The International Energy Agency
By Paul Homewood
The IEA has been in the news recently, so perhaps it’s time we looked at what it exactly is and how it’s run.
This is what it’s website says:
Organisation and structure
What is the IEA?
The International Energy Agency (IEA) is an autonomous organisation that works to ensure reliable, affordable and clean energy for its 29 member countries and beyond. Founded in response to the 1973/74 oil crisis, the initial role of the IEA was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of the Agency’s work, the IEA has evolved and expanded to encompass the full mix of energy resources. It is at the heart of global dialogue on energy, providing authoritative and unbiased research, statistics, analysis and recommendations.
What were the main objectives of the IEA when it was founded?
- maintain and improve systems for coping with oil supply disruptions;
- promote rational energy policies in a global context through co-operative relations with non-member countries, industry and other international organisations;
- operate a permanent information system on the international oil market;
- improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use;
- promote international collaboration on energy technology; and
- assist in the integration of environmental and energy policies.
What is the relationship of the IEA with the OECD (Organisation of Economic Co-operation and Development)?
The IEA is an autonomous body within the OECD framework.
How is the IEA funded?
The IEA is funded by its 29 member countries and the revenue it generates from its publications. The 2016 annual budget is EUR 27 461 886. Assessed contributions for member countries are based on a formula that takes account of the size of each member’s economy. For 2016, revenues from the Agency’s publications will finance more than one-fifth of the annual budget. With the approval of the IEA Governing Board, countries and other energy stakeholders may make voluntary contributions to support and strengthen a wide range of activities in the IEA Programme of Work and Budget; in 2015, 29% of IEA spending was financed by voluntary contributions, most of which came from government sources although the Agency does receive some funding from private sources. The Agency also receives contributions in-kind, especially in the form of Staff on loan.
How is the budget managed?
The size of the IEA budget and the scope of its work (also known as the Programme of Work and the budget) are determined every two years by member countries. The IEA operates within the financial framework of the OECD. Independent external auditing of the Agency’s accounts and financial management is performed by a Supreme Audit Institution of a member country, appointed by the OECD Council.
Does the IEA dispense grants or make loans?
No, unlike the World Bank or the International Monetary Fund (IMF), the IEA does not dispense grants or make loans.
The Governing Board is the main decision-making body of the IEA and is composed of energy ministers or their senior representatives from each member country. The Governing Board holds three to four meetings at the Director General (or equivalent) level each year, at which it discusses global energy developments, as well as recent and future of work of the Agency, with the Executive Director and other senior Secretariat staff. The outcomes of Governing Board meetings are Conclusions, binding on all member countries.
The Governing Board also has final responsibility for administrative matters of the IEA, including approving the biennial Programme of Work and the budget.
Once every two years, ministers from member countries gather for the IEA Ministerial meeting. This meeting sets broad strategic priorities for the IEA, alongside directions offered at the regular meetings of the Governing Board. Although ministers may instruct the IEA to focus on a specific issue, the direction they provide also comes through the discussions that ensue at these meetings. Through the IEA Ministerial, the Secretariat develops ideas for existing or new work programmes, which it then discusses with member countries in various IEA committees and ultimately presents to the Governing Board for approval. The outcomes of each Ministerial are not fixed; however, some sort of political statement or communiqué is issued.
The 2015 Ministerial meeting, whose first plenary session opened with Mexico’s formal declaration of interest in becoming an IEA member, led to the activation of Association status available to non-member countries (with China, Indonesia and Thailand the first to have the status) as well as member countries’ declaration of an Energy and Climate Statement. The Chair of the Ministerial, US Energy Secretary Ernest Moniz, issued a summary at the conclusion of the meeting.
Although it claims to be autonomous, this is far from the truth. It’s members are countries, ie effectively governments.
Its Governing Board is composed of energy ministers, and the bulk of its funding comes from member governments.
It is hardly surprising then that its objectives, policies and strategies dovetail so closely with those of its member governments. As we have seen, it is quite happy to run a fervently pro-renewables agenda, even to the extent of putting out blatantly misleading press releases.
It is also significant that member countries have to be a member of the OECD, and as the list shows are nearly all well developed countries. Also note that most are EU nations, along with Australia, Canada, Japan, Korea, New Zealand, Norway, Switzerland, Turkey and the US.
Unsurprisingly the IEA mirrors the western world’s political viewpoint, and notably fails to protect or represent the interest of developing and third world countries.
You are no more likely to get objective and impartial information from the IEA than you would from the EU.