What Is the International Energy Agency (IEA)?
The International Energy Agency (IEA) is an international intergovernmental organization that was established in 1974. Its stated mandate is to maintain the stability of the international oil supply, although its mission has expanded in recent years to emphasize the promotion of renewable energy sources.
- The International Energy Agency (IEA) is an organization dedicated to maintaining a steady supply of oil throughout the world.
- It was founded in response to the 1973 oil crisis, in which the supply chain for oil temporarily broke down.
- In recent years, the IEA has also focused on renewable energy and initiatives focused on environmental protection and stopping climate change.
- The IEA has made three interventions in recent years: in 1991, 2005, and 2011. In each instance, IEA member countries released oil from their national reserves to help address a temporary disruption in supply.
How the International Energy Agency (IEA) Works
The IEA operates within the broader framework of the Organization for Economic Co-Operation and Development (OECD). Founded in 1974, following the 1973 oil crisis, the IEA’s original mission was to help prevent any large-scale disruptions in the international supply of oil, as well as to serve as a venue for international research and collaboration related to energy security issues more generally.
One of the flagship programs of the IEA has been the International Energy Program, according to which its members agree to withhold large stocks of oil in order to respond to any future unforeseen disruption in the oil supply.
Under this agreement, IEA member nations are required to store the equivalent of at least 90 days’ worth of oil, measured according to their previous year’s net oil imports.
In the last few years, the IEA has been criticized for failing to accurately forecast the speed at which renewable energy sources have proliferated throughout the world. Solar energy production, for example, has increased at a rate vastly greater than that projected by the IEA.
In the event of a sudden disruption to supply, the IEA can help coordinate among its member nations, who could increase supply by releasing some of their oil reserves.
Other measures that the IEA can take to help restore supply include advising on interventions such as fuel rationing, public relations, and outreach to encourage lighter fuel use, driving restrictions, and the coordination of efforts to bring additional fuel production facilities online.
Other Functions of the International Energy Agency (IEA)
Not only does the IEA ensure a steady supply of oil throughout the world but it also seeks to "advise governments on developing, implementing, and measuring the impact of efficiency policies."
Given the imminent threat of climate change, the IEA focuses on ways to reduce climate change and any other negative impacts on the environment through a variety of initiatives, such as the Global Fuel Economy Initiative.
The IEA also provides significant amounts of data and policy analyses on energy in conjunction with many other organizations, such as the G-20, the Carbon Sequestration Leadership Forum (CSLF), and the International Partnership for Energy Efficiency Cooperation (IPEEC).
The IEA has 30 member countries, 8 association countries, and 3 accession countries.
The International Energy Agency (IEA) in Action
For the most part, the IEA is intended to serve as a preventative measure, coordinating its member nations ahead of time so that large-scale oil disruptions are less likely to occur. However, there have been instances where the IEA was forced to intervene in the oil supply chain since its founding in 1974.
The most recent of these interventions occurred in 2011 when Libya’s oil supply was severely disrupted due to its civil war. The IEA also intervened in 2005, when Hurricane Katrina devastated the offshore oil infrastructure of the Gulf of Mexico. Another intervention was also made in 1991 when Middle Eastern oil supplies were disrupted during the First Gulf War.
In all of these measures, each country’s relative contribution of oil was calculated based on its share of total oil consumption during the previous year. In this manner, countries that are most reliant on international oil imports are expected to make the largest contribution toward maintaining the world's supply of oil.