Every morning at 6am, Fatih Birol skips breakfast, pours himself 5 – 6 cups of Turkish tea, and prepares to face one other day of disagreement and criticism.
The 66-year-old head of the International Energy Agency (IEA) has spent the previous three years being more and more blunt about the world’s want to change from fossil fuels to clear energy, as carbon emissions proceed to develop and international temperatures hit new month-to-month information.
In June, for instance, the intergovernmental energy physique’s chief stated it was time for oil and gas corporations “to look at their business plans”. The world is headed for a “staggering” glut of oil by the finish of the decade if the business continues to improve manufacturing, he warned, as the Chinese financial system slows down and extra shoppers change to electrical automobiles, decreasing demand for oil and gas.
Big Oil has responded with the wounded anger of a jilted accomplice. Birol, a former staffer at the oil cartel Opec, had as lately as 2017 urged the business to pump extra oil so as to stave off shortages. “Our message to the oil industry here in Houston is invest, invest, invest,” he stated at the CERAWeek convention in January that 12 months.
His change of method has led some oil executives to privately recommend that Birol is enjoying politics and that the IEA, historically a supply of impartial and dispassionate information and evaluation on energy, is now partisan. “They should return to their focus on energy security,” says one oil firm chief govt.
The IEA and Opec have been as soon as intently aligned on their energy forecasts, however now have vastly completely different views on the future of oil. The IEA believes the world will attain peak oil in 2029, consuming 105.6mn barrels a day. Opec, a cartel of oil-producing nations led by Saudi Arabia, sees no peak, with oil use rising to a minimum of 116mn barrels a day in 2045.
While the IEA is now specializing in how the world makes the shift away from fossil fuels, Opec believes abandoning oil and gas will destabilise the energy markets and lead to additional crises.
The IEA has additionally develop into a political goal in the US, which is producing report quantities of oil and gas. Republican senators have known as for America to cease funding the IEA and former officers in Donald Trump’s administration say Trump will strive to oust Birol if he’s reelected.
“The next president should work . . . to end this progressive echo chamber and return the IEA to its original, non-partisan mandate of promoting energy security,” says Carla Sands, who helps to run energy coverage at the America First Policy Institute, a physique generally described as Trump’s “White House in waiting”.
“Taxpayer dollars should not fund an organisation that works against the interests of the American people,” she provides.
Birol argues that reward for the IEA’s work far outweighs the criticism. “Sometimes I take it personally, but I try to put it into context,” he says. “We have, I believe, beautiful goals to reach and to get there you have to get some bruises.”
The IEA’s forecasts matter. Governments, oil corporations and buyers depend on the company as a trusted supply on international energy to inform their insurance policies and methods. But its forecasts have confronted criticism in the previous from local weather activists for not predicting the speedy rollout of renewables and at the moment are being attacked by fossil gas advocates as too supportive of the energy transition.
Birol, whose third time period as govt director ends in 2027, insists the IEA is headed in the proper path: “I am very happy with the way we have chosen because the IEA is growing and the public is very happy.”
“The adjectives we use are a function of the numbers,” he says, referring to his language about the oil glut. By 2030, there can be 8mn barrels a day of surplus oil accessible, he says. “That has never been the case in history outside of Covid. We want to call things by their names and we don’t shy away from that.”
The transformation of the IEA beneath Birol has been dramatic. The intergovernmental company was arrange after the Arab-Israeli oil embargo in 1973 that despatched costs spiralling.
Its mandate was to guarantee energy safety by offering information and evaluation and managing a strategic reserve of its 16 members to reply to emergencies. Its World Energy Outlook, an annual report forecasting the energy panorama by to 2050, quickly turned a benchmark for policymakers and energy corporations.
Birol, an economist who joined from Opec in 1995, began broadening the IEA’s world view when he ascended to the high job in 2015. Rather than London, Paris or Brussels, he selected to give his maiden speech in Beijing. “If an International Energy Agency does not have the major economies on board, does it deserve to be called ‘international’?” he says.
Since then, the IEA has signed up one other 15 nations as full members and 13 as affiliate members. This consists of China, India, Brazil, Indonesia and South Africa, giving it inside information on 80 per cent of the world’s energy system and permitting it to give a worldwide view on the tectonic shifts beneath manner.
Birol says oil corporations that dispute the IEA’s forecasts restrict their perspective to western sources. “You cannot ignore what is happening in China,” he says.
For the first few years of his tenure, nevertheless, Birol caught with the IEA’s traditions, producing a major forecast known as the New Policies Scenario (NPS) that extrapolated the established order in the energy world, with out considering the pledges by nations in the 2016 Paris Agreement to cut back emissions so as to restrict international warming to properly beneath 2C and ideally to 1.5C above pre-industrial ranges.
This suited the oil business properly. Until 2020, the IEA was nonetheless forecasting that oil or gas demand would proceed to rise all the manner by to 2040 in its major situations. Companies defended new oil and gas tasks by noting the IEA’s figures.
Climate activists, in the meantime, accused the IEA of underestimating the development of renewable energy and its potential to change fossil fuels. “Even today they tend to be conservative about the speed with which cleantech costs fall and about the rate of deployment growth,” says Kingsmill Bond, an energy strategist at the Rocky Mountain Institute, a sustainability think-tank.
In 2018, Birol pivoted after the launch of a particular report from the Intergovernmental Panel on Climate Change (IPCC), which made it clear that the objective of limiting international warming to 1.5C was at risk. He determined that the energy sector, which is chargeable for greater than two-thirds of greenhouse gas emissions, wanted not simply evaluation but additionally steering.
“I had a meeting with my colleagues and I told them we needed to come up with a road map for how to transform the energy sector to be in line with 1.5C,” Birol says.
In 2021, months after the world’s energy use had plummeted as a result of of the Covid pandemic and when it appeared a worldwide reset may be doable, the IEA revealed a report on methods to obtain web zero carbon dioxide emissions by 2050.
The web zero situation (NZE) milestones, which included wind and photo voltaic technology to quadruple by 2050, all new automobiles to be zero emissions by 2035, and no new oil and gasfields, have been utilized by campaigners, policymakers and corporations to modify for the tempo of transition.
“It’s much better to have a benchmark scenario for net zero, with sector-specific milestones, than not to have one. Before the IEA NZE, there wasn’t any widely accepted one,” says Simon Sharpe, the former deputy director of the UK’s COP26 unit and writer of Five Times Faster.
The NZE has been utilized by the majority of giant banks to work out their lending guidelines so as to align with the Paris settlement. This led to BNP Paribas, for instance, saying it will not present any financing to oil and gasfield improvement and to Barclays saying it will not finance any lengthy lead time tasks, though each banks proceed to do different enterprise with the oil and gas sector.
The IEA’s change in path was an enormous success for the company. “The IEA has done very well out of it. It has gained a lot of supporters and been recognised for its leadership,” says Greg Muttitt, an energy researcher who wrote a 2018 report calling for the IEA to take extra account of local weather change in its fashions. “People felt like they needed some guidance on what it meant to align with 1.5 degrees. When there is a really obvious question, lots of people start asking it and the IEA was the obvious player to answer it,” he provides.
“I hear the complaints from the oil companies and Opec, but climate change is arguably the biggest issue facing the energy industry, so the idea the IEA should not focus on it and just look at oil supplies is quite bizarre.”
The company’s pivot has additionally introduced monetary advantages. While its core price range, which stood at €61mn in 2022, has remained broadly steady, members pay “voluntary contributions” in change for recommendation on the transition and the IEA’s Clean Energy Transitions Programme generates an additional €20mn a 12 months. With the more money, the IEA has greater than doubled in dimension. “When I took over, we were slightly more than 200 people. Now, with the same core budget, we are more than 420 people,” says Birol.
At the identical time, the quantity of experiences issued by the IEA has rocketed. In 2015, the 12 months of Birol’s appointment, the company put out simply 37 experiences. By 2022 it reached a peak of 197, or multiple each two days.
“A huge priority is establishing a platform for us to be able to respond [to requests for advice]. There’s a lot of stuff. And, it’s hard work,” says Tim Gould, the IEA’s chief economist. “Things are moving quite quickly now, around politics, energy, policy choices and deployment.”
The IEA believes its give attention to the energy transition was additional vindicated in 2022, when Russia invaded Ukraine and Europe misplaced most of its gas provides. The crunch bolstered the company’s argument that energy safety and switching from imported fossil fuels to home renewable energy go hand in hand.
“There is a discussion about whether the IEA should choose energy security or climate change as its key priority,” says Birol. “When I was a child, our neighbours would always ask me this annoying question: do you love your mother more or your father more? And the answer is I love both of them. So I refuse to make a choice between energy security and climate change. We will focus on both.”
But now, after two years of excessive oil costs, Big Oil is flush with money and refocusing its efforts on pumping extra oil and rising returns to shareholders.
In order to meet their web zero targets, some oil corporations have pinned all their hopes on carbon seize, somewhat than slicing again manufacturing, a coverage that Birol described as an “illusion” forward of final 12 months’s COP28 UN local weather negotiations.
The business is pushing again tougher towards the IEA’s forecasts, saying the company is enjoying a “dangerous” sport that will lead to spikes in energy costs if corporations actually do cut back their actions.
Forecasting peak oil demand by the finish of the decade “is an unrealistic scenario, one that would negatively impact economies across the world,” wrote Opec’s secretary-general Haitham Al Ghais in June. “It is simply a continuation of the IEA’s anti-oil narrative.”
Other, comparable projections have been confirmed to be mistaken, he added: “The IEA suggested that gasoline demand had peaked in 2019, but gasoline consumption hit record levels in 2023, and indeed continues to rise this year. It also stated that coal demand had peaked in 2014, but today coal consumption continues to hit record levels.”
Senator John Barrasso, the most senior Republican on the Senate’s Energy Committee, says that if the IEA continues to base its modelling on wishful considering it’ll put the world’s energy safety in danger.
“The IEA’s models have a significant impact on investment and policy decisions. They must be fact-based, objective and free of an agenda other than the IEA’s core mission — energy security. If [the] IEA refuses to do this, all options are on the table.”
Alan Armstrong, chief govt of Williams, one of the
largest gas pipeline corporations in the US, says the IEA ought to
“stick to the data and not try to build biases into their positioning”.
Birol and his workers reject any notion that the company is something aside from a impartial observer of the information. “I think to say the IEA is political has a political motivation behind it because we are number driven,” says Birol.
Laura Cozzi, the IEA’s lead writer on the World Energy Outlook, says researchers crunch information throughout all member nations for the report, assessing each new energy coverage.
“You might be seeing a slowdown in electric vehicle [sales] in the US, but at the same time, the numbers are rising very fast in China. And we look not only at what is being sold but also at who is expanding their manufacturing. Investments that people are making,” she says.
“I am not aware of another model that is as comprehensive in terms of fuels, technologies, and all aspects of the energy sector, technology policies, investments.”
Birol says rather a lot of his latest hires have been from the oil business: “When I ask them why they want to come to the IEA, they say ‘because I want to do something I am proud of’. This makes me very happy.”
László Varró, a former IEA staffer who now heads Shell’s future planning division, says Birol has a “strong ability to identify the issues that are really rising on the political agenda”.
“There is energy and climate-related work ongoing in other international organisations as well, but overall, in the energy policy field, the IEA has a unique proposition to governments,” he provides.
Perhaps the greatest problem forward, nevertheless, can be an antagonistic White House. The US is a serious contributor to the IEA price range, and Donald Trump has promised to “drill, baby, drill” if he’s re-elected as president.
One former Trump official says a future Trump White House would very seemingly query “the purpose of the organisation, the leadership of the organisation and the future of the organisation”.
Birol says that whereas he didn’t meet Trump throughout his first time period as president, he feels that nothing can cease the energy transition.
“Of course, a political change in a government’s administration would have an impact on transition, slowing down here, accelerating there. But I believe that looking at the economic fundamentals and the technological trends, transition is now irreversible. The direction of travel is very clear.”
This article has been amended to make clear that the IEA forecast that oil and gas demand would proceed to rise by to 2040 in its major situations, not in all situations as initially acknowledged