Powerplays, politics and panic - has BIG OIL wrestled back control?

For more than twenty years during the nineties and early two thousands the International Energy Agency or IEA published a report called the Annual World Energy Outlook. And each year those reports contained projections of more or less linear growth for solar power that, at least according to this industry analyst, weren’t just wrong, they were almost laughably wrong. Now, as an organization that was originally created back in the early nineteen seventies with the specific objective of co-ordinating collective global responses to major disruptions in OIL supply and ensuring energy security through the stockpiling of fossil fuels, it is perhaps not surprising that their slant on renewables was less than rosy. But THEN, just ahead of the COP 26 climate conference in Glasgow in 2021, the IEA published a new report called Net Zero by 2050 And the organisation’s Executive Director, Fatih Birol, said this “As of this year there is no need for new fossil fuel supply investments That appeared to mark something of an epiphany for the group and sure enough their World Energy Outlook report for twenty-twenty-THREE showed renewable growth projections that were starting to look a bit more plausible. That did not sit well with the ideological zealots of the incoming Trump administration in the USA of course, and as soon as they had the chance, Trump’s minions were at the throats of the IEA’s leadership, urging them to cease their work promoting the global shift to clean power and net-zero carbon emissions, and instead to start pushing fossil fuels again. And would you believe it, by sheer coincidence, in March twenty-twenty-five, Mr Birol made a speech at an energy conference in Houston, Texas where he said this I want to make it clear... there would be a need for investment, especially to address the decline in the existing fields. There is a need for oil and gas upstream investments, full stop," And now, the International Energy Agency has published it’s twenty-twenty-five World Energy Outlook report. So, what are they telling us this time then? Hello and welcome to Just Have a Think, The leadership of the IEA have faced severe criticism in recent years, both from the powerful men that control the world’s fossil fuels, who say they are betraying the organisation’s core mission, AND from energy industry analysts who say they’re ignoring the evidence that’s right in front of their eyes. It’s a very difficult tight rope walk for Mr Birol and his colleagues, and I must admit I’m very glad I’m not one of them. Nevertheless, given that they’ve gone to all the trouble of producing another weighty tome, it seems only reasonable to have a quick squint at it to see what it contains. And right off the bat, we’ve got some very clear hedging of bets in the Executive Summary. “There is no single storyline about the future of energy” it states “which is why the World Energy Outlook presents multiple scenarios, none of which is a forecast” Those multiple scenarios now once again include one called The Current Policies Scenario or CPS. The IEA always used to include CPS, until it quietly removed it back in twenty-nineteen in an attempt to focus on more ambitious projections based on countries’ policy pledges to increased growth in technologies like solar, wind and batteries, and electric vehicles. But now, under severe pressure from our friends in the fossil fuel industry, the CPS chart is back. Alongside the Current Policies Scenario, the report gives us the STATED policies scenario or STEPS. These are all the measures that national governments pledged to put in place at some point in the future … almost definitely, probably at some point, maybe probably in the future…probably. And then we’ve got the Net Zero Emissions by 2050 Scenario, or NZE, which is the pathway that the world actually needs to follow if we are to have any chance at all of reaching atmospheric carbon neutrality by mid-century, thus avoiding the catastrophic environmental, geo-political and socio-economic consequences that would otherwise ensue and that would most likely lead to levels of global instability, food and water scarcity and societal upheaval the like of which our modern Holocene era civilisation has never before witnessed. You know…net-zero – the one the UK’s Reform Party calls Net Stupid Zero and Trump’s Department of Energy recently commented on by saying “Net Zero 2050 is a sinister goal. It’s a terrible goal” The fossil fuel industry hates that scenario and as I mentioned earlier it also really resented the previous omission of the current policies scenario, which is why so much pressure was brought to bear on the IEA to reintroduce it. And you can see why. Under the Stated Policy Scenario, oil demand peaks around twenty-thirty, and gas hits its maximum around twenty-thirty-five. By contrast, back over on the Current Policy scenarios page, while coal demand drops off a bit, oil and gas demand doesn’t peak at all, continuing to rise all the way up to twenty-fifty. And if the fossil fuel behemoths have their way, that demand will keep trundling on

long after that. Of course, what those billionaire oligarchs, and arguably the IEA themselves, don’t appear to be factoring in here is the fact that on that trajectory there may not be a coherent global market to sell into anymore anyway, largely as a result of the damage those increased fossil emissions will have caused by then. But that is probably an entirely separate video’s-worth of ranting, so let’s not go there now, eh? So, what about renewables growth then? Well, the IEA tells us that wind and solar met around a fifth of electricity generation in advanced economies in twenty-twenty-four. In their Current Policies Scenario that rises to one third in those economies by twenty-thirty-five and to forty-five percent in China, with emerging markets and developing nations seeing the most rapid growth. The Stated Policies scenario takes the advanced economies share to forty percent, China to fifty percent, and developing nations to almost twenty-five percent, as market reforms and additional investment in grids, flexibility and storage start to overcome the infrastructure bottlenecks that many nations are facing today. Industry analysts Wood Mackenzie, who recently published their own Energy Transition Outlook report, provide us with this chart projecting that global solar power capacity will double by twenty-thirty, overtake GAS by twenty-thirty-three and overtake COAL by twenty-thirty-four. The WoodMac team use similar scenario cases to the IEA and they’ve calculated that the energy transition represents a one-hundred and thirty to one-hundred and seventy-five TRILLION US dollar investment opportunity between now and twenty-sixty. Another well respected industry analyst is Rystad. They published THEIR annual Global Energy Scenarios report in October and they too see an extremely rapid growth in renewables, projecting that they will provide 7:08 fifty-five percent of global power generation in ten years’ time. Rystad also offered perhaps the clearest commentary of all three reports on this Primary Energy Fallacy thing that we’ve all been hearing so much about recently. While primary energy peaks and starts to drop off, they say, USEFUL energy consumption actually grows through to twenty-fifty. And they explain that that’s because today’s energy system is highly INEFFICIENT. “To deliver the energy services necessary to support economic development and wellbeing, we do not need to replace all primary energy”, The report tells us. “only the useful share that actually powers economic activity. ” “As renewables and electrification accelerate, losses fall dramatically. Electric motors are three to four times more efficient than combustion engines, and new heat pumps deliver three to four units of heat per unit of electricity. 8:00 These technological shifts” Says the Rystad report “fundamentally change the conversion 8:06 efficiency of the global energy system. ” This fundamental shift in energy conversion efficiency as a result of widespread adoption of renewables, and electrification of just about everything is extremely good news indeed and is probably the only thing giving us humans any chance at all of staggering through this century with any kind of recognisable societal infrastructure still intact. But of course, the world has changed dramatically even in the twelve short months since the IEA published their last World Energy Outlook in twenty-twenty-four. Not just in the rapid rise of populist regimes all over the place, which appears to be putting a bit of a brake on necessary progress, but also in the emergence of new crypto currencies and of course the dreaded AI and large language models and chatbots and all of that stuff. All of which, we’re told, consume enormous quantities of energy. Apparently if you sit at your computer and ask Chat GPT to draw you a picture, your local electricity grid operator has to ask a nearby factory to shut down for half an hour. I might have made that last bit up, but you get the idea. In the IEA’s STEPS scenario, over the course of the next decade total global energy demand is projected to increase by an amount roughly equivalent to the current energy demand of the entire European Union, driven partly by AI and data usage including for all those crypto currency transactions, but also through the electrification of cooking and other household appliances, cooling via air conditioning, and the transition to electric vehicles. And then there’s the whole question of energy security & critical minerals, which is a major theme of this year’s report. International energy trading links are under pressure as a result of geopolitical fragmentation, and critical minerals in particular, which underpin renewables, batteries, EVs, grids and most other technologies in our modern world, have shown themselves recently to be an area of real vulnerability as China tightens its grip on those commodities. There’s also the risk of physical attacks on infrastructure like undersea cables by authoritarian warmongers and cyberattacks on data systems by spotty teenagers... AND authoritarian warmongers! It’s a complete minefield! And while many technologies are advancing

the IEA report, and for that matter the WoodMac and Rystad reports, all point out that, for reasons we’ve already discussed, momentum behind mitigation has slowed compared to past years. Despite that, and despite the fossil fuel brigade pressuring the IEA to water down the messaging, the conclusion of this year’s World Energy Outlook report remains clear and stark. The risk of SURPASSING one-point-five degrees Celsius of warming before LATER stabilisation is now higher than ever, it tells us. In fact, some would say it’s now inevitable. The longer we delay, says the report, the harder and more expensive adaptation and resilience will become. Governments and investors need to step up policies and frameworks. Because “business as usual” as shown by the re- introduced ‘Current Polices Scenario, leads to clearly sub-optimal outcomes: insecure supply chains, higher costs, and more fossil fuels locked-in. Diversification of supply chains, especially for critical minerals, is therefore urgent, with reliance on a small number of suppliers and regions now showing itself to be a major vulnerability. And the transition will need more INVESTMENT, not just in generation but also in the infrastructure of grids, energy storage, smart systems and resilient networks. Without that investment there is a very real risk of stranded assets, the report tells us. So, there’s been major progress, but my goodness there is still an awful lot to do. I’m sure you’ve got your own views on this one. Maybe you even have experience working with or for the IEA themselves. If you have, or if you just want to voice your opinion on the subject, then, as always, the place to leave your thoughts is in the comments section below. That’s it for this week though. Don’t forget to like and subscribe if you enjoyed the video. It’s just a simple click that doesn’t cost you a penny, but which really does make a massive difference to our ability to operate effectively here on YouTube. And you can also directly support me in producing my weekly videos by joining the amazing folks over at Patreon dot com forward slash just have a think who enable me to keep everything going AND keep ads and sponsorship messages out of your way, Most important of all though, thanks very much for watching! Have a great week, and remember to just have a think. See you next week.