The International Energy Agency appears to have bowed to threats from the U.S. to pull its funding if the agency didn’t realign its forecasting toward unbiased, policy-neutral projections.
In the middle of the COP30 United Nations Climate Change Conference last month, the agency released its annual “World Energy Outlook.” Unlike previous iterations, the report doesn’t base its forecasts of future oil demand on scenarios that assume nations’ commitments to net-zero emissions by 2050 will be met.
As a result of the change in forecasting, the agency no longer predicts “peak oil,” a century-old theory that the world will stop using petroleum because either it runs out or transitions to other technologies.
Whereas previous releases of the “World Energy Outlook” predicted a rapid transition to non-fossil fuel energy sources would result in a peak demand for oil in 2030, the latest version now predicts oil and gas demand could grow through 2050.
“Looking at the world as it is, and then making baseline projections from there, is probably a much better starting point than…assuming perfect compliance to global treaties,” Alex Stevens, manager of policy and communications for the Institute for Energy Research, told Just the News.
‘Energy transition cheerleader’
Last year, Sen. John Barrasso, R-Wyoming, produced a report accusing the IEA of failing to provide “balanced assessments of energy outcomes” in favor of being an “energy transition cheerleader.” The IEA, according to the report, uses extremely ambitious decarbonization scenarios in its modeling.
In July, Bloomberg reported that Energy Secretary Chris Wright was in discussions with Fatih Birol, the IEA’s executive director, warning that if the agency didn’t reform its practices, the U.S. would withdraw. According to Reuters, the U.S. provides one-fourth of the agency’s funding.
The goal of net-zero emissions by 2050 came out of the 2015 Paris Agreement, a pact signed by 200 countries to lower their emissions. This would, according to the agreement, hold rising global temperatures to 1.5 degrees Celsius above pre-industrial levels.
While the IEA previously assumed that the signing nations would meet those goals, the data never showed that any industrialized country was on track to meet those agreements.
As Dr. Roger Pielke Jr., senior fellow at the American Enterprise Institute, explains on his “The Honest Broker” Substack, the nations of the world are decarbonizing at an average rate of about 1.6% per year. To reach net-zero by 2050, that rate would need to exceed 8%.
Wider mandate
The concern critics have with bias in the agency’s projections isn’t ideological. These forecasts have far-reaching implications for energy markets and energy policy.