WHAT IS International Energy Agency (IEA)
The IEA works to ensure reliable, affordable and clean energy for its member countries and beyond. Its main areas of focus are energy security, economic development, environmental awareness and engagement worldwide.
BREAKING DOWN International Energy Agency (IEA)
The IEA is an autonomous body within the Organization for Economic Co-operation and Development, or OECD, framework. The governing board is the main decision-making body of the IEA, composed of energy ministers or their senior representatives from each member country. In addition, the IEA has several standing groups, committees and working parties made up of member country government officials, which meet several times a year. The IEA operates within the financial framework of the OECD. Also, countries and other energy stakeholders make voluntary contributions to support IEA programs. About a third of the IEA’s spending is financed by voluntary contributions, most of which are from government sources. It also receives funding from private sources and contributions in kind, especially staff on loan. The IEA is made up of 30 member countries. Before becoming a member country of the IEA, a candidate country must meet several criteria. It must have crude oil or product reserves equivalent to 90 days of the previous year’s net imports, to which the government has immediate access even if it does not own them directly, and could be used to address disruptions to global oil supply.
It must have in place a demand restraint program to reduce national oil consumption by up to 10 per cent. It must have a national plan in place for Coordinated Emergency Response Measures, or CERM. Also, all oil companies under its jurisdiction report information upon request. And it must be able to participate in any IEA collective actions.
The IEA was organized in response to the 1973-1974 Middle East War crisis and its aftermath. The policy and institutional lessons of the crisis led to the establishment of the IEA in late 1974 with a broad mandate on energy security and energy policy cooperation among member countries. The main policy decisions and the agency framework were stipulated in in the IEA Agreement within the International Energy Program treaty. The IED is hosted at the OECD in Paris. It became focal point for energy cooperation on security of supply, long-term policy, information transparency, energy and the environment, research and development and international energy relations. The IEA has evolved and expanded and today provides statistics and analysis and examines the full spectrum of energy issues, advocating policy toward reliability, affordability and sustainability of energy.