Every morning at 6am, Fatih Birol skips breakfast, pours himself five or six cups of Turkish tea, and prepares to face another day of disagreement and criticism.
The 66-year-old head of the International Energy Agency (IEA) has spent the past three years being increasingly blunt about the world’s need to switch from fossil fuels to clean energy, as carbon emissions continue to grow and global temperatures hit new monthly records.
In June, for example, the intergovernmental energy body’s chief said it was time for oil and gas companies “to look at their business plans”. The world is headed for a “staggering” glut of oil by the end of the decade if the industry continues to increase production, he warned, as the Chinese economy slows down and more consumers switch to electric vehicles, reducing demand for oil and gas.
Big Oil has responded with the wounded anger of a jilted partner. Birol, a former staffer at the oil cartel Opec, had as recently as 2017 urged the industry to pump more oil in order to stave off shortages. “Our message to the oil industry here in Houston is invest, invest, invest,” he said at the CERAWeek conference in January that year.
His change of approach has led some oil executives to privately suggest that Birol is playing politics and that the IEA, traditionally a source of neutral and dispassionate data and analysis on energy, is now partisan. “They should return to their focus on energy security,” says one oil company chief executive.
The IEA and Opec were once closely aligned on their energy forecasts, but now have vastly different views on the future of oil. The IEA believes the world will reach peak oil in 2029, consuming 105.6mn barrels a day. Opec, a cartel of oil-producing countries led by Saudi Arabia, sees no peak, with oil use rising to at least 116mn barrels a day in 2045.
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While the IEA is now focusing on how the world makes the shift away from fossil fuels, Opec believes abandoning oil and gas will destabilise the energy markets and lead to further crises.
The IEA has also become a political target in the US, which is producing record amounts of oil and gas. Republican senators have called for America to stop funding the IEA and former officials in Donald Trump’s administration say Trump will try to oust Birol if he is reelected.
“The next president should work . . . to end this progressive echo chamber and return the IEA to its original, non-partisan mandate of promoting energy security,” says Carla Sands, who helps to run energy policy at the America First Policy Institute, a body sometimes described as Trump’s “White House in waiting”.
“Taxpayer dollars should not fund an organisation that works against the interests of the American people,” she adds.
Birol argues that praise for the IEA’s work far outweighs the criticism. “Sometimes I take it personally, but I try to put it into context,” he says. “We have, I believe, beautiful goals to reach and to get there you have to get some bruises.”
The IEA’s forecasts matter. Governments, oil companies and investors rely on the agency as a trusted source on global energy to inform their policies and strategies. But its forecasts have faced criticism in the past from climate activists for not predicting the rapid rollout of renewables and are now being attacked by fossil fuel advocates as too supportive of the energy transition.
Birol, whose third term as executive director ends in 2027, insists the IEA is headed in the right direction: “I am very happy with the way we have chosen because the IEA is growing and the public is very happy.”
“The adjectives we use are a function of the numbers,” he says, referring to his language about the oil glut. By 2030, there will be 8mn barrels a day of surplus oil available, he says. “That has never been the case in history outside of Covid. We want to call things by their names and we don’t shy away from that.”
The transformation of the IEA under Birol has been dramatic. The intergovernmental agency was set up after the Arab-Israeli oil embargo in 1973 that sent prices spiralling.
Its mandate was to ensure energy security by providing data and analysis and managing a strategic reserve of its 16 members to respond to emergencies. Its World Energy Outlook, an annual report forecasting the energy landscape through to 2050, soon became a benchmark for policymakers and energy companies.
Birol, an economist who joined from Opec in 1995, started broadening the IEA’s world view when he ascended to the top job in 2015. Rather than London, Paris or Brussels, he chose to give his maiden speech in Beijing. “If an International Energy Agency does not have the major economies on board, does it deserve to be called ‘international’?” he says.
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Since then, the IEA has signed up another 15 countries as full members and 13 as associate members. This includes China, India, Brazil, Indonesia and South Africa, giving it inside data on 80 per cent of the world’s energy system and allowing it to give a global view on the tectonic shifts under way.
Birol says oil companies that dispute the IEA’s forecasts limit their perspective to western sources. “You cannot ignore what is happening in China,” he says.
For the first few years of his tenure, however, Birol stuck with the IEA’s traditions, producing a main forecast called the New Policies Scenario (NPS) that extrapolated the status quo in the energy world, without taking into account the pledges by countries in the 2016 Paris Agreement to reduce emissions in order to limit global warming to well below 2C and ideally to 1.5C above pre-industrial levels.
This suited the oil industry well. In 2017 the IEA was still forecasting that oil or gas demand would continue to rise all the way through to 2040 in all scenarios. Companies defended new oil and gas projects by noting the IEA’s figures.
Climate activists, meanwhile, accused the IEA of underestimating the growth of renewable energy and its potential to replace fossil fuels. “Even today they tend to be conservative about the speed with which cleantech costs fall and about the rate of deployment growth,” says Kingsmill Bond, an energy strategist at the Rocky Mountain Institute, a sustainability think-tank.
In 2018, Birol pivoted after the release of a special report from the Intergovernmental Panel on Climate Change (IPCC), which made it clear that the goal of limiting global warming to 1.5C was in danger. He decided that the energy sector, which is responsible for more than two-thirds of greenhouse gas emissions, needed not just analysis but also guidance.
“I had a meeting with my colleagues and I told them we needed to come up with a road map for how to transform the energy sector to be in line with 1.5C,” Birol says.
In 2021, months after the world’s energy use had plummeted because of the Covid pandemic and when it seemed a global reset might be possible, the IEA published a report on ways to achieve net zero carbon dioxide emissions by 2050.
The net zero scenario (NZE) milestones, which included wind and solar generation to quadruple by 2050, all new cars to be zero emissions by 2035, and no new oil and gasfields, were used by campaigners, policymakers and companies to adjust for the pace of transition.
“It’s much better to have a benchmark scenario for net zero, with sector-specific milestones, than not to have one. Before the IEA NZE, there wasn’t any widely accepted one,” says Simon Sharpe, the former deputy director of the UK’s COP26 unit and author of Five Times Faster.
The NZE has been used by the majority of large banks to work out their lending rules in order to align with the Paris agreement. This led to BNP Paribas, for example, saying it would not provide any financing to oil and gasfield development and to Barclays saying it would not finance any long lead time projects, although both banks continue to do other business with the oil and gas sector.
The IEA’s change in direction was a huge success for the agency. “The IEA has done very well out of it. It has gained a lot of supporters and been recognised for its leadership,” says Greg Muttitt, an energy researcher who wrote a 2018 report calling for the IEA to take more account of climate change in its models. “People felt like they needed some guidance on what it meant to align with 1.5 degrees. When there is a really obvious question, lots of people start asking it and the IEA was the obvious player to answer it,” he adds.
“I hear the complaints from the oil companies and Opec, but climate change is arguably the biggest issue facing the energy industry, so the idea the IEA should not focus on it and just look at oil supplies is quite bizarre.”
The agency’s pivot has also brought financial benefits. While its core budget, which stood at €61mn in 2022, has remained broadly stable, members pay “voluntary contributions” in exchange for advice on the transition and the IEA’s Clean Energy Transitions Programme generates an extra €20mn a year. With the extra money, the IEA has more than doubled in size. “When I took over, we were slightly more than 200 people. Now, with the same core budget, we are more than 420 people,” says Birol.
At the same time, the number of reports issued by the IEA has rocketed. In 2015, the year of Birol’s appointment, the agency put out just 37 reports. By 2022 it reached a peak of 197, or more than one every two days.
“A huge priority is establishing a platform for us to be able to respond [to requests for advice]. There’s a lot of stuff. And, it’s hard work,” says Tim Gould, the IEA’s chief economist. “Things are moving quite quickly now, around politics, energy, policy choices and deployment.”
The IEA believes its focus on the energy transition was further vindicated in 2022, when Russia invaded Ukraine and Europe lost most of its gas supplies. The crunch reinforced the agency’s argument that energy security and switching from imported fossil fuels to domestic renewable energy go hand in hand.
“There is a discussion about whether the IEA should choose energy security or climate change as its key priority,” says Birol. “When I was a child, our neighbours would always ask me this annoying question: do you love your mother more or your father more? And the answer is I love both of them. So I refuse to make a choice between energy security and climate change. We will focus on both.”
But now, after two years of high oil prices, Big Oil is flush with cash and refocusing its efforts on pumping more oil and increasing returns to shareholders.
In order to meet their net zero targets, some oil companies have pinned all their hopes on carbon capture, rather than cutting back production, a policy that Birol described as an “illusion” ahead of last year’s COP28 UN climate negotiations.
The industry is pushing back harder against the IEA’s forecasts, saying the agency is playing a “dangerous” game that may lead to spikes in energy prices if companies really do scale back their activities.
Forecasting peak oil demand by the end of the decade “is an unrealistic scenario, one that would negatively impact economies across the world,” wrote Opec’s secretary-general Haitham Al Ghais in June. “It is simply a continuation of the IEA’s anti-oil narrative.”
Other, similar projections have been proven to be wrong, he added: “The IEA suggested that gasoline demand had peaked in 2019, but gasoline consumption hit record levels in 2023, and indeed continues to rise this year. It also stated that coal demand had peaked in 2014, but today coal consumption continues to hit record levels.”
Senator John Barrasso, the most senior Republican on the Senate’s Energy Committee, says that if the IEA continues to base its modelling on wishful thinking it will put the world’s energy security at risk.
“The IEA’s models have a significant impact on investment and policy decisions. They must be fact-based, objective and free of an agenda other than the IEA’s core mission — energy security. If [the] IEA refuses to do this, all options are on the table.”
Alan Armstrong, chief executive of Williams, one of the
largest gas pipeline companies in the US, says the IEA should
“stick to the data and not try to build biases into their positioning”.
Birol and his staff reject any notion that the agency is anything other than a neutral observer of the data. “I think to say the IEA is political has a political motivation behind it because we are number driven,” says Birol.
Laura Cozzi, the IEA’s lead author on the World Energy Outlook, says researchers crunch data across all member countries for the report, assessing every new energy policy.
“You might be seeing a slowdown in electric vehicle [sales] in the US, but at the same time, the numbers are rising very fast in China. And we look not only at what is being sold but also at who is expanding their manufacturing. Investments that people are making,” she says.
“I am not aware of another model that is as comprehensive in terms of fuels, technologies, and all aspects of the energy sector, technology policies, investments.”
Birol says a lot of his recent hires have been from the oil industry: “When I ask them why they want to come to the IEA, they say ‘because I want to do something I am proud of’. This makes me very happy.”
László Varró, a former IEA staffer who now heads Shell’s future planning department, says Birol has a “strong ability to identify the issues that are really rising on the political agenda”.
“There is energy and climate-related work ongoing in other international organisations as well, but overall, in the energy policy field, the IEA has a unique proposition to governments,” he adds.
Perhaps the biggest challenge ahead, however, would be an antagonistic White House. The US is a major contributor to the IEA budget, and Donald Trump has promised to “drill, baby, drill” if he is re-elected as president.
One former Trump official says a future Trump White House would very likely question “the purpose of the organisation, the leadership of the organisation and the future of the organisation”.
Birol says that while he did not meet Trump during his first term as president, he feels that nothing can stop the energy transition.
“Of course, a political change in a government’s administration would have an impact on transition, slowing down here, accelerating there. But I believe that looking at the economic fundamentals and the technological trends, transition is now irreversible. The direction of travel is very clear.”
