Forecasts can be wrong. But it is one thing if the error is taken into account in the future and the quality of forecasting is improved. It’s another thing when analysts choose to ignore some piece of information in order to fit the current agenda or to promote a certain set of ideas.

Right for a mistake

A scientist has a duty to doubt. He must collect information, check it, double-check it. He must put forward hypotheses, hypotheses must grow into theories, but some theories will inevitably be discarded under the pressure of new data.

Ptolemy constructed a complex but consistent picture for his time, which allowed him to predict the movements of celestial bodies. Later the data which were saved up by scientists led to emergence of the heliocentric system formulated by Copernicus. The system was then improved by Kepler, who, however, could not fully explain the gravitational interaction between celestial bodies. Mathematically, the law of universal gravitation was formulated by Newton. But after that, contradictions were discovered that required new explanations, which led to Einstein’s general theory of relativity.

It did not mean that the Newtonian laws ceased to work. It meant that the area of our knowledge extended so that the scope of these laws was narrowed.
Scientific search can lead to full replacement of earlier settled representations or to their transition from the category universal in the category private.

Not only astronomy or physics, but also biology can be a striking example. Originally there was no idea of evolution of living beings. Then the notion emerged, but the mechanism by which evolution exists was not clear.

Lamarck’s ideas in the field of changes of live organisms from simple to complex were breakthrough, he truly assumed that external circumstances influence changes of living beings, but his opinion on the mechanism thanks to which these changes happen, was wrong. The breakthrough was the idea of natural selection formulated by Darwin. At the same time, scientific knowledge about heredity was developing, which led to the crisis of Darwinism, but later opened the way to modern ideas about the development of life on Earth. Somewhere at the intersection of this knowledge and the science of geology lies, for example, the theory of the organic origin of oil.

The science has the right for a mistake if it does not dare to stop doubting and rechecking — then the correct answer will be found, and our knowledge of the world around will extend.
But in the world there are researchers whose activity is externally very similar on scientific however its essence lies in absolutely other plane. These researchers are formally engaged in energy forecasting, but no sooner does even one major period for which a forecast has been made come to an end than the paradigm being promoted shifts decisively. And in new forecasts we observe not simply specifications which consider the data which are saved up by this time, we observe radical changes.

It would be possible to assume that simply the world changes so quickly that the previous convincing forecasts lose relevance under the pressure of discoveries and radical shifts in energy industry. But often at the heart of attempts to give a future picture at least on the next quarter of the century political expediency dominates, and the evidential base is under construction on the promise of the future breaks in the field of equipment and technologies.

Recognition of the mistakes by scientific community only strengthens trust to it as theories will be as a result specified, the accuracy of calculations will increase and our knowledge will extend. And numerous «mistakes» of some predictors, on the contrary, reduce trust, especially in case the new forecast, in fact, cancels the previous.

With a bias

The International Power Agency (IPA) is one of the oldest and most authoritative analytical organizations dealing with issues of world power. Its reports and forecasts are willingly quoted not only the world but also Russian mass media. Often even the strangest statements of representatives of agency are broadcast without any critical judgment. It is possible to give the actual charge to Russia made in September, 2021 as a striking example that our country is guilty of the world energy crisis.

Some bias of IPA towards interests of the countries — importers of energy resources was not a big secret for anybody. The bias is not a problem in itself. A problem is extent of its influence on activity of the organization.

If this influence is too great, the information products of such analysts may be too far removed from reality. But somewhere there is a fine line that separates an intentional error from an unintentional one. In the history of forecasts of agency for the last 20 years it is possible to allocate some accurately traced periods. Some were clearly about an honest attempt to make sense of what was happening, some were more reflective of «correct», socially approved themes, and some were clearly not trying to assess the future, but to shape it, to buck existing trends.

Threshold of «the Golden Age»

At the end of the XX century the International Power Agency very much worried because of «subsidizing of energy carriers» in such countries as China, Russia, the Republic of South Africa, India and some other the states (World Energy Outlook, Looking at Energy Subsidies: Getting the Prices Right). Most of them, by a remarkable coincidence, either later joined BRICS or want to join the organization.

Overall, during this period, the agency viewed China, its leadership, and its policy of openness favorably (Coal in the Energy Supply of China). And cancellation of power subsidies, according to analysts of IPA, had to promote «to achievement of three main objectives of a sustainable development: social security, environmental protection and economic growth».

The agency insisted that the funds allocated for subsidies could be redirected on social payments. Their cancellation had to lead to welfare growth «over time», and also to accelerate economic growth.

The countries of the Organization for Economic Cooperation and Development (OECD) which, among other things, achieved «progress in reduction of subsidies for consumption and energy production» were given as an example. Today it looks exclusively extravagantly, considering the sounding requirements (including from IPA) to the countries of OECD in general and the European Union in particular to strengthen support of the renewables (R). And the statement for progress of the countries of OECD in reduction of prices of energy carriers sounds at all provocatively after the period of an energy crisis which was for the EU especially painful because of «successful» reforms of the energy market.

Nevertheless the 1990s and the beginning of the 2000s were characterized by sharp increase in demand for gas in the European Union. In 27 countries entering into the EU today according to Eurostat, this indicator increased from 322 billion cubic meters in 1991 to 446 billion cubic meters in 2010. Looking ahead, we note that this was the peak demand for blue fuel in the EU, which has not been reached before or since.

The period of the most dynamic increase in demand came to the end in 2005 (442 billion cubic meters). Besides own production, at the beginning of the 1990s providing about a half of consumption in Europe, fell. No wonder that on this background IPA declined such players as Russia and Iran and such large economy as China to cancellation of «power subsidies».

Concerning China the International Power Agency wrote in July 2000 that by 2020 this country «can become, certainly, the largest economy in the world at par to purchasing power, and its GDP will make slightly less than a half of GDP of all countries of OECD together taken». Iran was considered as the possible supplier of gas on the market of Europe (within the Nabucco project). And our country represented by Gazprom from the first half of the 1990s developed new gas transmission corridors with the European partners. Actually, for this period «Blue Stream» and Yamal — Europe were constructed and also basic decisions on Nord Stream and South Stream were made (the last was transformed to «The Turkish Stream» later).

Consumption of gas grew in Europe and dependence on import because of falling of production increased the advancing rates. No wonder that in the 2000s there was an idea of «the Golden Age of gas».

«The Golden Age of gas»

In October, 2004 (World Energy Outlook 2004) IPA insisted that world production of traditional oil will not reach peak till 2030, «if necessary investments are made». Later, the agency went into guessing mode and, in an attempt to pinpoint the point at which conventional oil production would peak. In 2004 analysts of IPA noted about RES that their share in electricity generation in general will increase, having reached 6% in 2030. By the way, then to renewed energy sources freely referred also hydroelectric generation.

And, of course, the greatest growth of use of RES by 2030 was expected in Europe, «where they enjoy strong state support». Already by the beginning of the 2010s it became clear that the RES main market is China. And, amazingly enough, any state support something in the People’s Republic of China is actively blamed today. If Europe had remained in the lead, the success of the Middle Kingdom would have been looked upon more favorably.

Twenty years ago analysts of IPA still understood importance of hydrocarbon raw materials. They considered that natural gas will actively restrict coal in electric generation. The U.S. was then considered a major importer of blue fuel, along with Europe and Asia. By the way, IPA expected that by 2030 a little more than a half of all international trade in gas will fall on LNG.

This forecast has good chances to be realized.

But the main thing that approach of «the Golden Age of gas» was expected. It was supposed that by 2030 world consumption of natural gas in absolute expression «will increase more, than consumption of any other primary power source». Growth from 2622 billion cubic meters in 2022 to 4900 billion cubic meters in 2030 was predicted. The growing electric generation had to become the engine.

It may be noted here that in this form, the forecast today looks quite realistic. Moreover, according to IPA assessment, in 2020 consumption of natural gas had to make 4104 billion cubic meters. In reality the indicator was less (according to The Energy Institute, 3871.4 billion cubic meters). But, first, the difference is not essentially great. And secondly, we can adjust for the pandemic and anti-covid restrictions that negatively impacted consumption, and note that in 2021 gas consumption reached 4023.9 billion cubic meters. And here the International Power Agency could applaud for the relative accuracy of predictions. But there are two details — the European Union and China.

To swap places with Europe

IPA underestimated dynamics of increase in demand for gas in China. And it underestimated it by a factor of about three times. According to the agency’s 2004 analysts, the consumption of blue fuel in China was expected to reach 107 billion cubic meters in 2020 and 157 billion cubic meters in 2030. In reality in 2020s this indicator reached 336.6 billion cubic meters. And following the results of last year — about 400 billion cubic meters (estimates differ in not basic limits of 10 billion cubic meters). Then IPA considered the mistake and itself indicated it in 2014 (see «Golden Age» of gas coming to China, IPA says in latest five-year outlook), though overestimated dynamics of growth of own production in this country, and also underestimated its dependence on import in the medium-term forecast for 2019.

As for the European Union, the miss turned out opposite character. It was supposed that demand for gas in the EU will increase from 471 billion cubic meters in 2002 to 567 billion cubic meters in 2010, to 684 billion cubic meters in 2020 and to 786 billion cubic meters in 2030. If at a boundary of 2010 the divergence was insignificant (about 544 billion cubic meters, according to BP and Eurostat), further it only accrued. This was due to the Europe’s power sector lags behind the IEA’s 20-year forecasts. Demand practically did not increase. It was connected with long crisis which included Europe in 2009. Its signs are well visible according to industrial production in the EU.

If to take all countries of Europe entering into OECD, IPA expected that consumption of gas in them will increase from 491 billion cubic meters in 2002 to 807 billion cubic meters in 2030. Obviously, the likelihood of such a scenario materializing is vanishingly small. It is enough to tell that, according to Eurostat, consumption of gas in 27 EU countries in 2023 made a little more than 330 billion cubic meters.

The main thing is that twenty years ago it was assumed that Europe would be the driver of the global market. But in reality, it is China now.

But there was one more mistake which was made involuntarily by analysts of IPA. They did not consider a factor of slate gas.

Banality of «golden rules»

Slate gas loudly declared itself in 2009 against growth of production in the United States. A good form in world mass media and in expert community began to predict fast distribution of «slate» production worldwide. In fact, the success of American gas producers has led to the emergence of a new trend in global analytics, which the IEA could not resist.

In 2012 it published the report Golden Rules for a Golden Age of Gas. World Energy Outlook. Special Report on Unconventional Gas). As the name implies, the concept of the «golden age of gas» was still relevant, simply now it decided to add with a fashionable slate subject. If analysts carried out the analysis of consequences of slate gas production for the American coal miners, the Canadian gas workers and producers of LNG (for example, Qatar) and also if they corrected earlier sounded forecasts of demand in Europe, it would be the usual reasonable report. I don’t think it would be worthy of mention in our article.

Fortunately for us, the IPA took a different path. First, it reminded us that «natural gas is about to enter the golden age.» Secondly, this time it appeared that «the Golden Age» is connected not with deliveries from Russia and the Middle East (as it was supposed in earlier forecasts), and with nonconventional sources. Thirdly, it is enough to conform to IPA «golden rules», and practically any importer will be able to extract itself natural gas, satisfying the demand.

It is interesting that in the report the reasonable thesis was heard — «bright future of nonconventional gas is still not guaranteed». But its disclosure caused questions: it is necessary to overcome the numerous social and environmental problems connected with production of slate gas.

Of course, neither the overestimation of resources, nor the capital intensity of extraction, nor the lack of the technical base, nor other problems that could be encountered by those wishing to join the «slate» club could make the «slate revolution» a deeply localized phenomenon. It is enough to follow the «golden rules» and everything will turn out well.
The essence of these rules consisted in the following: observe production safety, inform the population on the work and minimize impact on environment (do not allow emissions in the atmosphere, the soil and ground waters).

At the International Power Agency so successful collection of incredibly fresh and extremely concrete ideas turned out that it deserved to the critic even in the largest world mass media. For example, the author of a column on the site Reuters noticed that «the report is generally made of the indistinct principles, so wide that they are almost senseless.»

Slate mistake

IPA supplied this report with the optimistic forecast according to which production of nonconventional gas (first of all slate) will increase by 2035 more than three times — to 1.6 trillion CBM. The caveat that «the main growth will occur after 2020″ formally gives chances for this forecast to materialize.

But the confidence of analysts of IPA that the volume of production of nonconventional gas in the European Union after 2020 will be sufficient to compensate the proceeding decrease in traditional production looks ridiculously. It is possible to refer, of course, to that part of the report in which it is told about low growth rates of «nonconventional» production if not to conform to the «golden rules».

The only problem is that the International Energy Agency has assumed that Poland would lead the slate gas trend in Europe. And in the same 2012 its slate project began to fall apart — the large international companies started leaving it, and the local geological service sharply reduced estimates of resources of slate gas. All this occurred before the publication of the thoughtful report of IPA therefore even at the time of an exit it looked at least improbably.

In other words, the problem is not that the International Power Agency did not anticipate the emergence of large-scale production of «shale» hydrocarbons. The problem is that it has treated this trend uncritically, with unwarranted enthusiasm and completely ignored the negative experience already accumulated by producers in the United States, as well as the latest data on the state of affairs in Europe. And, by the way, slate production at the moment in industrial scale is presented to the USA, China and partly — in Canada and Argentina. Europe did not master the «golden rules» MEA. Otherwise, of course, it would have it all worked out.

The End of «The Golden Age»

In 2023, the International Energy Agency, with its usual elegance, stated (in World Energy Outlook 2023) that it was not wrong about the «golden age of gas». Simply it fell on the 2010s and now «comes to an end». If in the 2010s world consumption of natural gas «increased on average almost by 2% a year», from 2023 till 2030 growth rates are slowed down and will make less than 0.4% a year.

It is connected with that on IPA assurances that «the energy sector and sector of construction <…> to which share falls 39% and 21% of the general demand», already endured peak of increase in capacities. It is remarkable that, as well as in 2012 with revaluation of production of slate gas in Poland, the agency in 2023 hurried with the publication of the forecast.

It surely proved that growth rates of demand for energy carriers will be low because of delay of economy of China. But the IEA’s estimate of the country’s economic growth immediately missed the mark. As soon as it wrote that this figure would increase by 4.9% in 2023, but a couple weeks later, a higher estimate (confirmed later in the year) of 5.2%.

Strained funeral of economy of China and fossil fuel became a sign of the new period in analytics of IPA — the period of low-carbon power.

Radical green

In the second half of the 2010s IPA starts advancing the radical concept of green power transition in which practically there is no place to fossil fuel with grace inherent in it, and the electricity made from RES will become the main source of energy.

Under this radical scenario (and contrary to humanity’s accumulated experience of energy transitions), the world would not only see the emergence of a new dominant energy carrier, but also the abandonment of old fossil fuels. «The future is electrified by means of low-carbon technologies”, declares MEA in World Energy Outlook 2018, “and demand for the electric power will grow twice quicker, than demand for energy in general.»

The International Power Agency declared that fights against global warming. Then it made comparisons of emissions which are made from different power sources, admired a climatic neutrality of RES. And it announced that photovoltaic and onshore wind farms onshore wind farms are completely competitive. It is remarkable that this thesis repeats with an enviable regularity nearly every year. Probably, at first these decisions became competitive and then — especially strongly competitive.

Is it any wonder that stories about competitiveness proceed up to the present moment and are followed by appeals to support and put pressure («innovative large-scale funding mechanisms for support of investments into environmentally friendly power in emerging countries are required » — World Energy Outlook 2023).

In the report Net Zero by 2050: A Roadmap for the Global Energy Sector which was issued in May, 2021, the International Power Agency insisted that the volume of annual investments into power by 2030 will grow to $5 trillion but only in case to conform to «golden rules»… oh, that is the road map prescribed by IPA.

There have already begun to be alarming assessments according to which the obligations for fight against climate change assumed by the governments even if fully implemented, will not allow bringing the global emissions of carbon dioxide connected with power to zero by 2050. In order to achieve this, it is necessary, according to IPA estimates, to increase the annual installed capacity of solar generation to 630 GW by 2030, and wind generation to 390 GW. This would be four times the 2020 level and only twice the level of capacity commissioning in 2023.

But here ways of radical gardening were followed by two questions. The first is what to do with economic problems of a number of large producers of the equipment (first of all — European). The second one is how to provide stability of a power supply system in which RES dominate.

The answer to the first question is simple — state support. The second is even simpler. It is hydrogen. After all, what could be simpler than hydrogen?

Simple hydrogen

The idea of hydrogen power is not new. IPA periodically addressed to it within the last 20-25 years. But the excitement around hydrogen began in the late 2010s, and a number of hydrogen strategies were adopted in 2020, for example, Hydrogen strategy of the European Union which at the moment catastrophically lags behind the planned purposes.

New trends got and into forecasts of IPA which notes that importance of a question of safety of power supply increases «as the world moves to the bigger electrification based on renewables».

A part of the answer to this question is hydrogen which is planned to use as «battery».

RES make electricity, the electricity goes to electrolyzers, electrolyzers split water on hydrogen and oxygen, hydrogen is used as the independent energy carrier. Power efficiency of this scheme is negative, but with the dominating share of renewable sources it suits for problems of stabilization of a power supply system, in the theory.

In practice, hydrogen energy is still stalled. So, according to IPA made in the last large report on the market of hydrogen «less than 0.1% [consumption] it is the share of new scopes of [hydrogen] in the heavy industry, transport or electricity generation». The total amount of consumption of hydrogen in 2022 made 95 million tons, 0.1% of this quantity — 95 thousand tons. The volume of the report of IPA on this subject is about 175 pages.

In other words, studying the hydrogen market is certainly a worthwhile endeavor, but the scope of the study inadvertently overshadows the fact that hydrogen energy is still in its infancy and that the market for «green» hydrogen is extremely undeveloped. Whether it will develop is a big question that the IEA tries not to ask. As well as in a case with slate gas, it is a priori supposed that this market it will be obligatory to develop.

But the agency makes socially approved statements that «the beginning of the end of an era of fossil fuel» can become heritage of a global energy crisis. Previously, IPA predicted that demand would not peak until 2030, but now the opposite is true — that global demand for coal, oil and natural gas will gradually reach «the highest point by 2030″. One can’t help but want to ask: at what point did you make a mistake? Aren’t you trying wishful thinking? Won’t radical green energy and the hydrogen bias forgotten like the «golden age of gas» and slate hydrocarbons? What will replace them in the authoritative and eagerly circulated forecasts?

To conclude, we quote OPEC Secretary General Haysam al-Ghais: «OPEC’s oil demand forecast for last year was the most accurate. Those who criticized it had to adjust their projections almost every month until they were on par with ours. Now we expect that in 2024 demand for oil will grow on 2.25 million barrels per day. <…> I expect, as this year our forecast will appear the most exact in the market». IPA, on the contrary, predicts increase in demand in 2024 less than on 1 million barrels per day.

If analysts play too much with political determinant of their activity, there can be at a situation, absolutely inconvenient from the diplomatic point of view. In March, 2022 the Organization of the Petroleum Exporting Countries announced that it would no longer use the International Power Agency data.