Following months of criticism from lawmakers and the Trump administration, the International Energy Agency (IEA) has finally decided to take a step towards returning to its original energy security mission.
For the first time since 2019, the IEA’s annual World Energy Outlook (WEO) will include a “current policies scenario” (CPS) baseline case that forecasts energy demand based on real market signals, not policy hypotheticals.
Ahead of the official release of the World Energy Outlook 2025 in October, let’s look at how IEA has shifted to where it is now and why its recent decision is the first step in a transition back to the agency’s original mission.
The Vanishing Baseline Case Returns
In 2020, the IEA quietly abandoned its longstanding Current Policies Scenario, which was used as a “business as usual” reference case to project how much oil and natural gas the world will need decades into the future.
Instead, under heavy pressure from environmental activist groups, IEA began to publish energy outlooks that relied on subjective scenarios assuming different degrees of climate action, assuming greater uptake of renewable energy sources than the reality on the ground.
As David Blackmon writes in the Daily Caller, the shift allowed the IEA to freely advocate for anti-fossil fuel policies, rather than maintain a neutral, unbiased stance:
“This inevitable bias had an immediate and very noticeable effect. In a report published by the IEA in May 2021 Executive Director Fatih Birol laughably stated that ‘there will not be a need for new investments in oil and gas fields’ and urged oil and gas producers to halt investments in exploration and development of new oil reserves.”
The IEA’s unrealistic forecasts are particularly risky for developing economies, as the leader of the African Energy Chamber pointed out earlier this year. Since IEA forecasts are used by national governments and major financial institutions to guide energy investment decisions like LNG infrastructure, biased forecasts threaten long-term energy security.
Criticism and Pressure Mounts
Lawmakers and energy sector experts have consistently sounded the alarm regarding the IEA’s dramatic, misguided shift.
One of the key critics of IEA has been Senator John Barrasso of Wyoming. As Energy in Depth has previously analyzed, Senator Barrasso released a report in January of this year outlining a path towards restoring credibility at IEA.
The report described IEA’s pivot from trusted oil markets forecaster to “energy transition cheerleader,” and directly called on the agency to reinstate its Current Policies Scenario:
“It has become clear [sic] that IEA is failing to fulfill these responsibilities. By its own admission, IEA has placed greater emphasis on ‘build[ing] net-zero emission energy systems to comply with internationally agreed climate goals.’ This new focus has as led IEA to veer away from objectively informing and educating policymakers and instead promote an agenda often at odds with its energy security missions.”
Following Barrasso’s report, the Trump Administration and appropriators in Congress doubled down on their criticism of the IEA, even calling for the ouster of top IEA officials. Earlier this summer, Energy Secretary Chris Wright took aim at IEA’s projection that global oil demand will peak by 2030, calling the outlook “nonsensical.”
In July, lawmakers on the House Appropriations Committee approved legislation that would cancel funding for IEA, an unprecedented move following decades of U.S. funding for the organization, Politico reports. The U.S.’s departure would be a major loss for the agency, as it currently provides around 14 percent of its annual budget. As the Committee’s report declares:
“The Committee finds that the Agency has abandoned objectivity in the critical energy-supply information it produces and, instead, has pursued politicized information to support climate policy advocacy…This well-documented shift by the Agency undermines decision-making by policymakers and threatens energy security and the economic interests of the United States.”
It’s yet to be seen whether IEA’s planned reintroduction of its baseline oil and natural gas scenario will be sufficient to win back support and restore damaged credibility.
Bottom line: After months of criticism and calls for reforms, it seems the International Energy Agency is finally listening to energy expert knowledge and lawmakers instead of activist pressure. Even after the IEA’s claims of reinstating its baseline case, the Trump administration and Republican lawmakers will certainly be putting the World Energy Outlook 2025 under a microscope, which will be a clear indication of where the agency stands in the era of American energy dominance.
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