Falling Oil Prices Upend Middle East Policies and International Energy Agency Agendas

Oil prices falling by half over the last six months upends the economies of oil-producing countries, including Nigeria, Russia, and many in the Middle East. What will the impact of lower prices be on U.S./Middle East policy, and on NCFCA affirmative debate cases? Researching oil policy is tricky because many organizations have biases that color their analysis and policy proposals.

A Google search for world oil production by country brings up a Wikipedia entry that begins: “According to the International Energy Agency (IEA), in 2011 the top ten oil-producing countries…”  Rather than rely on a Wikipedia entry, I went to the International Energy Agency (IEA) website.

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However, the IEA website lead story was: “United States must grasp opportunity to build sustainable energy system.” As viewers may guess from the IEA’s green logo, grasping “opportunity” is not about embracing vast supplies of shale oil and gas, but the opposite: “Quadrennial Energy Review and the Climate Action Plan were emphasised as mechanisms that can guide the US economy away from its reliance on fossil fuels and towards greater sustainability.”  (Image from IEA webpage on 12-22-2014.)

The IEA website this morning (1/5-2015) highlights: “A detailed look at policies and measures to decarbonise the energy sector.” Again the IEA ignores the astonishing increase in shale oil and oil sands production in the U.S. and Canada, and the reality that world oil prices fell by half in response. The IEA subheading of “Working together to ensure reliable, affordable, and clean energy” seems more to call for less reliable, less affordable, and arguably less “clean” wind, solar energy and other alternative energies. It is worth noting too that the picture of dark plumes rising against an orange sky from electricity plants is not carbon dioxide but instead water vapor. Water vapor is indeed the main atmospheric greenhouse gas, but the image suggests huge plumes of “carbon pollution” that must be dealt with my new energy policies. Should either greenhouse gas–water vapor or carbon dioxide–be considered pollution?

When world oil prices were over $100 a barrel and supplies unstable, expensive alternative energy seemed reasonable to private investors as well as green and economic conservatives. The U.S. was reliant on imports from Saudi Arabia and Middle Eastern countries in or on the edge of conflicts (Saudi Arabia, Kuwait, Iraq, UAE), and from African countries in turmoil (Libya, Nigeria). Billions paid for imported oil funded these authoritarian governments, plus the governments of regionally dangerous Venezuela and Russia.

But the oil sands and shale oil and and gas revolutions have shifted the story from oil dependency to oil innovation and surplus. The federal government is reported to soon be allowing oil exports, allowing still-expanding U.S. shale oil production access to world market. (On December 29, Brent Crude was $58 a barrel and West Texas Intermediate (WTI) was $53.5.)

Also on IEA website is link to video: “IEA message for youth on climate change: An IEA video specifically for our next generation of leaders.” The video begins with head of IEA noting she used to be a school teacher and wants to explain to world youth why the IEA’s mission now is stopping climate change, rather than energy reliability. After World War II, she says, fossil fuel energy was needed to rebuild devastated western economies. Now, though, that development is done it is time to replace fossil fuels.

As the video described progress in reducing poverty rates worldwide and increasing access to electricity, I was struck by an example of statistical claims being misleading.

World poverty reduction is given as justification for shifting IEA mission from energy reliability to reducing CO2 emissions and trying to address climate issues. IEA statement in video: “more than half of world’s population lived on less than one euro a day in 1981.”

World population in 1981 was 4.5 billion, so “more than half” was some 2.25 billion people in 1981 living less than one euro a day.

Next the video states: “today it is less than a quarter of the population.”  So with current world population of 7 billion, “less than a quarter” live on less than one euro a day. Doing the division, that leaves some 1.75 billion today living on less than one euro a day. The percentage progress is welcome, but for energy policy progress, the actually number of people living in poverty today should matter.

Far more people today live on planet Earth and more have access to energy and incomes over one Euro a day. But the reduction from 1981 to 2014 of actual human beings living on less than one Euro a day is 2.25 – 1.75, or 0.5 billion. Which is just a 14% reduction in the number of people, as opposed to the percentage of total world population.

It is a welcome 14% reduction, but I would argue that current IEA green energy policies have the effect of reducing the availability of inexpensive and reliable electricity from fossil-fuels. A Google search of “green energy policies reduce access to energy in poor countries” brings up page after page of articles claiming solar, wind, and other alternative energies will help reduce poverty in the developing world.

Adding “Judith Curry” to the search sentence brings up alternative articles and perspectives. Judith Curry’s Climate Etc. blog is a science-based source on climate issues. Curry is a leading climate scientist at Georgia Tech University’s School of Earth and Atmospheric Sciences. One of the top posts listed with this new search, Conflicts between climate and energy priorities, explains:

Our distinctly uncomfortable starting place is that the poorest three-quarters of the global population still only use about ten percent of global energy – a clear indicator of deep and persistent global inequity. Because modern energy supply is foundational for economic development, the international development and diplomatic community has rightly placed the provision of modern energy services at the center of international attention focused on a combined agenda of poverty eradication and sustainable development.

Another way to illustrate the problem of the IEA green energy agenda is presented by Hans Rosling in his TED talk “The magic washing machine,” which takes aim at energy policy and poverty reality.

This TED video, with nearly 2 million views, focuses on the huge slice of humanity that still doesn’t have access to enough electricity to power a washing machine. Just one billion live above the “airline,” with $80 a day to fly where they wish. Another billion lives above the “wash line” of $40 a day income. These two billion have access to reliable energy so women don’t have to wash clothes by hand. Another three billion have access to energy for light, but not plentiful enough to run washing machines. The bottom two billion earn less that $2 a day and their lives depend upon burning wood and dung for cooking and washing (both heavily polluting). So against the IEA/green energy claim of time to move on from fossil fuels stand some five billion people still without enough reliable energy to wash clothes. That’s a problem especially for the 2.5 billion women who still, like Hans Rosling’s grandmother, wash clothes by hand for their families.

In the video Rosling calls for more investment in green energy but he also calls out his green students who are proud to raise their hands when he asks how many ride their bikes to school. But when he asks how many wash their clothes without electricity, no hands are raised.

So, maybe the IEA should be honest and relabel itself the International Green Energy Agency (IGEA) and consider that it’s mission and audience are more suited to the golden 15% of world population flying above Hans Rosling’s airline.