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Exclusive: IEA defends energy outlooks in letter to GOP

Apr 10, 2024
IEA chief Fatih Birol

The IEA's Birol in February. Photo: Benjamin Girette/Bloomberg via Getty Images

The International Energy Agency, responding to GOP lawmakers' recent complaints, said energy security remains "at the heart" of its work, and defended its fossil fuel demand outlook as within the mainstream.

Why it matters: The April 5 letter from IEA boss Fatih Birol obtained by Axios provides the agency's most detailed response yet to criticisms and inquiries from Capitol Hill Republicans.

  • This isn't just inside baseball: The intergovernmental body provides closely watched analyses used by policymakers, companies, journalists and beyond.
  • But the agency's response didn't pacify Sen. John Barrasso, who said he remains "deeply troubled" that the IEA "appears to be doubling down on its flawed methods."

The big picture: A few toplines from Birol's letter to Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, and House Energy and Commerce Chair Cathy McMorris Rodgers ...

  • IEA showed its energy security bona fides when, for instance, it coordinated releases from members' emergency oil stockpiles after Russia attacked Ukraine, Birol argued.
  • He defended IEA's projection that, under nations' stated policies, global fossil fuel demand will peak this decade.
  • Birol also parried critics of this "stated policies" scenario, which is now IEA's most cautious long-term case, replacing the "current policies" outlook abandoned a few years back.
  • The abandoned scenario "was not a policy-neutral approach as it did not include the effect of future policy actions, even where governments had announced their intention to enact them," he wrote.

"We have consistently warned that achieving the stated policies should not be taken for granted," the letter stated, noting that none of its various long-term scenarios should be considered "forecasts."

  • Elsewhere, it cautioned that IEA has "frequently highlighted the wide range of possible outcomes" for long-term gas demand.

The other side: "Officials at the IEA have been around long enough to know that pie-in-the-sky promises of politicians are no substitute for the actual laws that legislatures enact," Barrasso said in a statement to Axios.

  • IEA should "return to its core mission — providing objective, sober analyses of the real world," he added.

Catch up quick: Some Republicans and some other critics say IEA offers overly rosy projections about the transition from fossil fuels.

  • They argue that IEA no longer presents a baseline, real-world outlook despite still-rising oil and gas demand, given that the stated policies case includes some aspirational or uncertain plans.
  • This bubbled up recently when David Turk, a top Energy Department official and a former IEA deputy executive director, cited IEA's fossil demand projection to defending the recent decision to pause new LNG export approvals.
  • Critics also accuse IEA of straying from its founding energy security mission and morphing into a climate advocacy group.

Zoom in: The letter answers the lawmakers' questions about U.S. funding.

  • The U.S. provided 14% of IEA's annual expenses over the last 10 years.
  • There was $5.8 million for IEA's "regular budget" in 2023 and is set to provide the same amount this year, slightly up from $5.7 million in 2015-2022.
  • Over the last decade, U.S. has provided an additional voluntary payments averaging $1.07 million annually.

The intrigue: Another flashpoint is IEA's long-term "net-zero" emissions scenario, which currently says no new "long lead time" oil and gas projects are needed.

  • Critics contend IEA's messaging discourages needed supply investment.
  • IEA says it has been clear that declining investment in this hypothetical roadmap is conditioned on a massive scale up of "clean" energy.

What's next: Republicans are continuing their inquiries and exploring the Energy Department's engagement with IEA, so look for this tussle to keep going.

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