After a recent landmark ministerial meeting commemorating its 50th anniversary, the International Energy Agency is exploring a new horizon tasked with bolstering global energy security by possibly taking in India as a new member while ringing alarm bells to accelerate climate steps.
The unanimous ministerial communique agreed by 31 IEA members was descriptive as well as implicative of exploring ways to boost cooperation with non-members for its collective strategic oil actions and enhance its role in gas security.
Above all, the IEA's official launch of negotiations with India for its full membership was a "revolutionary" outcome, according to IEA Executive Director Fatih Birol.
"A few months ago, the Indian government requested full membership of the IEA signed by the foreign minister and we have discussed this with our governments for a long time," Birol told a press conference following the end of the ministerial meeting Feb. 14.
"We have decided as seen in our communique that we give a positive response that we are starting the journey of the discussions for India to become a full member."
The talks for India's full membership would still take time but the latest move was "epoch-making," said Nobuo Tanaka, former IEA executive director, who initiated the agency's outreach to India in 2007.
"Pulling in the leader of the growing Global South was significant for both energy security and global environmental measures," Tanaka told S&P Global Commodity Insights.
"In particular, the IEA tends to be pulled by Europe and the administration of US President Joe Biden to be leaning toward green because of political situations, there would be a possibility of rebalancing with the South's pragmatism for the need of fossil fuels for the time being."
Nonetheless, India's potential membership could involve amending the IEA treaty or giving the major energy consumer a "quasi-full membership" upon securing unanimous agreements by all members while keeping the current treaty, Tanaka said.
The IEA, which operates under the framework of Organization for Economic Cooperation and Development, only allows OECD nations as members, as well as requires them to hold strategic oil stocks of 90 days of net imports and contribute to its collective actions in the event of major oil disruptions.
Oil security
The ministerial communique called for the IEA secretariat to investigate cooperation with non-member countries on strategic oil stocks.
The IEA will work with countries within the broader IEA family of 13 association and five accession members to strengthen cooperation in the area of oil security, Keisuke Sadamori, IEA's director of energy markets and security, told S&P Global, noting that its next emergency response exercises will be conducted in the second half of 2024.
Sadamori said that "the IEA is in direct discussions with a number of key partners in the IEA family specifically about creating strategic oil stocks, however, such discussions are at this stage confidential."
As part of its ongoing effort, the IEA is encouraging and assisting countries to maintain strategic oil reserves for their own domestic supply security, minimize a domestic disruption's regional market impact and consider how these strategic reserves can be coordinated with IEA members in case of a global disruption, Sadamori said.
Asked whether India is expected to create 90 days' worth of strategic oil reserves, Sadamori said: "The IEA is now starting discussions and constructive engagement with India on its request for membership."
"The IEA membership requirement to have oil stocks of at least 90 days of net imports will be important to these discussions, however, we cannot speculate on the outcome of these discussions."
Gas security
In light of a need for improvement in gas security following Russia's invasion of Ukraine, the IEA sees a need for closer international dialogue and improved transparency on storage regulations, as more stringent storage regulations have been adopted across key gas markets, Sadamori said.
"As a first step, the IEA aims to enhance data transparency, facilitate dialogue on storage regulation and the exchange of best practices," Sadamori said.
While IEA members that are net gas importers are interested in "multilateral approaches" and considering ways to enhance "gas reserve mechanisms for improving gas security," Sadamori said: "the IEA will facilitate such dialogue and serve as a platform to assess how reserve mechanisms on a voluntary basis can be improved."
"In an increasingly globalized gas market, natural gas/LNG reserves can have extra-regional implications," he said.
Net-zero roadmap
The ministerial communique acknowledged the IEA's Net Zero Roadmap report and noted that "in a scenario that hits global net-zero emissions by 2050, declines in demand are sufficiently steep that no new long lead-time conventional oil and gas projects are required."
Irish Minister for Environment, Climate and Communications Eamon Ryan, who co-chaired the IEA ministerial meeting, said the agreement reached in Paris has been a historic shift because it recognizes that the green energy transition is "unstoppable" with its commitments to bring to an end new, unabated coal plants and long lead-time oil and gas exploration.
Commenting on the Net Zero Roadmap acknowledgment in the communique, Sadamori said: "Our Net Zero Roadmap report sets out a pathway for how governments around the world can work to meet their climate objectives."
"At the IEA, we will redouble our efforts to lead the fight against climate change in the energy sector, while ensuring the security of global energy supplies and working to increase energy access throughout the transition," he said.
Tanaka, who attended the Paris meeting, described it almost as a green competition, which was a reflection of a possible comeback of Donald Trump as the US president.
"I told Fatih that the IEA should make a what-if-Trump scenario," Tanaka said. "Such scenario is needed because the IEA could be criticized considerably should Trump is reelected."