U.S. Energy Secretary Chris Wright warned International Energy Agency (IEA) head Fatih Birol in July that he was considering cancelling America’s membership in and funding of its activities due to its increasingly political nature.
Specifically, Wright pointed to the agency’s modeling methods used to compile its various reports and projections, which the Secretary and many others believe have trended more into the realm of advocacy than fact-based analysis in recent years.
That trend has long been clear and is a direct result of an intentional shift in the IEA’s mission that evolved in the months during and following the COVID pandemic. In 2022, the agency’s board of governors reinforced this changed mission away from the analysis of real energy-related data and policies to one of producing reports to support and “guide countries as they build net-zero emission energy systems to comply with internationally agreed climate goals” consistent with the Paris Climate Agreement of 2016.
One step Birol and his team took to incorporate its new role as cheerleader for an energy transition that isn’t actually happening was to eliminate the “current policies” modeling scenario which had long formed the base case for its periodic projections. That sterile analysis of the facts on the ground was replaced it with a more aspirational set of assumptions based on the announced policy intentions of governments around the world. Using this new method based more on hope and dreams than facts on the ground unsurprisingly led the IEA to begin famously predicting a peak in global oil demand by 2029, something no one else sees coming.
Those projections have helped promote the belief among policymakers and investors that a high percentage of current oil company reserves would wind up becoming stranded assets, thus artificially – and many would contend falsely – deflating the value of their company stocks. This unfounded belief has also helped discourage banks from allocating capital to funding exploration for additional oil reserves that the world will almost certainly require in the decades to come.
Secretary Wright, in his role as leading energy policymaker for an administration more focused on dealing with the realities of America’s energy security needs than the fever dreams of the far-left climate alarm lobby, determined that investing millions of taxpayer dollars in IEA’s advocacy efforts each year was a poor use of his department’s budget. So, in an interview with Bloomberg in July, Wright said, “We will do one of two things: we will reform the way the IEA operates, or we will withdraw,” adding that his “strong preference is to reform it.”
Lo and behold, less than two months later, Javier Blas says in a September 10 Bloomberg op/ed headlined “The Myth of Peak Fossil Fuel Demand is Crumbling,” that the IEA will reincorporate its “current policies” scenario in its upcoming annual report. Blas notes that, “the annual report being prepared by the International Energy Agency… shows the alternative — decades more of robust fossil-fuel use, with oil and gas demand growing over the next 25 years — isn’t just possible but probable.”
On his X account, Blas posted a chart showing that, instead of projecting a “peak” of crude oil demand prior to 2030, IEA’s “current policies” scenario will be more in line with recent projections by both OPEC and ExxonMobil showing crude demand continuing to rise through the year 2050 and beyond.
Whether that is a concession to Secretary Wright’s concerns or to simple reality on the ground is not clear. Regardless, it is without question a clear about-face which hopefully signals a return by the IEA to its original mission to serve as a reliable analyst and producer of fact-based information about the global energy situation.
The global community has no shortage of well-funded advocates for the aspirational goals of the climate alarmist community. If this pending return to reality by the IEA in its upcoming annual report signals an end to its efforts to be included among that crowded field, that will be a win for everyone, regardless of the motivations behind it.
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