An article written by Julien Armijo
Summary
Born the day after the 1Er oil shock and initially focused on the security of oil supplies in Western countries, the IEA has become a global reference with its annual energy report (the World Energy Outlook — WEO). Long perceived as close to fossil interests, and reluctant to transition, since 2020 it has become an emphatic guide to the fight against climate change, with its scenarios of net zero emissions in 2050 - which are attracting new criticism, on the side of fossil interests.
Birth under crisis
The AIE was not created within the framework of the UN and at the end of the Second World War. It was created in November 1974 within the framework of the OECD, initially bringing together the United States and 15 other countries, mainly European, in the wake of the Yom Kippur War and the decision of OPEC to reduce its production by 25% and to impose an oil embargo on countries that supported Israel. The price of a barrel then rises from $4 to $13. The establishment of the IEA is therefore primarily a response from Western countries threatened in their oil supplies.
Primary mission: oil energy security
The main mission of the IEA, created in Paris, is therefore to secure the oil supplies of its member states, by equipping them to anticipate, prevent and possibly deal with shocks to oil supply. In short, it is an intelligence body defending the interests of oil-importing countries, against OPEC. To this end, it maintains databases on all forms of energy and advocates the diversification of energy sources and supply chains. Another major provision, the Agency requires from its member countries, condition Sine qua non to join her, of have a strategic stock equivalent to at least 90 days of net crude oil imports. In the event of a production shock linked to a war or a natural disaster, the IEA can coordinate launches on the oil markets from the strategic stocks of its member countries.
Since its creation in 1974, the IEA has organized only 5 strategic stock releases:
- in 1991 during the Gulf War, 2 Mbps (million barrels per day) - approximately
4% of the global production of the time - have been released
- in 2005 following the severe damage of hurricanes Katrina and Rita on
Texan infrastructures, 2 mbpd have been released for 30 days, or
60 mb in total
- in 2011 during the Libyan crisis, 2 mbpd released for 30 days
- in March and April 2022, following the invasion of Ukraine by Russia, in total 240 mb
were released over a period of 6 months, including 180 mb by the United States alone - for
an overall daily production of 100 mbpd - bringing these volumes to a
scale never reached at that time (9% of emergency reserves).
Global reference for energy data and modeling
As the years passed, the work of the IEA grew and diversified. Beyond the compilation of data and technological analyses in each energy sector, the Agency extends its action to cooperation and to the “global energy dialogue”. Thus, as early as the 1980s, the IEA participated in the first global meetings on renewable energies, and as early as 1989, in the first work of the IPCC.
In addition to its recurrent publications, in particular, as early as 1977, the World Energy Outlook (WEO), a reference on all energy topics, the Agency brings together international expert conferences, assesses the energy programmes of member and non-member countries, and prepares studies and recommendations for its members, but also for the G7, the European Commission and non-member countries. Since 1993, thanks to digital tools, the IEA has been producing long-term global prospective models, which frame all of its more sectoral or regional studies.
The EIA's prospective models. In its World Energy Outlook, each year the IEA presents several scenarios (often 3) for the evolution of the global energy system, in about twenty geographical macro-areas, sector by sector, from the present until 2050 or 2070. Scenarios are built in a hybrid way, with a lot of technological and cost hypotheses, which change over time with the maturation of the sectors, exogenous hypotheses for populations and economic growth, and technology distributions and deployments that are often posed “by hand”, but sometimes also determined by partial sectoral optimizations. The scenarios are divided into 3 main families:
- “business as usual” scenarios, in line with policies
current (“Stated Policies Scenario”)
- scenarios assuming that current political announcements, in particular
decarbonization objectives are respected (“Announced policies scenario”)
- sustainable evolution scenarios, which model the trajectories of what
should be done in order to achieve a given objective, in particular, “Sustainable
Development Scenario”, compatible with the 2 degrees objective of the Agreement of
Paris, and since 2021, the “Net Zero 2050" scenario, supposed to be compatible with the
limit to 1.5 degrees.
The two criticisms: a Western and energetically conservative framework
For many years, however, the IEA has been the subject of two main criticisms. On the one hand, the IEA was accused of promoting the interests of its members, a club of Western, rich and powerful countries, at the expense of developing countries. In particular, its concept of energy security, which has long focused on the supply of cheap oil to its member countries, has only recently opened up space to questions of access to energy in developing countries.
It should also be noted that in the wake of the Cold War and unlike other major international organizations, the IEA did not transform into a World Energy Organization. Its membership remains limited to forty states in the world, in strong superposition with the perimeter of NATO, and with the exclusion of in particular OPEC countries, most African countries, and above all, major absentees: Russia, China and India: Russia, China and India, even if the last two have become “associated countries”.
Second major complaint, the IEA was very accused of being influenced by major industrial and fossil interests, compromising its objectivity in the analysis of energy policies, and for having very poorly anticipated - or even unwilling to accept - the rise in power of renewable energies beginning in the 2000s. In particular, the projections for the deployment of photovoltaics have been highly and consistently underestimated in the WEO scenarios throughout the period 2006 - 2018, to the great outrage of supporters of this industry and environmental NGOs. While the international consensus on the climate emergency was consolidated in 2015 with the Paris Agreement, the IEA still seemed weakly capable of providing sufficient ambition in the fight against climate change. She is also often accused of investing too much in technosolutionism and giving too much credit to solutions that are not sufficiently demonstrated, for example, carbon capture and sequestration. The unsatisfactory treatment of renewable energies by the IEA even led, in 2009, to the creation of the International Agency for Renewable Energies (IRENA) with a much larger membership (169 members in 2023).
From one criticism to another - the IEA's climate metamorphosis
Since 2015, under the leadership of its new director Fatih Birol,, the IEA has undergone significant changes. They were probably accelerated by the Pressure from civil society and anti-fossil environmental NGOs, and in particular by the solemn interpellation, in 2019, in a Letter from 60 decision-makers (scientists, investors, managers of companies and major institutions) who call on the IEA to fully put forward a sustainable development scenario (SDS), which is not only in line with the 2 degrees objective but with the 1.5 degrees objective.
In 2021, the IEA then published a scenario for the first time Net Zero Emissions 2050 (zero net emissions in 2050), compatible with the 1.5 degrees objective, which is the Agency's most important editorial success. In this scenario, several new features appear, in particular the use of sobriety measures through behavioral changes, which are incorporated into the modeling for the first time (for example the reduction of trips home to work via teleworking). Very ambitious deployments of clean technologies are now fully modelled: renewable energies, hydrogen, electrification of transport and industry, carbon capture, etc.). Solar energy, once abandoned, is now even recognized as “the new king” electricity markets.
Another major development: the IEA is broadening its understanding of energy security by integrating the issue of critical minerals (1)Er report on this issue in 2021) and by devoting an increasingly pronounced focus to the analysis of the complexities and resilience of industrial value chains — strongly questioned by the Covid and energy crises linked to the war in Ukraine.
One of the most striking recent messages carried by “AIE 2.0” is the the non-need, in the Net Zero 2050 scenario, to invest in new fossil projects, from 2021 (excluding operational investments for projects in operation). This message, well received by climate activists, has drawn strong criticism from defenders of fossil industries, and countries for which this resource is economically significant - reversal, or at least, a diversification of the criticisms made of the Agency.
Around COP 28, OPEC also showed itself openly very critical of the Agency's message, according to which all fossil fuels should see a peak in production before 2030. Another expression of similar discontent, Robert McNally, former energy adviser to G.W. Bush, recently declared that “the IEA's long-term predictions are no longer reliable” because it has “succumbed to politicization” and “green censors.”
A Ministerial Communiqué that confirms the course
At the end of the 50th anniversary of the IEA celebrated in Paris on 14 February, and the 287th Ministerial Summit held there, A Communiqué was published by its Governing Board (an infrequent occurrence, the last two dating from 2022 and 2020). This Communiqué fully confirmed the recent developments of the Agency, in particular, reaffirmed the overriding mission of “putting climate change and sustainable development at the center of its activities and analyses”. Energy security issues also remain at the forefront, in fact, the energy crisis of 2021 - 2022, considered to be the first truly global energy crisis, and the role played by the IEA, have only confirmed the still very current importance of this mission - including on strategic oil stocks.
Among the Agency's reaffirmed missions, the Communiqué highlights the importance of Net Zero 2050 scenarios in view of the 1.5 degrees objective, as well as the objectives formulated by the IEA for 2030 at COP 28 (December 2023): tripling of global renewable capacities, doubling of annual progress in energy efficiency, doubling of annual progress in energy efficiency, reduction of at least 75% of methane emissions from the energy sector. It also calls on the Agency to establish a “critical minerals security program”, and urges it to continue cooperation between all countries, especially emerging countries, and to work for “affordable energy access for all”, within the framework of “people-centered transitions”.
Despite the turbulence caused by its recent transformation, at the beginning of its fifties, with its nearly 350 employees, its forty technological collaboration programs, and numerous other partnerships, the IEA sees its role as a guide for the global energy transition approved, and its course strengthened.
Other sources
International Energy Agency, Origins and Evolutions, European Parliament, 2016, https://www.europarl.europa.eu/RegData/etudes/IDAN/2016/582015/EPRS_IDA(2016)582015_FR.pdf
Anca Gurzu, “As climate 'referee, 'IEA chief faces scrutiny”, Cypher, February 21, 2024.
https://fr.wikipedia.org/wiki/Agence_internationale_de_l%27%C3%A9nergie
https://www.europarl.europa.eu/meetdocs/2004_2009/documents/dv/cv_birol_/cv_birol_en.pdf
https://www.iea.org/topics/the-ieas-50th-anniversary (History of the EIA by the EIA).
Image Credit: International Energy Agency