US Republican lawmakers attack IEA over energy security, peak oil forecast

Senior US Republican lawmakers have attacked the International Energy Agency in a strongly worded letter dated March 20 addressed to its executive director Fatih Birol.

A copy of the letter signed by Republicans John Barrasso, ranking member of the US Senate Committee on Energy and Natural Resources, and Cathy McMorris Rodgers, chair of the US House Committee on Energy and Commerce, accused the IEA of becoming an "energy transition cheerleader", according to a copy seen by S&P Global Commodity Insights.

"We would argue that in recent years the IEA has been undermining energy security by discouraging sufficient investment in energy supplies - specifically, oil, natural gas, and coal," the letter said.

"It should disturb you that biased parties are exploiting the IEA's forecasts and other products to advocate for policies that undermine energy security," the letter went on to say.

The letter will pile pressure on the IEA over its long-term oil demand forecasts in a US election year. The body established after the oil shock of the 1970s by industrialized nations has come under attack from OPEC and specifically Saudi Arabia for its forecast that oil demand may peak as early as 2030.

In addition, the letter calls on Birol to detail funding the IEA received from the US over the last 10 years.

Sources told S&P Global March 20 that US Republicans have been lobbied over the prospect of cutting federal funding to the IEA following the outcome of the US elections later this year. The Senate and House energy committees did not immediately respond to requests to elaborate on their concerns about the US' financial support of the IEA.

Another person familiar with discussions underway amongst Republican lawmakers said all aspects of US engagement with the IEA will be scrutinized, including its funding. Officials in Paris where the IEA is headquartered were unreachable for comment out of hours.

According to its website, the IEA's budget and work are agreed every two years with member countries permitted to make voluntary contributions. In 2022 following the conclusion of the COP 26 summit, the agency, which comes under the umbrella of the Organization for Economic Co-operation and Development, had received a Eur20 million ($22 million) funding boost from member countries to "scale up its work supporting the transition to clean energy in emerging economies."

Criticism of the IEA by Republican lawmakers comes after predictions of peak oil and the speed of transition away from fossil fuels were challenged by leaders of many of the world's largest producing companies attending CERAWeek in Houston. Amin Nasser, CEO of Saudi Aramco, set the tone on the opening day March 18 when he described calls to phase out fossil fuels to help avert climate change as a "fantasy". Fellow CEOs from companies including ExxonMobil, Chevron and Total also flagged concern over the speed of transition and the need for continued investment in oil.

The IEA's analysis and stance on the pace of energy transition and the future of fossil fuels have for some time rankled producers especially in the Arab petrodollar economies of the Persian Gulf. In 2021, Saudi Arabia's oil minister Prince Abdulaziz bin Salman described the IEA's flagship roadmap to reach net zero by 2050 as "sequel of [the] La La Land movie."

More recently, OPEC has challenged the IEA over its forecasting and energy transition advocacy. OPEC Secretary General Haitham al-Ghais last November accused the IEA of vilifying oil and gas producers through its analysis.