oil prices

IEA Chief: U.S. Fracking Will Rise Again

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The taps will soon be flowing again with U.S. oil, says IEA chief Fatih Birol.
  • Why it matters

    Why it matters

    Fatih Birol warns that falling oil prices could lull governments into a false sense of security, and that they will be in for a shock if prices rise again.

  • Facts

    Facts

    • The Turkish economist Fatih Birol is executive director of the Paris-based International Energy Agency.
    • The agency was set up to deal with industrial countries’ energy organization needs in the wake of the 1973–1974 oil crisis.
    • He previously served as the agency’s chief economist.
  • Audio

    Audio

  • Pdf

Fatih Birol’s views on the world energy situation are worth listening to. He is executive director of the International Energy Agency, and Forbes magazine named him one of the most powerful people in the world when it comes to energy. He talked to Handelsblatt about the potential threats and hazards of falling oil prices.

 

Handelsblatt: Mr. Birol, you warn energy consumers such as airlines against allowing themselves to be “lulled” by low oil prices. Why?

Fatih Birol: At first glance, you think low oil prices are good news for consumers. Lufthansa is happy, car companies must be happy, and so is the finance minister, knowing that imported oil costs less.

What are the downsides?

There are two major problems with that. First, Germany isn’t the only country trying to with an Energiewende [the transition to renewable energy]. When we talk about [the CO2 emissions reductions agreed to in] Paris, there’s a lot of policy push in terms of renewable energies and energy efficiency – many country want to utilize them. But when the prices of oil, natural gas and coal are so low it complicates the transition because renewables can’t keep up in terms of competitiveness, and to save energy is no longer a major incentive.

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