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The U.S., despite its president, is set to be the star of the energy scene out to 2035, and – thanks to the shale gas revolution – of the emissions reduction scene too
The International Energy Agency was set up in the early 1970s after the first OPEC crisis to persuade countries to avoid their natural beggar-thy-neighbour tendency during oil supply disruptions, and instead share the pain. That is, it was an agency set up to try to dissuade bad policy. Although it took a while, largely due to more bad policies, markets learned to deal with supply problems. Bad policies continue to be the main source of economic disruption.
With the decline of its original function, the IEA has morphed into a typical global bureaucracy whose overriding purpose is to expand the reach of global bureaucracy. It sees itself at the centre of a global energy “dialogue” whose theme is the inadequacy of markets and the capacity of wise policy to correct for their shortcomings, despite the copious counter evidence of history.
The IEA’s annual World Energy Outlooks are most significant for indicating how off beam previous outlooks have been, but the thing about organizations such as the IEA is that they are as shameless as they are self-promoting. They treat all new – and inevitably unseen – market developments as fodder for more elaborate fretting, studying, and policy formulation.
This year’s WEO, which was released on Monday, is the usual mix of the obvious, the deceptive and the out to lunch.
The U.S., despite its president, is set to be the star of the energy scene out to 2035, and – thanks to the shale gas revolution – of the emissions reduction scene too.
The IEA notes the link between “relatively low energy prices” and a country’s industrial outlook. What insight! By the same token, however, Europe, which is saddled with by far the worst policies due to its climate obsessions, is set to flag.
The admission that relatively low prices are an economic advantage, although obvious, does raise a significant question over the validity of the relatively high prices that Europe has been trying to impose. Did it really imagine that this would lead to growth?
For the rest of this column, click here: http://opinion.financialpost.com/2013/11/12/peter-foster-despite-obama-u-s-the-star-of-world-energy-outlook/