“We need the countries that have spare production capacity to tell the world they will be ready to bring more oil to the market. Saudi Arabia has proven that they are a responsible exporter. And I would be hopeful that they will once again show their constructive role in these difficult days.” (Fatih Birol, below)
The head of the International Energy Agency (IEA) has joined with the head of the U.S. Department of Energy (DOE) in urging global oil producers to produce more crude oil immediately to avoid more pain at the pump and elsewhere. Fatih Birol–previously anti-oil–has issued an energy crisis “red alert” not unlike a similar plea by Secretary Jennifer Granholm earlier this year.
We are on a war footing—an emergency—and we have to responsibly increase short-term [oil and gas] supply where we can right now to stabilize the market and to minimize harm to American families…. And that means you producing more right now, where and if you can….
And here is Birol’s plea, reported in IEA chief urges Saudi Arabia to pump more oil in energy crisis ‘red alert’ by Jon Yeomans (Sunday Times: July 2, 2022):
The head of the International Energy Agency has urged Saudi Arabia to pump more oil…. IEA executive director Fatih Birol warned that the world was on “red alert for economic recession” as energy prices surge, creating a global inflation crisis. He said the IEA had been urging Saudi and other members of the Opec oil cartel to go above and beyond their commitment last week to increase output by 648,000 barrels a day.
“We need the countries that have spare production capacity to tell the world they will be ready to bring more oil to the market,” he said. “Saudi Arabia has proven that they are a responsible exporter. And I would be hopeful that they will once again show their constructive role in these difficult days.”
…. Speaking from Paris, the IEA chief warned that Europe should prepare contingency plans in case it needed to ration gas this winter….
Birol held meetings with a series of G7 leaders in the Alps last week to press home the agency’s case that developed countries need to cut demand to tackle a crisis that has seen gas and petrol prices rocket; last week UK petrol prices topped 191p a litre. He said governments were considering IEA proposals such as cutting speed limits on motorways by 10kph to reduce petrol consumption.
The IEA chief described the current situation as “the first global energy crisis”, worse than the oil shock of the 1970s because it encompasses oil, gas and electricity. Birol said he was hopeful that the crisis would spur longer-term investment in “clean” technologies, but admitted that plans by China and India to ramp up spending on coal-fired power plants was a setback.
“If you build coal fired power plants, they will have a lifetime of 45-50 years. How we manage these measures on a temporary basis will be very important so that we don’t delay our net-zero ambition,” he added.
A tripartite boom in oil, natural gas, and coal is not just a 2022 phenomenon. It is a manifestation of energy density and the political power of consumer voters to maintain their standard of living in the face of a Green New Deal gone sour.
Fatih Birol, at war with energy reality, is trying to have it both ways. He should resign, to let a climate/energy realist lead the International Energy Agency. Even better, global governments should stop funding the IEA, an agency with an agenda gone wrong.
So, the message to oil producers is: “Spend billions today increasing production and refining capacity and we’ll put you out of business tomorrow.” Who could resist such a deal?