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Its 2020 and the time is up on providing cover for Big Oil, Gas, and Coal. (Photo: Union of Concerned Scientists)

Its 2020 and the time is up on providing cover for Big Oil, Gas, and Coal. (Photo: Union of Concerned Scientists)

"Grand Coalitions" With Big Oil and Gas Won’t Solve the Climate Crisis

Simply put, there is no room for new fossil fuel production in a safer climate future.

Over the course of the last year and a half, we have been pushing the International Energy Agency (IEA) to stop giving cover to the oil and gas industry and model a fossil fuel phase-out that’s fully in line with our climate goals. As the world’s foremost energy modeller, their scenarios – most notably those in the annual flagship World Energy Outlook (WEO) – shape countless political and financial energy decisions each year.

In response to mounting criticism for its climate shortfalls, the IEA, lead by Dr. Fatih Birol, have clearly identified their solution to these critiques: a public relations effort that bears a striking resemblance to the spin coming from the oil and gas industry itself. This post takes a closer look at the IEA’s new spin, and why it’s a dangerous distraction from real solutions.

Why IEA scenarios are a big problem

Governments lean on IEA scenarios to justify approvals for major new fossil fuel infrastructure. The fossil fuel industry points to them to insist that their oil, gas, or coal will indeed be “in high demand” for decades to come. And investors use them to validate the hundreds of billions of dollars poured into new fossil fuel development annually.

So it is a very big problem that the scenario that the IEA chooses to feature in the WEO is one that tracks towards 3°C of warming and their climate scenario veers off course from meeting the Paris Agreement goals. It doesn’t hit net zero until 2070, 20 years too late according to the best science.

In 2019, for the first time, the IEA’s public release of the World Energy Outlook was met with serious scrutiny in the press. In fact, almost all mainstream media questioned the IEA on climate, and an ever-growing group of experts, academics, investors, influencers, and diplomats called the IEA out for the second time in a year for failing to step up on climate:

We urge you to do better. We fully understand that the IEA does not intend to define policy or investment decisions, but the fact is that the WEO is the globally authoritative publication on energy and energy infrastructure and it is used to inform significant investment and political decisions worldwide. As the WEO can become a self fulfilling prophecy, it carries a major responsibility that goes way beyond that of other publications that are merely descriptive. The IEA cannot be derelict of this responsibility.” – Excerpt from letter to Dr. Birol from energy experts and influencers. 

The IEA’s new “grand coalition” deflection

According to Dr. Birol, the IEA’s refusal to model a credible roadmap to staying within 1.5°C isn’t a problem. We need to step up action on climate, but what’s really needed is a “Grand Coalition” to do it. And the IEA head suggests that this coalition cannot succeed without a starring role for the fossil fuel sector itself – a talking point straight from Big Oil’s public relations playbook.

The perspective that Big Oil and Gas are on board to plan their own necessary demise is either impressive cognitive dissonance, revisionist history, or simple denial. As journalist Kate Aronoff sagely put it in response to a New York Times op-ed from the industry heavy “Climate Leadership Initiative:” “This would be a compelling argument if not for every single piece of available evidence.” This is a sector that has invested decades and unmatchable money into killing climate action

 

Ironically, the IEA’s own recent report on the oil and gas sector in energy transitions spawned one of the most compelling visuals of the sector’s current “commitment” to a cleaner energy future:  

The glaring reality is that major oil companies continue to actively invest against an energy transition. As the chart above depicts, they directed just 0.8 percent of capex on new projects towards renewables and carbon capture and storage in 2019.

The real story: no room for new fossil fuels

If you dig deep enough in the WEO, the IEA does briefly outline what would happen if the energy sector aligned with 1.5°C without overreliance on unproven negative emissions technologies: “oil demand would fall sharply through to 2050, following a trajectory closer to the decline in supply from fields already producing today.” This is a similar conclusion to our own analysis, which has shown that emissions from oil and gas in already operating fields and mines globally would push the world beyond 1.5°C of warming.

Simply put, there is no room for new fossil fuel production in a safer climate future.

But this is not a welcome message for the fossil fuel sector. In the WEO, the IEA carefully caveates its commentary by stressing the supposed impossibility and untenably high economic costs of aiming to stay within 1.5°C (as opposed to the manageable costs of the escalating climate crisis….?).

So instead, the plan to save the world according to the IEA comes from the same songbook as the fossil fuel sector itself: we need everybody from all parts of the energy sector to come together around solutions – as long as those “solutions” don’t get right to the point of actually phasing out fossil fuels. This type of strategy – ignoring power and pretending that everyone is showing up to the table with good faith or adequate solutions – has repeatedly failed the climate whilst protecting the status quo for the fossil fuel industry and its profits.

The IEA’s choice: a roadmap to ambition or a final hiding place for fossil fuels?

2020 has to be the year that the fossil fuel sector runs out of places to hide. Piece by piece, their cover is being blown: major public finance institutions are banning upstream investments on climate grounds, countries are putting an end to licensing new fossil fuel exploration and extraction, and civil society is mobilizing around crystal clear demands to end fossil fuel financing and expansion.

The IEA has a shrinking window to prove that it can serve its member states’ and other users’ needs with a scenario that would actually allow them to plan for success when it comes to meeting the Paris goals.

The fossil fuel sector has had more than half a century to prove it is prepared to take the climate crisis seriously. And it has done far worse than fail; it has knowingly and maliciously sabotaged solutions at every turn.

Its 2020 and the time is up on providing cover for Big Oil, Gas, and Coal. The IEA could start by swapping the Grand Coalition greenwash for a central scenario that serves the purpose of advancing climate action rather than dragging it down.

For more visit #FixTheWEO


© 2021 Oil Change International

Hannah McKinnon

Hannah McKinnon is a program director at Sequoia Climate Foundation, where she leads the Foundation’s work on oil and gas. Previously, she was a contributing writer for Oil Change International.

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