On Wednesday, the National Center for Energy Analytics (NCEA) hosted a panel featuring bipartisan policymakers and industry experts regarding the International Energy Agency (IEA) that confirms the agency’s recent shift off-course, its misguided role in policymaking, and how the agency has gone astray from its original mission of ensuring energy security.
The panel and the report on the IEA published by NCEA follows a recent report released by Senator Barrasso criticizing the IEA’s divergence from its core mission. As Energy in Depth previously analyzed, amidst increasing pressure from environmental activist groups, the IEA has shifted from its original energy security mission to instead become an “energy transition” cheerleader.
NCEA’s report further confirms: the IEA has lost its way and must be steered back to its duty of prioritizing global energy security by providing accurate, credible analyses.
NCEA Report Confirms the IEA Prioritizes Political Goals
As Sen. Barrasso’s report outlined, the IEA has strayed from its original mission and has embarked on a vision shift to discourage traditional energy sources. Similarly, rather than providing unbiased, credible predictions, The NCEA report details how IEA has become a “promoter of an energy transition.” The focus on an energy transition has resulted in significant changes to the IEA’s signature annual report, the World Energy Outlook (WEO).
A key change to the WEO is the abandonment of the IEA’s longstanding Current Policies Scenario, which was used as a “business as usual” reference case to project oil and natural gas demand. Eliminating its business-as-usual case encourages the IEA to publish energy outlooks that rely on subjective scenarios and prioritize climate action agendas.
NCEA’s report details how the WEO’s oil forecasts, particularly the claim that the world will see peak oil demand by the early 2030s, are not aligned with energy experts’ consensus or demand signals. Publishing biased data is harmful for policymakers, investors, and others who have long relied on the IEA to accurately project energy demand, as the NCEA’s report explains:
“The promotional aspirations and flawed assumptions underlying IEA’s peak-demand scenarios have serious implications, given the obvious global economic and security considerations in planning for and delivering reliable, affordable energy supplies. The IEA is damaging its long legacy as the world’s leading energy security watchdog by offering dangerously misleading outlooks.”
Bipartisan Agreement on the Importance of Energy
NCEA’s report rollout featured panel commentary from Senator John Barrasso (R-WY), Senator John Hickenlooper (D-CO), Executive Director of the NCEA Mark Mills, Former Senior Official at the IEA Neil Atkinson, Williams Companies CEO Alan Armstrong, and Professor Scott W. Tinker.
Speaking at the event, Sen. Barrasso and Sen. Hickenlooper both emphasized their states’ role in domestic energy production, as well as the importance of the United States remaining the leader in the energy and critical minerals sectors.
Sen. Barrasso praised the importance of oil and natural gas, both for national security but also for international geopolitical stability. He also continued to express concerns about the IEA’s divergence from their mission. Sen. Barrasso agreed strongly with the NCEA that IEA’s use of hypothetical scenarios in place of real economic indicators is not what industry leaders, policymakers, and investors need to make critical decisions:
“The reality to me is, fossil fuels have provided a better life for billions of people and they are going to continue to do so, despite of whatever aspirations there might be…we need to get credible, reliable, accurate, and timely information. And we do not need a group that has a name that is followed in some circles, which then does have an impact on what investments are made, how legislation and regulations are written and the impact on the global demand of energy…”
Sen. Hickenlooper, the junior Democratic U.S. Senator from Colorado and previous Colorado governor, also spoke on the panel about the significance of U.S. energy production. Notably, he stressed the importance of increasing LNG exports, specifically in regions where renewable energy sources are not available or unreliable. Hickenlooper explained why LNG exports should be a matter of bipartisan support, particularly when it comes to enhancing health and quality of living globally:
“When he [Wright] talks about the number of people that die every year, somewhere 2.2 to 2.4 million people die from respiratory illness directly the cause of living in huts or small house where open hearth fires are burning wood or dried during or whatever, and they die every year, and that’s the World Health Organization. […] That’s real, and more LNG and figuring out the right way to get it to the right places in Africa is something that every American, Democrats, Republicans, Independents, should see as an alignment of self-interest.” [emphasis added]
Notably, the Biden administration leaned on data from the IEA rather than its own Energy Information Administration to justify the now-overturned LNG export permitting freeze, demonstrating how policy outcomes are directly enabled by IEA’s misleading forecasts, the more extreme of which call for a halt to new oil and natural gas infrastructure, like LNG export facilities.
While these issues need to be addressed, the IEA says it “welcomes ideas for improving its analysis,” so perhaps the agency will heed Sen. Barrasso’s directive to reinstate a “business as usual” reference case to ensure the continued value of IEA data.
Bottom line: NCEA’s report on the IEA shows how the agency has ceded its position as a source of reliable and credible data. The analyses published by Senator Barrasso and NCEA reports are timely as the Trump administration has begun scrutinizing the value of international institutions, particularly when it comes to prioritizing American energy security.
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