Jonathan Moylan investigates the murky world of vested interests behind the IEA's World Energy Outlook and its coal bias.
The IEA was established by wealthy countries in 1973, in the wake of the global oil crisis and is supposed to promote energy security, development and environmental protection.
Although governments should consider other sources, the IEA has become the most important input into government decision-making about energy.
The same claims of bad forecasts are also occasionally made about the Institute for Energy Economics and Financial Analysis (IEEFA) — an independent group of highly experienced analysts, who argue that the coal industry is in structural decline. One way of resolving this tension is to assume that the truth lies somewhere in the middle. But, of course, a far better way is to check their past predictions against observed reality and, by this measure, IEEFA is consistently very close and the IEA is somewhere out in the outer rings of Saturn.
In a world that has come to depend so strongly on energy, bad forecasts carry disastrous consequences for financial markets, international relations, war and peace, employment, social planning and, of course, climate change.
Which begs the question: why is the IEA so far off the mark? The answer might lie in their Coal Industry Advisory Board (CIAB), which was set up by the IEA to inform the agency about the future of the coal industry. However, rather than being made up of experts, like analysts, economists and futurists, the Coal Industry Advisory Board is made up exclusively of CEOs and very senior managers for companies that trade in coal, sometimes exclusively.
The Australian coal industry has four representatives on the advisory board, of whom Greg Everett, the CEO of Sunset Power, who owns the Vales Point Power Station at Lake Macquarie, is one. Vales Point spits out about as much carbon as Jamaica.
Peter Freyberg is the Head of Coal Assets at Glencore, which is the biggest thermal coal mining company in Australia. Glencore has been accused of violating Indigenous rights and poisoning rivers at the McArthur River Mine in the Northern Territory. Glencore also happens to be very good at avoiding corporate tax.
The last representative is Jeyakumar Janakaraj, the CEO of an outfit you may have heard of — Adani. Adani, of course, wants to build a massive toxic coal mine in Queensland and ship it through the Great Barrier Reef, with a free water licence in drought-stricken Queensland. Which begs the question: why does the guy who runs the company get to help write the most authoritative report in the world on the future of the coal industry? Nice work if you can get it.
' ... Rather than being made up of experts like analysts, economists and futurists, the Coal Industry Advisory Board is made up exclusively of CEOs and very senior managers for companies that trade in coal'
In defiance of the laws of thermodynamics, the information system driving decision-making around energy looks like a closed system, where the coal industry tells the IEA what it thinks demand for coal will look like in decades to come, the IEA tells decision-makers that coal will be around for decades, and the companies get to claim that the IEA supports their arguments. A generous way to look at it would be to assume that the industry’s subconscious biases are seeping into the World Energy Outlook. A more sinister view is that the industry is running a self-protection racket.
You would think that Department Secretaries, the Planning and Assessment Commission and the Queensland Land Court would research who writes these reports and work out whether their claims stack up. Unfortunately, given our tendency to wrongly attach weight to opinions coming from perceived authorities, communities challenging coal, oil and gas projects have to argue why their claims are more justifiable than the World Energy Outlook.
The reality is that, as IEEFA has repeatedly pointed out, coal is on the way out. The technology to power 100 per cent of the entire world with the power of the sun, the wind and the waves, is plummeting in cost and already exists today. What this means for coal-affected communities is that we deserve to be told the truth and to very quickly create a vision for the future of our communities. For financial institutions and companies related to fossil fuel companies, they need to develop a strategy to reduce their exposure to fossil fuels, starting immediately. Decision-makers need to take the WEO reports with a degree of caution. Governments at all levels need to significantly increase their ambition and action to get to a 1.5oC world. Citizens like us need to do what we do best and ramp up our efforts to force decision-makers to speed up the transition.
Last year, dozens of companies and governments moved away from coal because of people-powered movements and campaigns. It is far from enough, but we are getting bigger and better at winning. It’s time to get vested interests out of energy analysis. Those who stand in the way of progress have been warned.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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