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The influential International Energy Agency (IEA) was once a valuable informational source on global oil supplies. Policymakers worldwide, as well as the petroleum industry, placed a lot of stock in its reports and projections. 

A new report by Sen. John Barrasso, R-Wyo., ranking member of the Committee on Energy and Natural Resources, details how the agency has evolved in the past few years into a political advocacy organization helping to advance the so-called energy transition.

This has undermined the objectivity of the agency’s forecasts, leading to bad energy policy, such as the Biden administration’s moratorium on liquified natural gas (LNG) export permits. It’s also negatively impacted the oil and gas industry, the report also argues. 

“It’s unfortunate they’ve intentionally changed the mission of this agency from what it originally was to just another narrative pusher. We’ve got plenty of those. Every major media organization serves that function,” energy analyst David Blackmon told Just the News.

Bad policies 

Beginning in October 1973, the Organization of Arab Petroleum Exporting Countries (OPEC), a cartel of major oil-producing countries, initiated an embargo on exports of crude oil, creating a “energy crisis” in the U.S. This was prior to the development of shale resources in the U.S., which has made the U.S. the largest global producer of oil and gas. In 1973, the U.S. was heavily dependent on oil from the Middle East, and the embargo drove up the price of crude oil nearly 400%. 

In the wake of the embargo, the United States and other oil-consuming allies established the IEA as an autonomous intergovernmental organization, tasked with ensuring the security of oil supplies. It also created a coordination mechanism by which nations could address vulnerabilities in oil supplies and respond effectively to supply disruptions and subsequent price shocks. As part of this mission, the agency provides forecasts of energy supply and demand. 

These forecasting documents “carry tremendous influence on the world’s collective perception of future energy trends. In doing so, they exercise enormous influence on energy policy, the investment decisions of public, publicly-traded, and privately-held companies and associated financing from public and private entities alike,” the report explains. 

Over the past five years, the report states, the IEA has placed greater emphasis on helping to advance an energy transition toward the goal of reaching net zero emissions by 2050, a goal that was endorsed by a vote of the agency’s governing board. 

Shift in direction

The report explains that this shift in direction politicized the agency’s forecasts. A profoundly impactful change, according to the report, was its decision to abandon in its forecasts a “business as usual” scenario. This scenario provided a baseline in which only policies that were already adopted and implemented were modeled. This was replaced with policy scenarios in which additional but unspecified policies are adopted to achieve net-zero policy targets, “no matter how realistic or aspirational those targets may be.” 

The “business as usual” scenario, the report explains, was necessary for evaluating the costs and benefits of energy and climate policies. Without that baseline, policies to address climate change have no such baseline for such an assessment. 

The report contrasts the IEA with the U.S. Energy Information Administration, a federal agency entirely separate from the IEA. The U.S. EIA forecasted robust global natural gas demand through 2050, but the IEA’s World Energy Outlook 2023 scenario projection had natural gas demand peaking this decade and declining thereafter. In enacting the pause on LNG export permit approvals, Biden administration officials cited the IEA forecasts, ignoring its own EIA data. 

“No one doubts the importance of U.S. LNG to the world energy economy. It is a perverse irony that an international organization established to boost energy security now produces ‘reference’ modeling scenarios that one of its founding members [the United States] is using to justify a policy that undermines energy security,” the report states. 

From overly optimistic assumptions of EV adoption rates to a failure to consider critical mineral sourcing needed for a green energy expansion, Barrasso’s report highlights several examples of poor policy decisions inspired by the IEA’s biased forecasting. 

Influence on oil and gas investing

Besides the impact on policymakers, the agency’s forecasts, the report argues, are “tailor-made” to “discourage investment in oil and gas while promoting decarbonization targets few believe will happen.” 

In May 2021, the IEA launched a roadmap to reach net zero by 2050. Fatih Birol, executive director of the IEA told The Guardian that “there will not be a need for new investments in oil and gas fields, or new investments in coal mines.” He made similar remarks to The Financial Times in 2023. The report warns that statements like this could lead to underinvestment in oil and gas production and infrastructure, creating future energy shortages. 

According to Blackmon, the energy analyst who publishes his work on his “Energy Absurdities” Substack, these forecasts also discourage lending institutions from considering oil and gas projects.

“When Fatih Birol said that everybody needs to stop investing in the discovery and development of new oil reserves, that made it harder for every company to get financing for major new projects,” Blackmon said, as institutions viewed the investments as much more risky. 

The IEA has also, according to the report, stated openly that it seeks to undermine investments in oil and gas. In a 2024 communique, the agency announced that it intends “to mobilise and diversify additional necessary investment in the energy sector, and to achieve a fully or predominantly decarbonised electricity sector by 2035.” This includes supporting “efforts to make financial flows for the energy sector consistent with the financial commitments and goals under the Paris Agreement,” referring to a 2015 international agreement to reach net zero emissions by 2050.

The report also details how anti-fossil fuel groups have pressured the IEA to bring its forecasts in line with their political agenda. Oil Change International, which is funded by the staunchly anti-fossil fuel advocacy foundation the Rockefeller Brothers Fund, issued a report in 2018 accusing the IEA of undermining a transition away from oil, gas and coal. The group even launched a campaign in 2019 to pressure the IEA to align its energy forecasts to align with the goal of net zero emissions by 2050. 

The report provides other examples of climate activist groups across the globe spending millions of dollars to lobby the IEA to advance an anti-fossil fuel message. The report also notes that these campaigns were successful. The IEA produced a net zero roadmap in 2021, and its forecasts abandoned a “business as usual” baseline scenario, replacing them with baselines that the activists wanted. 

Back to the mission

By continuing to produce biased information driven by anti-fossil fuel activists, Barrasso’s report explains, the agency’s credibility is gradually declining. “It risks losing the confidence of many of its members and much of the public who follow these issues. Once trust is lost, it is very difficult to recover. It is troubling that a politician can state, as French President Macron did, that IEA is “the armed wing of the Paris Agreement” without any word of dissent from IEA,” the report warns. 

The report offers a few proposals for the IEA to return to its original mission of producing objective reports that help secure global energy supplies. This includes reinstating the “business as usual” policy scenario as a baseline for its modeling scenarios, which can be used to assess the cost and benefits of competing policy proposals. 

The IEA, the report argues, should also be more wary of cautioning companies about oversupply, and it should be more transparent with its data. Many of the reports from the taxpayer-funded agency are only made available with an additional cost. This limits public access and scrutiny of the agency’s forecasting. 

Lastly, the report warns that cheerleading the energy transition without considering the security implications of that transition undermines global energy security. “China, Russia, Iran, North Korea, and Venezuela pose challenges both old and new to world energy security. A strong, unbiased IEA can help us navigate these challenges, but only if it has the confidence of its members,” the report concludes. 

The incoming Trump administration won’t likely champion net zero by 2050 goals. Blackmon said that defunding the IEA would take an act of Congress, which is unlikely to have the votes to pass. However, President-elect Donald Trump could possibly attach strings to the funding or in other ways pressure the agency to return to its original mission. 

“It’s just a matter of how much political capital the President wants to spend on it,” Blackmon said.