[Premium] IEA Says it is Still Relevant Despite US Shale
The International Energy Agency (IEA) says it is still relevant in today's world, where fears over oil supplies are receding thanks to more liquid gas markets, shale oil and gas production in OECD countries and the surge of renewable energy.
Launching its latest annual World Energy Outlook earlier this week, the IEA executive director Fatih Birol said the energy world was undergoing "extraordinary times" and that the US was the "undisputed leader" in oil and gas production.
And the relative importance of oil in the energy balance is shifting: more and more, the international oil companies are shifting towards gas, which may be liquefied and delivered to power generation or other plants anywhere; and renewable energy. Oil is still vital for chemicals but in transport it is losing ground, albeit very slowly, to electric or natural gas-fuelled vehicles. Unlike a decade or two ago, nobody talks about 'peak oil' now – except in the context of demand peaking.
Today's world is therefore a far cry from the oil price shocks of the 1970s that led to the creation of the IEA and the notion of obligatory strategic oil stocks, and it poses the question: what is its purpose now?
The IEA agrees that its purpose has changed but says its relevance remains; and that the 2017 ministerial meeting earlier this month confirmed its new mandate: opening the doors of the IEA to emerging economies; strengthening its commitment to energy security; and becoming a global hub for clean energy and energy efficiency.
In a statement to NGW November 15, it said: "Only two years ago the member countries of the IEA made up less than 40% of global energy demand, highlighting the shifting centre of gravity of the global energy system toward Asia and other large emerging economies. To ensure the continued relevance of the Agency, the IEA has welcomed seven Association countries since November 2015: China, India, Brazil, Indonesia, Morocco, Singapore and Thailand. Today the IEA Family of countries makes up more than 70% of global energy demand and includes both major energy consumers and producers.
"In terms of energy security, the IEA has broadened its work to include not only oil, but also natural gas and electricity security. This has included work to promote LNG market transparency and advice, how to further integrate variable renewables into electricity grids, and understanding the potential impact of cyber-attacks on energy systems. That aside, the IEA believes that emergency oil stocks will continue to play an important role in the future; political crises and extreme weather events highlight why collective energy security is vitally important for all members of the IEA family.
"Third, the IEA has cemented its position as a leading provider of data, analysis and policy advice on the global transitions to clean energy. This includes work promoting energy efficiency in developing countries, tracking clean energy progress toward global climate targets, and providing technology roadmaps to assist countries make sound policy and investment decisions. The high-level summit on investment in carbon capture, utilisation and storage at the 2017 IEA Ministerial – attended by energy ministers and CEOs of some of the world’s largest energy companies – is an important example of the role the IEA can play in this regard."
William Powell