Key energy agency goes back to the future
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Illustration: Rebecca Zisser / Axios
File under wonky-but-important: The International Energy Agency's next flagship, long-term outlook will include a more conservative model of the transition from fossil fuels.
Why it matters: IEA's studies inform policymakers, energy company boardrooms, investors and researchers worldwide.
- But GOP critics and some analysts say IEA has adopted an overly rosy, advocacy-tinted view of the energy transition.
What we're watching: Whether the report this fall, and reaction to it, helps ease growing U.S. pressure on the multinational body.
- Energy Secretary Chris Wright has threatened a U.S. withdrawal from IEA, and some Capitol Republicans are seeking to end U.S. funding.
Driving the news: The agency's World Energy Outlook — the annual look-ahead to mid-century — will have a "current policies scenario" for the first time since 2019, IEA quietly announced in a wider March calendar notice about it.
- WEOs always have several scenarios, but in recent years the most cautious has rested on "stated policies" — including those "under development" — rather than just present ones.
What's next: The 2025 edition will have a "wide spectrum of possible outcomes that today's markets and policies imply," IEA said.
- "These will include exploratory scenarios that flow from different assumptions about existing policies, including the Current Policies Scenario, as well as normative pathways that achieve energy and emissions goals in full."
Between the lines: One friction point is IEA's view that oil demand will stop growing this decade, which Wright in June called "nonsensical."
Yes, but: While IEA's take on oil consumption collides with some look-aheads, executive director Fatih Birol points out that its view is well within the analytical mainstream.
Our thought bubble: Some of the drama is about vibes.
- IEA's widely-circulated "net-zero" case shows aggressive moves from fossil fuels and much lower oil and gas investment needs.
- Yet it's a theoretical roadmap to achieve an outcome — not a prediction of where the world is heading.
- But IEA critics accuse the agency of adopting the posture of a climate NGO and straying from its core security mission.
The bottom line: The WEO is always a must-read in energy circles, and this year's edition is under an especially bright light.
