Fact Check: Did The IEA Call For An End To Oil And Gas Development?

Verdict: False

The International Energy Agency’s (IEA) new roadmap to a zero-carbon world lays out a potential path for the energy transition with suggestions – some more realistic than others – for how the planet could drastically reduce emissions and bring access to affordable, reliable energy to everyone.

Although many media latched onto the notion that the report represents a definitive path forward for the global energy transition, the IEA emphasized that’s not the case.

As IEA Executive Director Fatih Birol explained:

“The pathway laid out in our Roadmap is global in scope, but each country will need to design its own strategy, taking into account its own specific circumstances. Plans need to reflect countries’ differing stages of economic development: in our pathway, advanced economies reach net zero before developing economies.

“The IEA stands ready to support governments in preparing their own national and regional roadmaps, to provide guidance and assistance in implementing them, and to promote international cooperation on accelerating the energy transition worldwide.”

Birol further emphasized this during the Columbia Global Energy Summit this week:

“But this is A pathway. This is not THE pathway. And therefore, different governments with different backgrounds, different priorities may come up with PATHWAYS.”

Here are a few important facts to keep in mind when reading the report’s coverage:

#1. IEA does not call for an end to all oil and gas development.

Some media jumped at the opportunity to say the agency, long a reliable, unbiased source on all things energy, has finally called for the end of oil and gas development. Except it didn’t.

Saying, “No new oil and gas fields are needed” does not translate to no new oil and gas projects or a halt on production.

In fact, IEA acknowledges a need for these resources into the future in places where renewables aren’t viable options, to continue to provide feedstock for the thousands of goods that we rely on daily, and where carbon capture technology is used.

IEA is saying that, in its opinion, with the discoveries that have already been made, there’s enough oil and gas globally to meet these demands.

Source: National Oil and Gas Assessments

Prolific shale fields like the Permian and Appalachian basins or offshore developments in the Gulf of Mexico could continue to add new wells or the infrastructure to service them because they aren’t new fields and they have significant proven reserves.

As these existing plays are studied and the technology to access them continues to improve, the recoverable resource estimates have grown, which is why they are often referred to as generational plays that will produce for decades to come.

U.S. shale proven reserves increased by nearly 10 times over the past decade, according to the U.S. Energy Information Administration.

Reports by the U.S. Geological Survey show exponential growth in undiscovered, technically recoverable shale resources across multiple shale formations.

#2. Some of IEA’s suggestions are not only drastic but potentially unrealistic too.

While the IEA has clearly done its research – as one would expect from such an agency – some aspects of its roadmap are hard to see as a reasonable solution. For instance, the report “calls for annual additions of solar PV to reach 630 gigawatts by 2030, and those of wind power to reach 390 gigawatts,” further explaining:

“For solar PV, it is equivalent to installing the world’s current largest solar park roughly every day.” (emphasis added)

Further, the roadmap is relying on the development of technology that doesn’t yet exist:

“Most of the global reductions in CO2 emissions between now and 2030 in the net zero pathway come from technologies readily available today. But in 2050, almost half the reductions come from technologies that are currently only at the demonstration or prototype phase. This demands that governments quickly increase and reprioritize their spending on research and development – as well as on demonstrating and deploying clean energy technologies – putting them at the core of energy and climate policy. Progress in the areas of advanced batteries, electrolysers for hydrogen, and direct air capture and storage can be particularly impactful.” (emphasis added)

#3. IEA is relying on consumers and communities to willingly make significant sacrifices for its roadmap to work.

One of the key elements to the roadmap’s success is that the average person will change their behaviors for the greater good. This includes keeping homes cooler in winter and warmer in summer, taking colder showers, walking instead of driving, and traveling less:

“A transition of the scale and speed described by the net zero pathway cannot be achieved without sustained support and participation from citizens. The changes will affect multiple aspects of people’s lives – from transport, heating and cooking to urban planning and jobs.

“We estimate that around 55 percent of the cumulative emissions reductions in the pathway are linked to consumer choices such as purchasing an EV, retrofitting a house with energy-efficient technologies or installing a heat pump.”  (emphasis added)

And it’s not only consumers but communities and countries that will need to make economic sacrifices for IEA’s vision to work. As IEA explains:

“The contraction of oil and natural gas production will have far-reaching implications for all the countries and companies that produce these fuels.” (emphasis added)

IEA breaks this down further, explaining that not all of the lost revenues will be able to be recovered:

“Yet annual per capita income from oil and natural gas in producer economies falls by about 75 percent, from USD 1,800 in recent years to USD 450 by the 2030s, which could have knock-on societal effects. Structural reforms and new sources of revenue are needed, even though these are unlikely to compensate fully for the drop in oil and gas income.” (emphasis added)

#4. In IEA’s scenario, OPEC dominates global oil production – not the United States.

IEA’s modeling typically takes into account existing country-specific policies in order to forecast what the global energy demand and production mix will look like a decade-plus into the future.

Currently, the U.S. energy market has a lot of uncertainty from policies like the pause on federal oil and gas leasing, which impacts oil plays across the country.

While the United States is a global leader in oil production, IEA predicts that the market will eventually be dominated by OPEC at unprecedented levels:

“OPEC’s share of a much-reduced global oil supply grows from around 37 percent in recent years to 52 percent in 2050, a level higher than at any point in the history of oil markets.” (emphasis added)

Conclusion

As one can expect of IEA, the agency has laid out a thorough report that outlines potential paths to achieve the emissions reduction goals discussed by countries around the world. But as IEA also explained, this isn’t the definitive approach for any one country and it may not work for some.

While it is aggressive in some suggestions, what it does not do is suggest that by 2050 the world will cease to rely on oil and gas.

On the contrary, even in one of the most narrow approaches to date from a credible agency, it shows that oil and gas is a crucial part of our global energy mix and will continue to be even as the world transitions.

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