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IEA chief slams climate 'contradictions' from oil companies

Ajit Niranjan
April 11, 2023

International Energy Agency boss Fatih Birol tells DW that existing oil fields, gas wells and coal mines are "more than enough" if the world is serious about its climate goals.

Fatih Birol
'We have to bring the consumption of oil, gas and coal down': Fatih BirolImage: Heikki Saukkomaa/Lehtikuva/dpa/picture alliance

The head of the powerful International Energy Agency (IEA), a Paris-based organization led by the energy ministers of mostly rich countries, has warned that companies who increase fossil fuel production are contradicting goals to stop the planet heating.

"If they see an increase of unabated oil, gas or coal production in their strategies [...] and at the same time they say that the company strategy is in line with the 1.5 degrees Celsius (2.7-degree Fahrenheit) target, there is a problem," IEA executive director Fatih Birol told DW.

The IEA, a global authority on energy data and analysis, has the ear of governments and companies around the world. The OECD group of industrialized countries created the agency after an oil crisis in 1973 to help secure energy supplies — most of which are fossil fuels.

But in recent years, its actions have expanded to help its members stop climate change. World leaders have promised to try to halt global warming to 1.5 Celsius above preindustrial levels by the end of the century. But current policies put it on track for nearly double that, with some fossil fuel companies planning to expand their operations.

Police carrying climate activist Greta Thunberg
In January, German police carried away climate activist Greta Thunberg during protests to save a village being demolished to expand a coal mineImage: Federico Gambarini/dpa/picture alliance

"We have to bring the consumption of oil, gas and coal down," said Birol. "And if we are able to do that, if we have a trajectory like that, the current existing oil and gas fields and coal mines are more than enough to meet the demand growth."

'No new oil or gas fields'

The IEA's flagship World Energy Outlook report, published each year since 1998, projects how energy supply and demand will change around the world if policies stay the same.

In 2021, it added a landmark new scenario. As governments and investors started to stress about climate change, the IEA released a road map to show how the world economy can reach net-zero carbon dioxide emissions by 2050. Models suggest this target will keep warming to 1.5 C by the end of the century. That scenario, said Birol, is now used as "a Bible of the energy world, the finance world and many, but not all, governments."

One of its key milestones is to stop spending money on new places to pump, drill and dig fuel from the ground. The pathway for 1.5 C shows "no new oil and gas fields approved for development" and "no new coal mines or mines extensions."

Fatih Birol, head of the IEA, giving a speech
Birol has called out companies for claiming to be in line with the 1.5 C target while increasing oil productionImage: Ole Berg-Rusten/NTB Scanpix/AFP/Getty Images

A more recent IEA report repeated the message, though it found room till the end of the decade for yearly investments of $18 billion (€16.4 billion) in new oil fields. These are fields that have already been approved but "require some further investment over the next few years as they ramp up to full production," an IEA spokesperson told DW.

A separate analysis from the International Institute for Sustainable Development, a sustainability think tank, went a step further. It concluded that developing new oil and gas fields is "incompatible" with the 1.5 C target. 

The net-zero emissions scenario of the latest IEA report also shows demand in 2050 for coal, oil and gas fall 90%, 80% and 70%, respectively. Together, the findings have been taken up by climate activists and investors pushing energy companies to clean up their business.

If an oil company says it will increase production, "I don't agree with that, but it is their choice," said Birol. "But if they say, 'I am going to increase my oil production 3 million barrels per day and my company's strategy is in line with the Paris Agreement' — this doesn't work."

"There is a contradiction here — black and white," he added.

IEA has failed to recognize renewable 'revolution'

Despite its strong language on fossil fuels, the IEA has been slow to grasp the growth of clean energy.

Scientists and energy analysts have criticized the IEA for consistently underestimating how much electricity will be made by the sun and the wind. Year after year, its influential scenarios have projected far lower growth in renewable energy infrastructure than countries have built — which may have led policymakers to take the technologies less seriously.

Busting myths about renewable energies

"It's normal that if you are the most important energy organization, you get critics from different sides," said Birol in response. "But most of the criticism we are getting is that we are pushing clean energy so strongly we are undermining the importance of fossil fuels."

Part of the reason for low estimates is that policies to support renewable energy have changed quickly, pushing projections out of date. But experts have also said the agency has been slow to learn from mistakes and update models.

Modeling the growth of renewables from historical data is hard, but the IEA has just been projecting the past into the future, said Jenny Chase, a solar analyst at clean energy research firm BloombergNEF. "The IEA have repeatedly failed to understand that a revolution is happening — but they have finally cottoned on."

A Kenyan student working on a solar panel
Most analysts have underestimated how fast the solar industry would growImage: Thomas Imo/photothek/IMAGO

Some problems have not been fixed, said Andrew Smith, an energy modeler at University College Cork in Ireland. The costs of integrating renewables into electricity grids are far higher in IEA models than reality, he said. "This is a systemic problem that was pointed out many years ago and it still keeps happening."

'No ambiguity' on cutting fossil fuels

Calls to quit fossil fuels have grown as the planet has heated.

Alarmed by the damage caused by climate change and dirty air, the World Health Organization has called for a legally binding plan to phase out fossil fuel exploration and production. In 2021, it said climate change is the "single biggest health threat" facing humanity.

In March, the Intergovernmental Panel on Climate Change published its landmark review of the peer-reviewed science. The UN-backed body, which gets scientists to sum up the research on climate change, concluded that carbon pollution must fall two-thirds in 12 years for a half-chance of keeping global warming to 1.5 C. By 2040, it must have fallen 80% relative to 2019 levels.

In the weeks leading up to the report, several fossil fuel companies weakened their plans to stop polluting. BP lowered its targets to cut emissions from the production of fossil fuels, and Exxon Mobil abandoned plans to use algae as biofuel. Shell is weighing up whether to revise its targets to cut crude oil production, its new CEO Wael Sawan told The Wall Street Journal in an interview in March. 

"It is very simple," said Birol. "If we want to reach our 1.5 C target, you cannot use as much oil, gas and coal as you are using today."

"There is no ambiguity there," he added.

Edited by: Jennifer Collins

Ajit Niranjan Climate reporter@NiranjanAjit