, several guests praised Fatih Birol, the architect behind the IEA’s green pivot.

“Thanks to the genuinely extraordinary job Fatih has been doing, the IEA is now probably the principal arbiter … with respect to our policies,” said outgoing U.S. Special Presidential Envoy for Climate John Kerry.

The IEA’s agency scenarios currently anticipate that demand for coal, oil, and gas would peak by 2030. Birol, who was previously employed by the Organisation of the Petroleum Exporting Countries, has been leading this revision since his hiring in 2015.

He delivered his message quickly.

Birol urged American shale oil executives crammed into a Houston conference hall in 2017 to “invest, invest, invest” in order to extract 670 billion barrels of additional oil by 2040.
But in 2021, Birol surprised the energy community by declaring, “New investments in coal, gas, and oil cannot begin this year if governments are serious about the climate crisis.”

Birol’s shift in message aligned with the transition of the US government from former President Donald Trump’s pro-fossil fuel policies to President Joe Biden’s climate agenda. Birol and the IEA might come under pressure to alter the message if Trump prevails in this year’s U.S. presidential election from the organization’s leading supporter.

Should Trump win the election in November, he has promised to cut financing to international organisations and increase the production of fossil fuels—moves that the agency views as potentially dangerous.

Any idea that the IEA’s focus would shift if the U.S. government did was openly refuted by Birol.

“The economic and technology dynamics, the policy dynamics are very strong, I believe the clean energy transition will continue to move fast whoever the next president is,” the IEA chief said.

Few governments who are members of the IEA openly hold the belief that the demand for fossil fuels will soon peak, or have taken steps to reduce funding for new projects.
The energy transition and climate ambitions suffered a setback with Russia’s invasion of Ukraine in 2022. To increase output and reduce reliance on Russia, several Western countries have advocated for increased fossil fuel investment rather than decreased spending.
The IEA was established in 1974 with the goal of storing oil supplies to avert future crises. This was done after the Arab oil embargo sent energy prices skyrocketing and thrust several nations into recession.

Fossil fuel consumption and the greenhouse gases they release are now considered to be the global energy issue.

While maintaining their own energy analytic teams, IEA member nations rely on the organization’s recommendations to direct policy. It is problematic, according to some experts, to conflate objective data analysis with recommendations for pro-renewable policies.
John E. Paisie, head of Stratas Advisors LLC in Houston, stated that “IEA forecasts now appear to be too optimistic with respect to how fast the transition away from hydrocarbons can take place.”

“The forecasts, however, are still useful because (they) provide a view of the future that illustrates the potential effect of decarbonization policies.”

Some oil companies, analysts, and OPEC producers disagree with the IEA’s projection that world demand is approaching a peak due to the rapid growth of electric car fleets.
The IEA’s prediction was criticised this week by OPEC Secretary General Haitham Al Ghais, who stated, “Oil and gas will continue to be a major component of the energy pie, that will continue to grow in future years after 2045.”

In 2022, OPEC ceased utilising IEA data for its evaluations of the oil markets.
“We should exit debate about peak oil demand, be serious, and invest,” stated TotalEnergies CEO Patrick Pouyanne before to his departure for the IEA meeting.

In addition to undermining the IEA’s own clean energy initiatives, advocating for a stop to investment in new fossil fuel projects might encourage the use of dirtier fuels in developing nations, according to Brenda Shaffer, senior fellow at the Atlantic Council’s Global Energy Centre.
“If you don’t enable access to fossil fuels, you get dung and wood burning,” she stated. “That’s the reality, and that’s more polluting, more climate-altering and more harmful to human health.”

(Adapted from ThePrint.in)

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