OPEC Criticizes IEA's Forecast Over Peak Fossil Fuel Demand By 2030

The Organisation of Petroleum Exporting Countries (OPEC) slammed the International Energy Agency's (IEA) latest forecast of a peak in fossil fuel demand by 2030 on Thursday. According to OPEC, this forecast is not "fact-based," and it may jeopardise energy security by discouraging investment in oil and gas projects.
Photo: Economist Intelligence Unit.

In an op-ed published in the Financial Times on Tuesday, IEA executive director Fatih Birol predicted that demand for three fossil fuels, oil, gas and coal, will peak by the end of this decade. Birol wrote that the agency's estimates are based on "today's policy settings by governments worldwide," such as the expansion of renewable energy and the increasing use of electric vehicles.

According to new forecasts from the Paris-based agency, consumption of fossil fuels will begin to decline this decade due to the rapid growth of renewable energy and the widespread adoption of electric vehicles.

“We are witnessing the beginning of the end of the fossil fuel era, and we have to prepare ourselves for the next era,” Fatih Birol was quoted as saying by the Financial Times.

Birol also stated that large new fossil fuel projects risk becoming stranded assets, while admitting that some investment in oil and gas supplies would be required to account for declines at existing fields.

OPEC, on the other hand, said in a strong statement on Thursday that "consistent and data-based forecasts" do not support the IEA's prediction, accusing the agency of "being ideologically driven, rather than fact-based," Reuters reported.
"It is an extremely risky and impractical narrative to dismiss fossil fuels, or to suggest that they are at the beginning of their end ... what makes such predictions so dangerous, is that they are often accompanied by calls to stop investing in new oil and gas projects," OPEC said.

"Such narratives only set the global energy system up to fail spectacularly. It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world," OPEC Secretary General Haitham Al Ghais said in the statement.
The IEA prediction, according to OPEC, also does not take into account "the technological progress the (fossil fuel) industry continues to make on solutions to help reduce emissions." Neither has it acknowledged the critical role of fossil fuels, which "continue to account for more than 80% of the global energy mix, as they did 30 years ago."

The oil-producing countries said they would work with all relevant stakeholders to foster dialogue in order to contribute to global energy stability.