Dear Readers, sometimes we produce original articles with researched primary references, and other times we pass on information and articles produced by well vetted analysts and experts. To that end, find below the adapted short article: That Took Awhile - Somebody Finally Recognizes the Dangers of the IEA, from Goehring and Rozencwajg, Natural Resource Investors. Stay vigilant!
Presenting: Somebody Finally Recognizes the Dangers of the IEA
Although it took quite some time, people have finally realized how misguided the International Energy Agency has become and the potential danger now embedded in its bias. Back in the day,The IEA was established by the Organization for Economic Co-operation and Development (OECD) to monitor oil supplies following the 1973 oil crisis. Its central mission was to prevent shocks caused by unanticipated severe oil supply disruptions, by thoroughly researching and reporting on global energy markets.
However, in an ironic twist, on May 18th, 2021, the EIA released a white paper entitled “Net Zero by 2050.” In the report, the IEA insists that the global energy industry significantly curtail upstream investments and redirect capital into renewable energy. The irony of the widely cited report is apparent: were the industry to follow its advice, the IEA would usher in the supply shock it was created to prevent. Verging on the absurd, Dr. Birol, the IEA “Chief” even included the IEA’s mission statement in the report: “Since the IEA’s founding in 1974, one of its core missions has been to promote secure and affordable energy supply to foster economic growth.”
Supply shock. Two periods when oil prices rose more than ten-fold were analysed. In each case, non-OPEC supply growth slowed, ceding market share and pricing power to the OPEC bloc. If energy companies heed the IEA’s advice, OPEC will gain market share again and prices will likely rise. This reality was not lost on the IEA: “The contraction of oil and gas production will have far-reaching implications for all the countries and companies that produce these fuels. […] Supplies will become increasingly concentrated in a small number of low-cost producers. OPEC’s share of the much reduced global oil supply will grow from around 37% in recent years to 52% in 2050 -- a level higher than at any point in the history of oil markets.”
It is naïve for the IEA to think OPEC will not exercise pricing power given its rapidly rising market share. In the 1970s, the OPEC market grew by six percentage points, and prices surged ten-fold. In the 2000s, it grew by three percentage points and prices rose thirteenfold. By the IEA’s own admission, its proposed policies will see OPEC’s market share grow by fifteen percentage points.
The choice between energy security and climate change is a false one. However, there are solutions that address both concerns, such as natural gas and nuclear power. Unfortunately, the IEA seems uninterested in seriously addressing the issues. Instead, they remain aggressive advocates of “ESG reneawble” energy policies designed to usher in the next energy crisis.
Some are taking notice and calling out the IEA. John Barrasso, M.D., Ranking Member of the US Senate Committee on Energy and Natural Resources, and Cathy McMorris Rodgers, Chair of the US House Committee on Energy and Commerce, have sent a letter to Fatih Birol the IEA Director.
Choice excerpts from the letter “International Energy Agency has Abandoned its Energy Security Mission” from Barrasso & McMorris Rodgers to Birol are below:
Dear Dr. Birol:
We are writing to you because we are concerned that the International Energy Agency (IEA) has strayed from its core mission—promoting energy security.
Indeed, we would argue that the IEA has been undermining energy security in recent years by discouraging sufficient investment in energy supplies—specifically, oil, natural gas, and coal. Moreover, its energy modeling no longer provides policymakers with balanced assessments of energy and climate proposals. Instead, it has become an “energy transition” cheerleader.
[…]
The IEA also provides global energy forecasts as part of its mission. As you have noted, IEA forecasts tremendously influence how the world sees future energy trends. Consequently, the IEA must conduct its energy security mission objectively. We believe the IEA is failing to fulfill these responsibilities.
The IEA is no longer credible and no longer functions as designated at formation. The IEA should be disbanded and all funding terminated. Tomorrow is a week late for this action.
Great work exposing the IEA fraudsters!
The IEA is no longer credible and no longer functions as designated at formation. The IEA should be disbanded and all funding terminated. Tomorrow is a week late for this action.