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Expand chart
Reproduced from IEA's World Energy Investment 2019 report; Chart: Axios Visuals 

Companies are either investing too much or too little in oil and natural gas, depending on whether or not the world takes aggressive action to reduce greenhouse gas emissions, concludes a new International Energy Agency report.

Driving the news: Oil spending levels, which have dropped since 2014 when oil prices collapsed, would need to drop even more to be consistent with the goals outlined in the 2015 Paris Climate Agreement. But investment levels also “fall well short of what would be needed in a world of continued strong oil demand,” the report states.

Where it stands: The above chart shows how conventional oil and gas discoveries are at record lows, creating risk in the coming years of either not enough oil for current demand or too much oil in a carbon-constrained world.

  • The report says investment in exploration is set to rise to $60 billion this year, an increase of 18% compared to 2018, which “would be the first one since 2010.”
  • “Nonetheless, the share of exploration in total upstream investment remains almost half the level in 2010.”

Between the lines: IEA excluded from this chart unconventional resources, like the ones found in shale rock formations driving America’s oil and gas boom. That’s because shale resources aren’t “discovered” the same way conventional kinds are. And anyways, the latter remain the dominant channel for investment (about two-thirds).

What they’re saying: Government uncertainty on climate policy is leading oil and gas companies to focus on more profitable projects with shorter lead times — like shale resources — that expose them less to long-term uncertainty, according to IEA expert Michael Waldron: “Governments have not clearly committed nor have they clearly not committed to reaching the Paris Agreement targets.”

Go deeper:

Go deeper

Updated 2 hours ago - Politics & Policy

In photos: The Biden and Harris inauguration

President Biden and first lady Jill Biden watch a fireworks show on the National Mall from the Truman Balcony at the White House on Wednesday night. Photo: Chip Somodevilla/Getty Images

President Biden signed his first executive orders into law from the Oval Office on Wednesday evening after walking in a brief inaugural parade to the White House with First Lady Jill Biden and members of their family. He was inaugurated with Vice President Kamala Harris at the U.S. Capitol on Wednesday morning.

Why it matters: Many of Biden's day one actions immediately reverse key Trump administration policies, including rejoining the Paris Agreement and the World Health Organization, launching a racial equity initiative and reversing the Muslim travel ban.

Republicans pledge to set aside differences and work with Biden

President Biden speaks to Sen. Mitch McConnell after being sworn in at the West Front of the U.S. Capitol on Wednesday. Photo: Erin Schaff-Pool/Getty Images

Several Republicans praised President Biden's calls for unity during his inaugural address on Wednesday and pledged to work together for the benefit of the American people.

Why it matters: The Democrats only have a slim majority in the Senate and Biden will likely need to work with the GOP to pass his legislative agenda.

The Biden protection plan

Joe Biden announces his first run for the presidency in June 1987. Photo: Howard L. Sachs/CNP/Getty Images

The Joe Biden who became the 46th president on Wednesday isn't the same blabbermouth who failed in 1988 and 2008.

Why it matters: Biden now heeds guidance about staying on task with speeches and no longer worries a gaffe or two will cost him an election. His staff also limits the places where he speaks freely and off the cuff. This Biden protective bubble will only tighten in the months ahead, aides tell Axios.