The IEA was born with the 1973-1974 oil crisis, when industrialized countries found they were not adequately equipped to deal with the oil embargo imposed by major producers that pushed prices to historically high levels.
This first oil shock led to the creation of the IEA in November 1974 with a broad mandate on energy security and energy policy cooperation. This included setting up a collective action mechanism to respond effectively to potential disruptions in oil supply. The framework was anchored in the IEA treaty called the “Agreement on an International Energy Program,” with a newly created autonomous agency hosted at the OECD in Paris.
The IEA was established as the main international forum for energy cooperation on a variety of issues such as security of supply, long-term policy, information transparency, energy efficiency, sustainability, research and development, technology collaboration, and international energy relations.
The IEA’s founding members were Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, Norway (under a special agreement), Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States. They were followed by Greece (1976), New Zealand (1977), Australia (1979), Portugal (1981), Finland (1992), France (1992), Hungary (1997), Czech Republic (2001), Republic of Korea (2002), Slovak Republic (2007), Poland (2008), Estonia (2014), and Mexico (2018).
Henry A. Kissinger in the 35th Anniversary of the International Energy Agency, Paris, France- October 14, 2009 said: “Without more fully integrating additional countries that will have an increasingly important role in shaping the global energy system of the future, the IEA risks becoming outdated, irrelevant, and unable to effectively accomplish even its historical objectives. Notice that I said countries shaping the global energy system of the future, rather than just consumers. The IEA has never been solely a consumers’ club. If we consign it to such a future, it will be less able to accomplish its core objectives. In addition to the rising consumers, the IEA must also engage global energy producers, who most assuredly also share a stake in secure and stable energy markets. Participation in a regular dialogue that includes key consumers and producers, through existing channels or new ones, may provide valuable opportunities to address our common issues.
During the recent years, the main objectives of the IEA fall into three main categories. The first is energy security which includes promoting the diversity, efficiency, flexibility and reliability of fuels and energy sources. The second is economic development, including support for free markets to foster economic growth and efforts to eliminate energy poverty. The third is environmental protection, which involves analyzing policy options to offset the impact of energy production and use on the environment, especially climate change and air pollution.
The IEA is formally established as 16 countries sign the Agreement on an International Energy Program on 18 November in Paris. The Governing Board holds its first two meetings, adopts the Decision on the Program which incorporates the I.E.P. Agreement into IEA internal legislation, establishes the organization and operating policies of the Agency and develops the Agency’s work program for the first year. The Governing Board appoints Dr. Ulf Lantzke as the IEA’s first Executive Director. IEA activities concentrate on the establishment of the Agency and on initial measures to implement the agreement.
The first IEA Ministerial Governing Board meeting reviews the world energy situation, sets guidelines for the Agency’s future work, and outlines the basis for long-term cooperation on general energy policies and energy RD&D.
The Agency establishes itself in the OECD’s new building in Paris. Mr. J. Wallace Hopkins is appointed Deputy Executive Director of the Agency. New Zealand joins the IEA. Norway agrees to participate under the terms of a special agreement. The I.E.P. Agreement is ratified by ten members. IEA countries commit themselves to reduce their total expected oil imports in 1975 by two million barrels a day through conservation, increased oil production, and fuel-switching. The Industry Advisory Board (IAB), composed of senior executives from fifteen private and state oil companies, is established to advise the Agency on the oil Emergency Sharing System and to assist in testing and operating the System. IEA countries agree to increase their emergency oil stock holding commitment from 60 to 70 days of net oil imports by the beginning of 1976. The Agency develops the oil emergency information system. Five RD&D agreements are signed in the field of coal technology — the first energy RD&D collaborative projects to be carried out under IEA auspices. The Governing Board adopts the IEA strategy for energy RD&D. The Agency’s general oil information system is established, together with the permanent framework for consultations with oil companies on general and specific aspects of the oil market.
The Agreement on an International Energy Program, the treaty which established the Agency in 1974, officially enters into force on 19 January, after ratification by eleven Members. The Governing Board approves the IEA’s Long-Term Cooperation Program to encourage Members to reduce their dependence on imported oil through greater use of alternative energy sources and structural changes in their energy economies. The Board also establishes medium and long range goals for reducing IEA oil imports. The IEA completes its first comprehensive review of energy conservation programs in Member countries. Greece joins the IEA. The IEA conducts its first test of the emergency oil-sharing system (AST-1).
IEA countries agree to increase their emergency oil stock holdings to 90 days of net oil imports by the beginning of 1980. The IEA participates as a permanent observer in the Energy Commission of the Conference on International Economic Cooperation held in Paris.
The second IEA Ministerial meeting adopts the Decision on Group Objectives and Principles for Energy Policy, setting a goal for limiting oil imports in IEA countries in 1985, establishing twelve Principles for Energy Policy and ordering systematic annual reviews of the energy policies and programs of Member countries. The IEA publishes the first World Energy Outlook, which forecasts energy trends through 1990. The IEA continues to play an active role in assisting the coordination of the views of IEA Members in the Energy Commission of the Conference on International Economic Cooperation. The Governing Board adopts its Preliminary Guidelines for Collaboration on Energy R&D between IEA Countries and Developing Countries.
The IEA publishes its first annual review of energy policies and programs, covering events in 1977. The IEA holds its second test of the emergency allocation system (AST-2), involving national emergency supply organizations (NESOs) for the first time. Over 200 national and international oil companies participate. The IEA sponsors a workshop in Paris on energy data relating to developing countries. The Agency publishes Basic Energy Statistics and Energy Balances of Developing Countries, 1967-1977. The IEA publication Steam Coal Prospects to 2000 calls for wider substitution of coal for oil to sustain economic growth in IEA and developing countries. The total number of energy R&D projects under way rises to thirty five. The Secretariat hosts a Workshop on Energy Data of Developing Countries which is attended by experts from fifteen developing countries.
In March, the Governing Board meets in response to the oil supply problems arising out of the loss of Iranian oil in the market. IEA Member countries agree to take prompt action with the aim of reducing their demand for oil by two million barrels per day (five percent of consumption). The IEA’s emergency data system is used to monitor the world oil supply situation following the revolution in Iran. IEA Ministers meet twice during the year. In May, Ministers assess the oil market situation and note that the world energy supply situation would be tight for the foreseeable future. They confirm the Board’s action to reduce oil demand by five per cent and emphasize the need for continuing efforts to reduce oil imports. Ministers also adopt principles for increased production, trade and use of coal. The Ministerial statement recognizes that expansion of coal use must proceed under acceptable environmental conditions. In December, IEA Ministers agree on measures to promote more stable oil market conditions, including national oil import ceilings for 1980 and goals for 1985, increased monitoring of energy policies and developments, and procedures for consultation on oil stocks. Australia joins the IEA. The IEA completes a study of opportunities for cooperation between industrial and developing countries on new and renewable sources of energy. The Governing Board adopts Principles for IEA Action on Coal as part of the Agency’s effort to reduce dependence on imported oil through the development of alternative energy sources. The Coal Industry Advisory Board (CIAB) is created to make advice and expertise from senior executives of companies engaged in various aspects of coal production, transport and use available to the Agency. IEA countries are engaged in forty-eight collaborative projects in energy R&D.
IEA Ministers meet again twice during the year. In May Ministers express renewed concern about economic effects of high oil prices. They agree to tighten oil import targets for 1985, to continue efforts to reduce oil imports beyond that date, and to strengthen measures for dealing with short-term oil market disruptions.
In October, IEA Countries react quickly to prevent pressures on the oil market through oil supply losses caused by the Iran-Iraq war. Measures include oil stock drawdowns, consultations between IEA governments and oil companies, and reinforced conservation as well as fuel-switching. In December IEA Ministers strengthen the measures taken in October to maintain the balance between oil supply and demand. The Ministers adopt lines of action for energy conservation and fuel-switching. They also receive the first report of the CIAB Coal Action Program, with recommendations for actions to double coal use by 1990 and to triple it by 2000. Portugal completes procedures to join the Agency, bringing the total IEA membership to twenty-one countries. The IEA conducts the third Allocations Systems Test of the Agency’s Emergency Sharing System (AST-3), with expanded scope including increased industry participation, as fourteen additional cooperating oil companies joined in for the first time. The Governing Board establishes the IEA Dispute Settlement Centre, which provides a system of binding arbitration for disputes between oil companies on actions taken in cooperation with the Agency in an oil supply emergency. The IEA’s study Group Strategy for Energy Research, Demonstration and Development concludes that accelerating development and commercialization of new energy technologies could reduce IEA oil imports by nearly six million barrels per day by the year 2000.
IEA Ministers note the improved world oil market situation, but stress that the oil market balance remains fragile. They agree on the need for more progress in achieving structural change in IEA energy economies. The IEA sponsors a symposium on energy and the economy in Paris and a conference on commercializing new conservation technologies in Berlin. The IEA takes part in the United Nations Conference on New and Renewable Sources of Energy in Nairobi, Kenya. Acting on the report of an Ad Hoc Group, In December, the Governing Board , adopts the Decision on Preparation for Future Supply Disruptions, with flexible arrangements for responding to oil supply disruptions which do not reach the seven per cent level required to trigger the emergency allocation system. The new arrangements provide for continuous monitoring of supply, improved information, prompt convening of the Board to consider responses, and a range of possible actions.
IEA Ministers agree to continue efforts to improve overall energy efficiency and to bring about a more balanced energy mix which minimizes oil use. The Agency and the CIAB publish The Use of Coal in Industry, which shows a large potential for growth of coal use in industrial sectors of IEA countries. Following a CIAB recommendation, the Agency developed a Coal Information System. The IEA and the CIAB hold a conference in Paris on “The Use of Coal in Industry” for senior executives from coal-using industries. The IEA publishes its first bi-annual review on coal prospects and policies of IEA countries. The IEA concludes in its publication Natural Gas: Prospects to 2000 show that significant worldwide natural gas resources could support expanded use of gas, but that this would require IEA countries to increase imports and could create energy security problems. The IEA and the Nuclear Energy Agency jointly publish Nuclear Energy Prospects to 2000. The report calls for measures to speed up the construction and licensing of nuclear power stations. The second World Energy Outlook, which projects energy and oil demand to 2000, is published by the Agency.
IEA Ministers, recognizing the continued likelihood of heavy reliance on imported energy and especially oil, assess energy requirements and security of the next two decades. They agree to avoid undue dependence on any one source of gas imports and to obtain future supplies from secure sources, with an emphasis on the gas produced in IEA countries. Coal Use and the Environment, a CIAB study, concludes that existing technology permits the use of coal to be expanded in an environmentally acceptable manner. The study suggests actions, government and industry can take to increase coal use. The IEA sponsors a workshop on methods of formulating energy policy. Participants from government, industry, and the academic community examine such issues as criteria for energy investment and the role of energy prices in policy making. The IEA begins the commercial publication of the IEA monthly Oil Market Report. The fourth Test of the Emergency Allocation System (AST-4) provides valuable operational training to all participants in the System, including officers of Member governments and oil companies as well as members of the Secretariat. The total IEA portfolio of energy R&D collaborative projects continues to grow, now approaching fifty projects.
The IEA’s second coal review calls for greater reliance on coal by Member countries. Costs of coal production and transport can probably be kept down, the report says, and if so, coal can remain cost-competitive. In July Mrs. Helga Steeg of the Federal Republic of Germany takes over as the IEA Executive Director upon the retirement of Dr. Ulf Lantzke, the IEA’s first Executive Director. The IEA Governing Board adopts its Decision on Stocks and Supply Disruptions, with procedures to enable governments to decide promptly on early coordinated use of oil stocks and other measures in the event of a significant oil supply disruption if this is judged necessary to prevent economic damage. The annual review of IEA RD&D programs shows Member governments are spending almost seven billion dollars annually on publicly funded energy RD&D programs. The report says this demonstrates a continuing strong commitment to energy research, despite budgetary constraints and a well-supplied world oil market.
IEA Ministers state that it would be “imprudent and even dangerous” for IEA countries to ignore forecasts of tightening energy markets in the 1990s, and advocate continuing efforts to reduce dependence on imported oil. Noting significant overcapacity in oil refineries, including new refineries outside IEA countries, Ministers agree to a common approach whereby imported refined oil products can go to markets of different IEA countries on the basis of supply and demand as determined by market forces without distortions. An IEA study reports distinct improvement in fuel efficiency of passenger cars in Member countries over a ten-year period, but expresses concern that further progress might be hampered by the then current and easier oil market situation, declining consumer interest in fuel efficiency, and rising incomes. The study warns about a shift in consumer demand towards larger and less fuel-efficient cars. The IEA publishes a study on the outlook for electricity. The study says governments and electric utilities in the industrialized countries should do more to overcome obstacles preventing electricity from making its full contribution to economic development and energy security. The IEA’s annual review of energy policies and programmes says Member countries’ oil production has probably reached its peak and is projected to decline. The review foresees a massive expansion of coal and nuclear energy production, and a considerable growth of hydropower for the rest of the century. The fifth Allocation Systems Test (AST-5) was conducted with new data quality features to make the test a more realistic simulation of emergency conditions. With the completion of a number of energy R&D projects and the commencement of others, the project portfolio covers about fifty different activities in end-use technology, fossil fuel technology, renewable energy development and controlled nuclear fusion.
In an agreement The United States, Japan, and the European Community, negotiated under the auspices of the Agency, establishing an IEA collaborative project for research into advanced nuclear fusion energy. The agreement provides for exchanges of information derived from their experimental large Tokamak facilities, designed to develop nuclear fusion as a potential source of commercial electricity generation. The 1985 IEA country review sees the merger of the reviews of energy policies and programs of energy RD&D policies into a single integrated country review process. The likely effects of changes in the energy and price outlook on the development of alternative fuels and the implications of the Chernobyl accident for the provision of future electricity generation capacity are also examined in the Agency In the oil emergency sector, a critical review is made of members’ legislative provisions for implementing stock draw in an I.E.P. emergency oil sharing trigger situation as well as in a lesser supply disruption.
IEA Ministers underscore the IEA’s central objective regarding the security of energy supply to ensure economic well-being. They give impetus to the Agency’s work in technology developments, the inter-relationships between energy and the environment, and a better understanding of the energy economies of developing and other non-member countries. The IEA publishes a study entitled Energy Conservation in IEA Countries, on the improvement of energy efficiency and the measures available to governments to promote efficiency. Eleven IEA countries join in a new R&D project on coordinated exchanges of energy technology information through a national computer-based system (at Oak Ridge, Tennessee). An Energy Data Workshop is held in Tokyo in conjunction with the Asian Development Bank, several member governments and representatives from twelve developing countries.
Energy security and environmental considerations are integrated into most IEA activities. The IEA publishes the Energy Efficiency Update, designed to facilitate exchange of information on innovative efficiency programmes among member countries. The IEA “Operations Manual – Consultations on Coordinated Emergency Response Measures (CERM)” is adopted, and a test of CERM is conducted for the first time to test procedures under the IEA’s 1984 Decision on Stocks and Supply Disruptions. The Agency again tests the Emergency Sharing System (AST-6) to assess the system’s readiness and the application of improved procedures. The Centre for Analysis and Dissemination of Demonstrated Energy Technologies (CADDET) is launched in March to facilitate the sharing of technologies ready for introduction into the market.
IEA Ministers note gains in energy security, efficiency, conservation, emergency preparedness, R&D collaboration and other sectors; they view the growing worldwide oil consumption and environmental effects of energy consumption with concern. Ministers reconfirm their commitment to ensuring energy security and policy objectives while also achieving a healthy environment. Mr. John P. Ferriter is appointed Deputy Executive Director of the Agency. The IEA publishes Energy and the Environment – Policy Overview, a study of the long-term impacts on energy security of proposed environmental measures, and the policy choices to achieve energy and environmental objectives. The IEA participates in the work of the Intergovernmental Panel on Climate Change (IPCC) and other energy and the environment activities. The Agency intensifies its work on energy and environment questions in Eastern Europe, and begins preparations for a seminar on the Polish energy sector, sponsored by Denmark, Poland and the IEA.
With the Iraqi invasion of Kuwait in August, the IEA moves into a phase of urgent operational work which continues through 1990 and into 1991. The IEA emergency oil data system is activated. IEA countries devise emergency response programs to deal with various possible scenarios, update them monthly and take actions to ensure members’ preparedness to respond adequately to an oil supply disruption, mainly by demand restraint and stock draw. The IEA devotes major attention to analysis of the energy situation in Eastern Europe and the Soviet Union. The Secretariat participates actively in the G-24 process to coordinate assistance to the energy sectors of Eastern Europe. The Agency joins in preparation of the study of The Economy of the USSR, with the IMF, IBID, OECD and EBRD, acting upon the request by the Houston G-7 Summit in July. Five new IEA energy R&D collaborative project implementing agreements are signed, and the corresponding projects are launched.
All IEA countries, joined by France, Finland and Iceland, agree to a Coordinated Energy Emergency Contingency Plan in the Gulf Crisis, a 2.5 million barrels-a-day contingency plan for a mix of stock draw, demand restraint, fuel switching and increased indigenous production to reduce demand for oil, reassure the market and avoid disruption of supplies. The Governing Board adopts the Plan on January 11th and the Executive Director activates it on January 17th shortly after the war begins. The Board terminates the Plan in March after the war ends. IEA Ministers meet in June to evaluate the IEA countries’ actions during the Gulf Crisis, and express continued commitment to energy security. They also reaffirm the importance of environmental protection and economic growth, the need to address the global warming issue and the importance of sound relations between industrial and oil producing countries. The IEA participates actively with member countries, Eastern Europe and the NIS in the negotiations of the European Energy Charter on energy investment and trade as well as dispute settlement arrangements for that sector. The Charter is adopted in December as negotiations continue for the purpose of preparing an international agreement on this subject. The Agency produces its updated report of Climate Change Policy Initiatives for use in the climate change framework negotiations. The IEA completes its study Assessment of Energy Technology Priority Areas: Energy Technology Strategy. The IEA continues strong interest in Eastern and Central Europe. The Agency publishes the Survey of the Polish Energy Sector and the Surveys of the Energy Policies of Hungary and the Czech and Slovak Federal Republic. The IEA monthly Oil Market Report is expanded with specific information on the former Centrally Planned Economies (CPE) region. The Agency expands its contacts with the Dynamic Asian Economies, the Latin America and the Latin American Energy Organization (OLADE) as well as other regions where energy use influences the global economy and the environment.
The IEA welcomes Finland and France as new members, bringing IEA membership up to 23 countries (all OECD countries except Iceland).
The IEA hosts a high-level technical conference of energy experts on issues of common interest to energy importing and exporting countries with the objectives of enhancing communication and mutual understanding between energy importers and exporters, as well as increasing market transparency and efficiency. The Agency continues active participation in the negotiations of the European Energy Charter Agreement. The IEA integrates and enhances its work in the energy and the environment fields, forming a new Division of the Secretariat for that purpose. On behalf of the G-7, the IEA Secretariat and the World Bank carry out a study of alternative ways for meeting electricity demands in Central and Eastern Europe and in the Newly Independent States (NIS) in the event of closure for safety reasons of some nuclear power stations in that part of the world. The Executive Director addresses the United Nations Conference on Environment and Development where IEA offers energy information and policy assistance. The IEA publishes The Role of IEA Governments in Energy, a survey of government involvement in all segments of the energy sectors of IEA countries. The Emergency Sharing System, is again tested (AST-7), the seventh test in this series, including for the first time Finland, France and the whole of Germany. The Agency continues its work on Central and Eastern Europe and the NIS in carrying out energy surveys, publishing reports and organizing seminars and conferences. The Agency conducts an in-depth energy review of Korea, the first IEA review of a non-member country in the Asia-Pacific region. The IEA encourages non-member and international organization participation in energy R&D Implementing Agreements, creating a new relationship of “Associate Contracting Party” for that purpose. Non-member “Associate” participation in certain IEA energy R&D Implementing Agreements is extended to Israel and Malaysia. Thirty-five separate energy R&D Implementing Agreements are in force, five more are prepared and proposed for signature. The IEA publishes Collaboration in Energy Technology: 1987-1990 which reviews the effectiveness of the Agency’s program in this sector over the four-year period.
IEA Ministers assess the current energy situation and trends against the backdrop of the Agency’s World Energy Outlook 2010. They adopt IEA’s
Shared Goals on essential framework conditions for energy policy and cooperation, and commend them to the Agency’s non-members as well. Ministers agree that concerted policy actions should be taken regarding emergency response mechanisms, diversity of energy sources, energy efficiency, minimization of adverse environmental impacts and expanding relations with particular non-IEA member countries. The IEA, jointly with the OECD, organizes a conference on the Economics of Climate Change. The IEA launches a newsletter, the Energy Environment Update. The Governing Board agrees to conduct an informal Ministerial “brainstorming” meeting on energy and the environment in March 1994 in Switzerland, the first IEA “brainstorming” meeting at Ministerial Level. The Agency publishes the World Energy Outlook which examines the current energy situation and alternatives of the global energy system for the year 2010. The IEA organizes a workshop on stock draw and emergency response management to be held in Japan in February 1994. The Agency continues to participate directly and actively in the Brussels negotiations on the proposed European Energy Charter Agreement. The IEA hosts a second major conference of technical experts from energy exporting and importing countries, with over forty countries participating. The conference concentrates on projections of oil demand, on exploration and production cost developments, including environmental costs, and on investment needs. In a series of in-depth country reports on the energy situation in Central and Eastern Europe, the IEA completes a report on Romania. The Government of Korea expresses its intention to seek IEA membership in parallel with OECD membership. An IEA/Korea Conference on Demand-Side Management is convened in Seoul in November. The IEA expands its relations with countries in Latin America and Asia. Non-member “Associate” participation in certain IEA energy R&D Implementing Agreements is extended to Korea, the Russian Federation, Israel and Poland. The IEA adds to its Implementing Agreements portfolio several new projects, for work on an international natural gas research and technology information center, on photovoltaic power systems, on electric demand-side management and on a Greenhouse Gas Technology Information Exchange (GREENTIE). New projects on electric vehicle technologies and nuclear fusion power reactors are also agreed upon.
The IEA has entered into special policy co-operation agreements with three countries that are considered especially important players in energy markets. In 1994 IEA signed a “Joint Declaration of Cooperation” with the Russian Federation; in March 2003, further to the cooperation, the IEA and Russia’s Ministry of Energy signed “Joint Measures for Cooperation during 2003-2005”. In 1996 the Agency and the State Planning Commission of the People’s Republic of China (later renamed the State Development and Planning Commission) entered a “Memorandum of Policy Understandings in the Field of Energy”; in 2001 the Agency also agreed, with the approval of the Commission, a “Framework for Energy Technology Cooperation” with China’s Ministry of Science and Technology. In 1998, India and the IEA executed a “Declaration of Cooperation”. None of these agreements are in a legally binding form.
IEA analyzed: Although the Straits of Hormuz have never been closed to shipping (though oil shipping was attacked during the Iran-Iraq war of 1980-1988), growing tensions over Iran’s nuclear policy have highlighted the risk of disruptions to shipping in the event of a major regional conflict. In response to growing concerns about this risk among Persian Gulf oil exporters, a trans-Gulf pipeline has been proposed. The line would start in Kuwait, cross Saudi Arabia and the United Arab Emirates and end in Oman, Yemen or Fujairah outside the straits, picking up oil along the way. It is uncertain whether the project will receive political and financial backing. A smaller line from Abu Dhabi to Fujairah has already been given the green light.
China and India are the emerging giants of the world economy. Their unprecedented pace of economic development will require ever more energy, but it will transform living standards for billions. There can be no questions, asking them selectively to curb growth so as to solve problems which are global.
So how is the transition to be achieved to a more secure, lower-carbon energy system? provides the answers. With extensive statistics, projections in three scenarios, analysis and advice, WEO 2007 shows China, India and the rest of the world why we need to cooperate to change the energy future and how this should be done.
IEA analyzed: since the launch of the Clean Energy Transitions Program (CETP) in November 2017, the IEA has significantly expanded its work to help accelerate energy transitions in major emerging economies. The CETP has played a critical role in both helping to build global momentum for clean energy transitions and in further strengthening the IEA family. The CETP Annual Report 2019 summarizes the program’s activities in 2019, highlighting major achievements, successes and outcomes, as well as identifying opportunities for further collaboration with partners and potential partners. It also highlights activities planned for 2020. The report reflects on the first two years of the CETP and highlights ideas and techniques to achieve even greater progress. The report initially provides an overview of the CETP’s activities, including working methods and results, then presents activities and achievements for each priority country (Brazil, the People’s Republic of China, India, Indonesia, Mexico and South Africa); priority regions (Africa, Latin America and Southeast Asia); and finally on a global level.