We are addicted to fossil fuels, so let’s just accept it

So what’s going on? The IEA got it right this time. “The world is thirsty for energy,” says the 2025 edition of the World Energy Outlook, the flagship report released on November 12.

At the same time, he adds, “there is less momentum behind national and international efforts to reduce emissions than before.” An earlier draft conveniently placed the blame by noting that in some countries, particularly the United States, great emphasis was placed on preserving the energy status quo rather than changing it. This statement did not survive the drafting process; We can only wonder who Tipp came up with.

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The biggest hurdle is that demand for electricity is exploding as the world tries to electrify everything.

Gasoline cars are leaving, electric vehicles are coming; gas boilers are coming out, heat pumps are coming in, etc. Birol said in an interview that “the pace of growth is unprecedented” as new energy needs are added, from cooling and water desalination to data centers.

Solar and wind are struggling to meet a significant portion of growing demand, but nuclear, coal and gas are still needed. And oil continues to grow.

Taken together, this means that, at least for now, the energy transition is by addition rather than substitution, with renewables complementing fossil fuels rather than replacing them. Of course, addition and substitution are two stages of any transition; the first is a prerequisite step to achieve the second. But what the IEA has now mapped suggests the addition phase could take more than 25 years.

Every year, the IEA tries to imagine the future of energy by making big assumptions about economic development, population growth, political will, technological advances and prices. While the exercise is quite useful, it’s not even remotely close to being a prediction.

The agency had long used a basic model – the current policy scenario (CPS) – but it had significant shortcomings.

It has historically undercounted solar and wind energy and overestimated fossil fuels. Therefore, in 2020 the IEA stopped this, partly due to pressure from green campaigners, and replaced it with a policy scenario (STEPS) containing policy proposals “even if the specific measures required to give effect to these proposals have not yet been fully developed”.

In short, he confused politics with political promises. He added another, called net zero emissions (NZE), which maps out what is needed to limit global warming to 1.5 degrees Celsius.

Starting in 2023, this new emphasis on political targets has changed the way fossil fuel demand and carbon dioxide emissions are projected to peak consumption by 2029. This year, the IEA revived the CPS, in part due to pressure from the Trump administration.

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The scenario shows that neither oil nor gas demand will peak until 2050 at the earliest. Even the new edition of the STEPS scenario no longer shows peaks for oil and gas in this decade. Instead, peak oil demand is delayed by a year from “before 2030” to “around 2030,” and gas continues to rise until 2035.

Peak consumption has become the “holy grail” of the energy debate. But the exact year in which consumption arrives is much less important than the shape of the consumption curve before and after it reaches that target. Focusing on the path rather than the summit is crucial to understanding where the world is going.

These curves for oil show that demand is not far off from today’s level of around 100 million barrels per day. Consumption may rise slightly, reaching around 113 million barrels per day by 2050 under CPS, or fall slightly to 97 million barrels per day under STEPS, but it will not collapse on the cliff-hanger trajectory green campaigners hope for.

In my opinion, the most important message from this week’s report is that fossil fuel demand remains stable. Now that we know where we’re going, we can have a reasoned discussion about the benefits and costs of changing course.

Javier Blas is the co-author of “The World for Sale: Traders Bartering Money, Power, and the World’s Resources.”

Bloomberg