PARIS — Flanked by his staff, Fatih Birol strides briskly along a narrow hallway before rushing into a nondescript conference room to a meeting he’s late for.
Along the way, the 65-year-old silver-haired Turkish economist passes an exhibit with photos of oil drilling, gas pipelines, enormous wind turbines, electrolyzers and fast-speed trains.
The display aptly depicts the fundamental transformation both the world and the organization Birol is leading, the International Energy Agency (IEA), have embarked on in recent years: the world in how it sources its energy needs; the IEA in how it does its job — and, more contentiously, how the latter can nudge the greening of the former.
The IEA, an intergovernmental organization, initially emerged as an energy security watchdog in the wake of the 1970s oil crisis. Today, the IEA also puts out reports on how countries can reach net-zero emissions by 2050, boost renewables and source critical raw materials needed for cleantech. Its work lands on the desks of prime ministers, CEOs and fund managers, and is considered the gold standard for policy planning.
Supporters applaud the IEA’s increased focus on how to tackle climate change, arguing the organization’s metamorphosis is in line with the changing needs of its members and of society at large. Critics, however, argue the IEA — through its messaging and assumptions — has strayed from its path, sliding toward unhelpful climate advocacy.
“It is true that we went through a transformation… but this doesn’t mean that we forget energy security,” Birol told Cipher in an interview between back-to-back meetings on the sidelines of the IEA’s 50th anniversary event in Paris last week. “It is like when you ask the kids when they are young ‘do you love your father or mother more?’ We love both of them. We address both energy security and climate change, and this can happen at the same time.”
The rich country club of oil importing nations, comprised of those in the Organization of Economic Co-operation and Development (OECD), created the agency in 1974 soon after the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo and caused prices to jump. IEA’s job was to prevent that from happening again through detailed forecasts and emergency response plans.
Fast forward half a century and the agency kicked-off its anniversary in the Parisan chateau headquarters of the OECD with a first-ever innovation forum focused on everything from green scooters to cleantech that can manufacture green steel or low-carbon cement.
“We all had to adapt to a changing energy landscape, including the IEA,” said Kate Dourian, who worked for the agency between 2015 and 2018 and is now a non-resident fellow at the Arab Gulf Institute in Washington D.C.
Speaking to an audience of hundreds during the two-day event, Birol outlined how the IEA has been critical in everything from helping Europe reduce its dependence on Russian gas to advising leaders at United Nations conferences on how to chart a way toward net-zero emissions.
Birol, who led work on the agency’s flagship World Energy Outlook report for 15 years before becoming IEA executive director, is often credited for the organization’s rise in stature.
John Kerry, the United States’ top climate diplomat, touted Birol’s “extraordinary job,” adding in a speech at the same event that the IEA “is now probably the principal arbiter or referee about many of the things we need to be thinking about with respect to our policies.”
Birol became the agency’s executive director in September 2015, just three months before the world agreed to the Paris climate agreement. Today, he is on his third term — an exceptional move for what is normally a maximum two-term mandate. In March 2022, IEA member countries were asked and ultimately agreed to this one-time extension, which expires in 2027, according to a document viewed by Cipher.
Birol was on the Time 100 list of the world’s most influential people in 2021 and French President Emmanuel Macron handed him France’s Legion of Honor in December.
“He has brought the IEA into the climate era — and he had to,” said Jonathan Stern, distinguished research fellow at the Oxford Institute for Energy Studies, who knows Birol well. “Without that, the IEA would have been considered increasingly less relevant.”
In a joint ministerial declaration following the Paris event last week, member countries said the agency evolved into an “IEA 3.0” under Birol’s leadership.
Birol didn’t hide his ambitions. In a profile in POLITICO shortly after he took on the job in 2015, he said he wanted to transform the IEA into an “international hub on clean energy.”
The Turk’s relentless drive and dedication helped put the IEA on the map, many officials Cipher spoke to on and off the record said.
“Can you tell me the name of any other IEA director before him?” asked a European diplomat who participated in the Paris event and who asked to remain unnamed to speak candidly.
Current and former colleagues describe him as smart, knowledgeable and meticulous, spending a lot of time on his slides and charts, making sure energy sources are represented in the right colors. He has good political intuition and a special sense for punctuating key messages in a media-savvy way, these colleagues said. He’s so respected in many circles, the thought of giving him advice is laughable.
“Advising Fatih? Do you want to get me in trouble?” laughed Damilola Ogunbiyi, a global advocate on energy access, when asked during a panel discussion at the agency’s event last week what advice she had for the IEA on how to boost clean energy investments in emerging economies.
Birol’s climate moves have also rankled some key energy players.
Just days before the 28th annual United Nations Conference of the Parties (COP) in the United Arab Emirates last year, Birol told the oil and gas industry it is “facing a moment of truth” about the role it plays in addressing climate change.
In a sharp response four days after, OPEC, whose members include the UAE, Saudi Arabia and Qatar, said the IEA’s messaging “unjustly vilifies the industry,” describing its messaging as “undiplomatic to say the least.”
Birol, who started his career at the oil cartel’s headquarters in Vienna, dismissed the idea that there was an exchange of words with OPEC.
“We never responded to anybody directly,” he said calmly. “We have taken with great honesty the criticism… even from a very small part of the international community.”
That criticism has been mounting lately, especially after the IEA forecasted last year demand for all fossil fuels will peak by 2030.
OPEC isn’t Birol’s only critic.
“[The forecast] feeds the myth that we don’t need investment in supply, we don’t need oil and gas investment,” Bob McNally, who served as a special assistant to George W. Bush, told Cipher in an interview just days before The Wall Street Journal published an op-ed from him lambasting the IEA on this very topic.
McNally, who is now president of the consultancy Rapidan Energy Group, which focuses on oil and gas market analysis, told Cipher IEA has “strayed from its security mission and it has become a lap poodle for climate zealots.”
What’s in a scenario
The turning point, McNally said, was in 2020 when the IEA removed its baseline business-as-usual scenario, known as the Current Policy Scenario (CPS), from its analyses. Instead, it replaced CPS with its Stated Policies Scenario (known in wonky circles as STEPS), which looks at governments’ existing policies but also stated measures under development.
This new scenario doesn’t look just at what’s already on the books, but also what the IEA assesses to be credible commitments governments are serious about implementing.
To most casual observers, this may seem like merely a wonky debate. But the change has real ramifications for outlining how the world could look in the next several decades.
It was under the STEPS scenario the IEA determined last October fossil fuel demand is set to peak this decade.
(This is wholly separate from a scenario the agency released in 2021 outlining a pathway to net-zero emissions by 2050, which found — controversially — no new fossil-fuel supplies would be needed.)
Critics like McNally say having a policy-neutral reference case is standard practice and removing it “blinds policy makers who are trying to estimate the cost and benefit of climate policies.”
Stern, of the Oxford Institue for Energy Studies, called the switch “logical,” since IEA members committed to achieving net-zero emissions. Dourian said “it’s not fair to say the IEA is tweaking data to suit an agenda.” The issue is sometimes in the messaging, she said.
“The problem has arisen in the way that Fatih Birol has presented the data, in a very sensational way, looking for the headline,” she added.
Tim Gould, the IEA’s chief energy economist, said the agency considered the value of keeping the “business-as-usual” scenario.
“How helpful is that?” he told Cipher in Paris. The STEPS scenario “allows us to give a much more meaningful sense of the direction of travel,” adding if government policies and commitments change, the STEPS scenario will also change.
For his part, Birol said he knows “some small minority of the consultants, some oil companies” may think the timeline for fossil fuel demand to peak may be too ambitious, but he said the IEA is not alone in its thinking.
“My suggestion to those consultants… is, in addition to IEA’s expectations, they should look at many of the majors oil companies’ expectations for 2030 and have another discussion,” he said. BP and Total Energies have been in line with IEA’s thinking.
Ironically, up until 2018, the IEA was criticized for not spotting the green transition early enough and for forecasts deemed too fossil-fuels friendly. This chart showing the disparity between solar energy growth and the agency’s predictions went viral as a classic example.
“The IEA has not gotten greener, but they’ve gotten much more observant and have more understanding of what the actual trends of the energy market really are,” said Maria Pastukhova, program lead on energy diplomacy at environmental think tank E3G.
The controversies around the IEA are natural since the organization has gathered more leverage, she said: “They are a political player and that’s why they’re more exposed to criticism.”
Publicly at least, Birol doesn’t appear phased by the criticism.
“This is our view, this is their view,” Birol said. “And we will see which one is better.”