New report urges IEA to turn away from energy transition focus

By Valerie Volcovici

WASHINGTON (Reuters) -The International Energy Agency needs to revamp how it writes its annual energy outlook to reflect real-world scenarios, not to bolster its current focus on the global energy transition, according to a report released on Wednesday by the agency’s former oil director.

The report, named Energy Delusions, was written by former IEA oil director Neil Atkinson and Mark Mills, Director of the National Center for Energy Analytics, a think tank. The authors said it is aimed at influencing the new administration of U.S. President Donald Trump.

The Paris-based IEA has provided research and data to industrialized governments for more than half a century to guide policy on energy security, supply and investment.

However, its focus on a clean energy transition away from the use climate-warming fossil fuels clashes with Trump’s agenda of boosting the traditional oil and gas industries. The agency has also angered other global oil producer countries including Saudi Arabia.

Atkinson’s report identifies 23 assumptions made by the agency that led to what it calls a flawed conclusion that the global oil economy would peak by 2030, and no new oil and gas investment is needed.

The report says the IEA underestimates growth in emerging oil markets as well as in plastic and petrochemicals markets, and overestimates the pace of electric vehicle adoption.

“The promotional aspirations and flawed assumptions underlying IEA’s peak-demand scenarios have serious implications, given the obvious global economic and security considerations in planning for and delivering reliable, affordable energy supplies,” the report said.

The IEA said the report was “full of rudimentary errors” and “fundamental misrepresentations about both energy systems in general and IEA modelling in particular”, but said the agency welcomes ideas for improving its analysis.

“The report also incorrectly suggests the IEA’s oil demand projections are an outlier – in reality, the projections are well aligned with comparable scenarios of other organisations, including major oil companies,” the agency said in a statement.

In recent years the IEA has broadened its focus beyond oil and gas supply to include clean energy as member governments seek input on meeting climate goals.

That shift drew criticism from Republicans in Congress, and Trump’s campaign last year identified the IEA’s climate focus as an issue he could address as president. The United States provides around a quarter of the group’s funding.

(Reporting by Valerie Volcovici in Washington; Editing by Christian Schmollinger and Nia Williams)