• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 days They pay YOU to TAKE Natural Gas
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 2 days What fool thought this was a good idea...
  • 5 hours A question...
  • 5 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 11 days The United States produced more crude oil than any nation, at any time.
Groundhog Day for OPEC+

Groundhog Day for OPEC+

Ahead of a critical meeting…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

The IEA’s Climate Warnings Grow Louder, But Is Anyone Listening?

Fossil Fuels

Earlier this month the International Energy Agency had yet another dire warning for those concerned about the welfare of the planet. Natural gas demand, the IEA said, was improving faster than earlier expected and this could throw the world off the agency’s Roadmap to Net Zero by 2050.

The gas demand rebound was the result of the recovery in economic activity, the agency acknowledged as well as noting the strong growth in this demand expected in the near future would be due to natural gas replacing more polluting fossil fuels such as coal and oil in the electricity generating sector, among others. Still, this was not good enough for the IEA’s net-zero scenario.

“The rebound in gas demand shows that the global economy is recovering from the shock of the pandemic and that gas is continuing to replace more emissions-intensive fuels,” said Keisuke Sadamori, director of energy markets and security at the IEA.

“But stronger policies need to be implemented to put global gas demand on a path in line with reaching net-zero emissions by 2050 while still fostering economic prosperity,” the official added, noting this involved using gas more efficiently and promoting “cleaner and low-carbon gases”.

Now, the IEA has taken its net-zero roadmap as the target to follow but it needs noting that not everyone agrees this target is realistic. Under that scenario, the IEA said exploration for new oil and gas production had to stop now, this year. Yet just weeks after the release, the agency called on OPEC+ to increase production as demand for oil rebounded faster and stronger than the agency had apparently expected.

The agency then went on to say in its net-zero roadmap that the world needs to add more hydropower capacity in order to reach its net-zero goals. Hydropower already provides more clean energy than solar and wind taken together and accounts for a sixth of global electricity generation but we need more, the IEA said last month.

Related: U.S. Shale On Track For One Of Its Best Years Ever Meanwhile, California is struggling to secure enough electricity supplies for this summer, not least because drought has reduced its hydropower resources significantly. China, on the other hand, recently put online two huge hydropower projects. That happened despite environmentalist opposition that such projects affect ecosystems adversely. Opposition is emerging against solar projects, too.

What does this all mean for the net-zero goals of governments and agencies such as the IEA? For starters, it means they have got their work cut out for them. Renewable energy capacity additions ran at record highs last year amid the pandemic but now these are slowing down because raw material shortages are causing prices to soar.

Meanwhile, demand for oil and gas alike is rising fast as people start traveling again. Airlines, which last year languished under the weight of the pandemic, are now scrambling to meet soaring demand for their services. And analysts are talking about oil reaching $90 or even $100 per barrel.

Now, it’s the analysts’ job to speculate on oil prices based on all the known factors that affect it at any given time. Right now, we have a combination of internal discord in OPEC between the UAE and Saudi Arabia that adds uncertainty about supply at a time of rising demand. Naturally, prices would be going up. Yet what the current demand and supply situation also suggests is that lofty net-zero goals would be harder to achieve than their authors might like.

Related: Oil Price Plunge Continues Amid OPEC+ Deadlock

Governments are already pushing for more EV sales, some are even banning them, and subsidizing new wind and solar power capacity while retiring coal power plants and, in Germany’s case, nuclear plants as well for reasons unrelated to emissions. Still, oil and gas demand remains strong and even coal demand is strengthening, including in Germany.

At the time of writing, Germany, a frontrunner in the net-zero transition, was generating most of its electricity from coal, according to electricityMap. The same was true for the end of June. 

Great Britain, also an ambitious net-zero nation, was generating most of its electricity from natural gas. If these two need to rely so heavily on fossil fuels, then the IEA’s scenario for net-zero will be really challenging.


Efficiency is one way to overcome these challenges but efficiency gains, especially in mature technologies such as electricity generation take time. Encouraging gas producers to reduce their methane emissions—as a means of producing “cleaner gases”—is certainly a noble goal but this, too, will take time as well as investments that could push gas prices higher.

It is therefore easy to warn against rising fossil fuel consumption. It is much harder to suggest realistic alternatives to these fossil fuels that can compete with them on every indicator that matters, from cost to reliability of supply. Until such alternatives are developed, warnings of the sort the IEA is making are pretty much pointless.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Chad Gargano on July 11 2021 said:
    Listening, sure. Believing, nope. “But stronger policies need to be implemented to put global gas demand on a path in line with reaching net-zero emissions by 2050 while still fostering economic prosperity”. This is flawed comment: Coal accounts roughly 30%+ of electricity global production, gas second at roughly 25%. If share of gas use is reduced, coal use increases the same amount. Yet producing same energy using coal almost doubles CO2 emissions, and adds particle emissions to mix. Enforcing "Cleaner gas", like mixing in hydrogen or production of specific low CO2 gas adds to further cost, and is simply "use coal" vote. Realistic way to reduce CO2 in medium term would be to ensure cheap and plentiful natural gas, not to strangle it. IEA seems to be lead by fairy god mother and bunch of elfs.
  • TonyC on July 11 2021 said:
    No one is listening anymore about the fake boogeyman we have been hearing about for decades
  • Mamdouh Salameh on July 12 2021 said:
    The world doesn’t want to hear another la-la-land net-zero emissions 2050 roadmap from the International Energy Agency (IEA).after the ridicule and condemnation it received overwhelmingly from oil-producing countries around the world and international oil companies.

    Now the IEA is at it again but this time it is saying that the world needs to add more hydropower capacity in order to reach its net-zero goals. But doesn’t the IEA realize that this depends on levels of rain fall to fill the rivers and lakes? California is a case in point where drought has reduced its hydropower resources significantly.

    Renewables on their own aren’t capable of satisfying global energy demand now or ever. Energy transition needs huge infusions of natural gas and nuclear energy to succeed even partially. Another case in point is Germany which is a forerunner in the net-zero emissions and yet it is generating most of its electricity from coal.

    It is easy to warn against rising fossil fuel consumption but such warnings are pretty much pointless.

    Therefore, those who are calling for an end to fossil fuels should realize that there will neither be a post-oil era nor a peak oil demand either well into the future. They should also be aware that the notions of full energy transition and net-zero emissions are illusions.

    Neither the dogma of activism nor the IEA’s la-la-land net-zero roadmap could change these realities about fossil fuels.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News