Energy agency boss faults oil industry on climate
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Lindsey Bailey/Axios. Photo: Anadolu/Getty Images
NEW YORK — Oil companies' investments in low-carbon energy sources are falling short of their rhetoric, International Energy Agency head Fatih Birol tells Axios.
Why it matters: The comments are a shot across the bow ahead of the next UN climate summit.
Driving the news: "There's a bit of a contradiction in the share of the climate change or sustainability in their speeches" relative to clean energy's share in their portfolios, he said Tuesday on the sidelines of Climate Week NYC.
- Birol cited IEA's finding that last year, clean energy was around 4% of the industry capital investment.
The other side: Oil execs say their strategies balance climate needs with meeting rising global demand for their fossil products.
Friction point: "I don't want to put all of them in the same basket, some of them are doing better than others," Birol said.
- The industry totaled around $30 billion of clean investment last year, including M&A, per IEA.
- "But in general, the global oil and gas industry, I cannot yet say that they are an important part of the clean energy transition."
How it works: Oil majors like Exxon and Shell, and some state-owned giants and large private independent players, have boosted investments in recent years.
- Strategies vary. U.S.-based Exxon and Chevron focus on carbon capture, hydrogen and alternative transport fuels.
- European majors are into renewable power too, though BP and Shell have been getting more selective.
What we're watching: Birol sees a "huge opportunity" for the industry to invest profitably, noting its skill sets translate nicely to areas like offshore wind and geothermal.
State of play: Other interview highlights:
🛢️ Oil markets: Birol said he "wouldn't be surprised" if OPEC+ reevaluates its plan to start unwinding production curbs in December. He cited U.S. oil prices around $70 despite Middle East tensions and offline Libyan production.
⚡ Power markets: While Birol said many organizations overestimate future oil demand, rising electricity needs ahead will be "much stronger than many people expect."
- He cited air conditioning use in Asia and Africa, EV growth that will be faster than what many believe, and AI and data centers.
⚛️ Nuclear energy: Birol sees the trifecta of power demand, energy security needs, and climate policies together creating tailwinds for nuclear power.
- He wouldn't be surprised if some European nations try to "make the most" of existing plants and even look again at dormant reactors — akin to what's happening at Pennsylvania's Three Mile Island.
