The International Energy Agency, a Paris-based intergovernmental organization that regularly publishes energy research and outlooks, was in the news again the other week. “No new oil, coal projects needed as fossil fuel demand to peak this decade” blared the headlines from here, there and everywhere. The report concluded that demand for natural gas would also peak this decade.
Ah, the poor old IEA. The world’s energy kicking post. They just can’t win.
They do try. This latest headline is the organization shouting from the rooftops: “We get it! We are not bad guys! Stop yelling at us! We will prophesy what we’re supposed to!”
New IEA headlines invite a stroll down memory lane. A few decades ago, while trying to understand the bigger global energy scene, I began following their output and in 2008 actually plunked down several hundred dollars of hard earned money for the IEA 2008 World Energy Outlook, because the world was so uncertain at the time. The global financial crisis was happening, peak oil was the topic of many energy conversations, and the heat was on the IEA already to do something about climate change.
I still have the book on my shelf, an odd time capsule that illustrates the challenges of trying to forecast with significant precision (Page 49: “…it is becoming increasingly apparent that the era of cheap oil is over.” The shale revolution was about to begin…Doh!). It is also a great reminder to keep context in mind when considering decisions made.
It’s hard to forecast anything long-term and concrete about energy, because it is an incredibly dynamic field, the world keeps growing, demand keeps growing, and big macro events happen that buffet both supply and demand in unexpected ways.
Then the IEA attracted the attention of one Mr. Bill McKibben, one of the world’s fiercest and most effective climate activists. He had a large hand in killing Keystone XL through his global org 350.org and other well funded channels. McKibben accused the IEA of saying the wrong things which “became self fulfilling prophecies”. (If you’re not familiar with McKibben, here is some relevant background: McKibben is a lifelong activist against business, capitalism, and anything vaguely construed as right of centre, far before he was a climate hawk. An interesting analysis of his career quotes him as being “furious that he wasn’t allowed to be arrested with his father” when he was 10 years old. He attended Harvard where he was tear gassed while demonstrating against nuclear energy. In the modern era, McKibben’s position on energy is: “… the fight to slow carbon emissions is so desperate that it’s wrong to rule anything out.” Chilling words indeed, literally so for those whose natural gas/coal fired power plants he is having shut down while still desperately needed.)
McKibben accused the IEA of creating “self-fulfilling prophecies” by pointing out how much oil the world consumes and then indicating the total would grow. One could ponder the merits of the argument that nations consumed oil at accelerated rates because the IEA told them it was going to happen, but the truth, as one might suspect, appears to be a considerable distance from that line of thought. For example, in 2008 the IEA said that one easy route to cutting fossil fuel consumption was to remove fossil fuel consumption subsidies, which they calculated at some $300 billion per year globally. But then Europe, stung with potential shortages – and corresponding spiking prices – spent over $300 billion alone in 2022 on consumption subsidies, and the world spent about $1 trillion. In one year. That’s what happens when citizens are facing outrageous utility bills; governments very quickly throw pledges out the window and start throwing buns to the masses.
(The IEA also received criticism for the 2008 WEO from the academic world. A Guardian article (here via Wikipedia) quoted a ‘team of scientists’ from Uppsala University in Sweden as voicing displeasure that the IEA would forecast 2030 oil consumption of 105 million barrels per day when their peer-reviewed report (it was necessary to qualify it as such, apparently) showed that by 2030 global oil consumption would not exceed 75 million b/d. Current estimates have 2023 consumption at over 102 million b/d, and rising next year as well, and the peer-stamped Swedish academics’ oil consumption claims appear to be nothing more than peer-reviewed wishful thinking.)
At any rate, tired of being accused of creating political documents that drew the ire of the climate movement, the IEA began creating political documents that drew praise. They began writing reports that were welcomed by the media, rather than being shunned. Everyone likes to be popular; the IEA decided to wear Nike instead of grandpa shoes.
The 2008 WEO included several climate action scenarios based on CO2 parts per million, a measure no longer in style, but like ferociously pointed men’s shoes it was the style of the day. The messaging those scenarios were wrapped in seems jarring in context to today’s theatrics. WEO 2008 raised flags that global energy investment was falling woefully short – P39: “The Reference Scenario projections call for cumulative investment of over $26 trillion in 2007-30…” Nothing startling there except the punch line: of this amount, “The power sector accounts for $13.6 trillion…most of the rest goes to oil and gas.” Yikes, no one talks like that anymore.
The numbers thrown around back then are almost quaint. 2008 WEO states that non-oil & gas investments from 2007-2030 would total – to meet the 450 ppm CO2/2 degrees C warming goal – about $18 trillion, or about $750 billion per year. The most recent net zero 2050 IEA roadmap has increased the annual spend requirement to $4 trillion per year. As is the case with similar fantasies we often see, the chances of success are not even considered – how will the hundreds of required mines get build? Where? What timeline, given growing regulatory resistance? What about resistance to infrastructure construction, which strikes almost everything these days, in larger and larger parts of the world?
On top of even that, the IEA net zero roadmap notes that, to meet 2050 goals: “almost half the [CO2] reductions come from technologies that are currently at the demonstration or prototype phase.”
Ask anyone slaving away in a lab trying to scale up some technology, to understand how to do it, to understand whether it is even possible (a lot of things are possible in a lab that can’t be scaled up commercially) to bring to market, ask them to put a price tag on widespread adoption of something they don’t even know is possible.
Ask any scientist struggling to make superconductivity or some such technologically distant tech to work in a lab how much it will cost to rewire NYC with the technology. Or even a small town.
A good scientist will laugh in your face. A poor one will submit an estimate to the IEA for the 2024 edition of the roadmap.
The IEA is clearly doing all it can, as a political or at least politicized organization, to show that it is with the times, that it supports global emissions reduction goals, that it will not stand there and say ‘this is all impossible’. Their figures may suggest it, but they’re not going to say it.
But reality keeps popping its head up in a way that must cause prolonged and significant groaning in IEA hallways. Britain just approved one of the largest new oil and gas projects in years, the Rosebank field in the North Sea. Despite cheery reporting to the contrary, India plans to boost coal use by 40 percent in power generation by 2030, and huge coal demand growth from China (whose coal imports are expected to rise from 229 million tonnes in 2022 to 329 this year and to 378 million tonnes next year) led to a ‘flurry of dealmaking at the world’s largest industry conference’ in Indonesia recently. Indian Power Minister Raj Kumar Singh was blunt at the G20 Summit, with respect to coal: “My bottom line is I will not compromise with my growth… Power needs to remain available.” (Two years ago, the IEA said that, in order to meet climate goals, there could be no more new fossil fuel investments beyond 2021. I guess it’s like Google Maps yelling at you to turn left in 450 meters, and when you blow through that intersection it simply recalibrates and starts yelling again. Hell of a way to run an energy system.)
The energy dialogue is so, so draining at this point in history, when it should be the opposite. The breakthroughs in energy of various forms are remarkable, and countless people from both outside and inside the existing energy system are enjoying remarkable success in advancing energy development.
But the media mix supports polarization, antagonism, and villain-seeking. Activists pour fuel on the fire. Quoting Bill McKibben again, and remember he is an activist directly hard-wired to the US government: “We need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization.”
Who is helped by such hyperbole? Is he speaking to India’s Power Minister? To the billions of people that received the trillion dollars’ worth of fossil fuel consumption subsidies last year? Considering that 8 billion people are alive only because of hydrocarbons, by what bizarre standard is it Public Enemy Number One of our survival? Maybe I would understand if I too had wished that I’d been imprisoned at age ten.
Regardless, those people do what they do and there’s no stopping them. So does the IEA. But the IEA task is much harder, and in reading their material closely, that is, beyond the headlines, it can be easily seen that there are many good analysts hard at work trying to paint a picture that they know will spare them from attack, but at the same time needs to be realistic.
It’s so sad and consequential though that the process and messaging are so dangerous. Putting out a blaring headline talking about a Net Zero 2050 roadmap may appease the pundits and McKibben’s of the world, but the fine print about relying on non-existent and/or non-implementable solutions for half the progress is what should be forming the headline.
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