The most recent version of the World Energy Outlook (WEO) from the International Energy Agency (IEA) made headlines this week. Among other things, it suggests that the massive quantities of oil and natural gas being produced in and by the United States right now will  experience a significant drop-off in the future (albeit, 20 years from now).

Although the WEO is a highly regarded publication, the IEA’s track record for predicting shale phenomena has been subpar at best. In fact, as this short post will show, it was one of the late-movers in qualifying shale revolution as a game-changing phenomenon.

But perhaps the most puzzling part is that it uses similar inputs (and even similar outputs at the more aggregated production levels) to come to strikingly different conclusions about shale than what the U.S Energy Information Agency (EIA) has. As we know, the EIA has always been a bit more sanguine (and, incidentally, accurate) when it comes to its evaluations of shale.

So, then: two respected agencies, very similar data sets—and yet, dramatically different conclusions. Let’s take a quick look at how they got there – and why.

Back in November 2008, IEA’s World Energy Outlook (WEO) predicted that “most incremental oil and gas will come from OPEC.” (p.40) But just one year later, the perspective had changed. As the 2009 WEO acknowledged:

“The recent rapid development of unconventional resources in the United States and Canada, particularly in the last 3 years, has transformed the gas market outlook, both in North America and in other parts of the world.” (Executive Summary, p.12)

The incremental changes in posture continued in 2010 and 2011. But it was until 2012 that the WEO fully acknowledged the breadth and depth of the shale revolutions, marking an even bigger shift from what it had sustained in 2008. In its own words:

 “The global energy map is changing, with potentially far-reaching consequences for energy markets and trade. It is being redrawn by the resurgence in oil and gas production in the United States…. The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge – and steadily changing the role of North America in global energy trade.” (Executive Summary, p. 1; emphasis added)

And thus, the tone with which the IEA reported about the American oil and gas revolution seemed to have finally caught up with the reality.

Unfortunately, the IEA’s optimism about the potential of innovative technologies such as the ones used to produce oil and gas from shale proved to be very short-lived. This week, at the top of its executive summary, the 2014 WEO provocatively asked: “[D]oes growth in North American oil supply herald a new era of abundance – or does turmoil in parts of the Middle East cloud the horizon?”

Answering its own question, “energy security concerns (are) on the rise,” the IEA reported, “especially once United States tight oil output levels off in the early 2020s and its total production eventually starts to fall back.” (emphasis added)

Perhaps even clearer, in a presentation to the press, the head of the IEA affirmed that:

 “The short term picture of a well-supplied market should not obscure future risks as demand rises to 104 MMbbl/d & reliance grows on Iraq and the rest of the Middle East.” (emphasis added)

In other words, after the unexpected shale revolution took off, the IEA has come full circle: back to suggesting–as it did in 2008–“that most incremental oil and gas will come from OPEC.”

That the IEA would go back to warning about the perils of fossil fuel markets in the future is hardly surprising. The IEA is, after all, an institution that was created almost 45 years ago to counterbalance the leverage that OPEC had amassed at the moment. And it has done so over the years by, among other things, advocating for a shift from fossil fuels (OPEC’s source of strength) to renewable energy sources and curbing future energy demand.

In fact, even the way the WEO is constructed serves as a reminder of this purpose. While the Annual Energy Outlook from EIA includes scenarios that vary according to the expectations of technological development, the WEO includes scenarios that vary according to how much of climate change would be curbed.

To explain the decision to construct the different planning scenarios, the EIA, in its 2014 Annual Energy Outlook, explains that

 “[C]hanges in U.S. crude oil production depend largely on the degree to which technological advances allow production to occur in potentially high yielding tight and shale formations. They also depend on the assumed estimated on the assumed estimated ultimate recovery for those formations.” (emphasis added)

In contrast, IEA’s planning scenarios practically disregard what EIA calls “a high oil and gas resource” scenario—which, given the realities of the shale revolution, seems like a very prudent alternative to have.

For context, under EIA’s high-resource scenario, “tight oil production reaches 8.5MMbbl/d in 2035, with total U.S. crude oil production reaching 13.3 MMbbl/d”. It’s a very different picture of U.S. production than the IEA attempts to paint in its report, which projects U.S. production“falling back”” after the mid-2020s.

But, even if we take into consideration the EIA’s baseline scenario, tight oil production will reach 3.7 MMbbl/d by 2035.

This projection, by the way, is a huge increase from what  EIA was forecasting in 2012, when the idea that tight oil production might reach 1.23 MMbbl/d by 2035 was seen as big news; and projections of 3-4 MMbbl/d from Citi, Credit Suisse, IHS CERA (now adopted as the baseline) were called optimistic, as this report from PWC references.

But it is not just EIA that sees this positive pattern. The 2014 BP Energy Outlook – also one of the most respected and widely-cited energy assessments worldwide – has predicted that, the United States will be self-sufficient in terms of energy in the near future, thanks to shale. Moreover, it has forecasted that more significant increases will come from non-OPEC countries—led, of course, by the United States and its tight oil revolution—than from OPEC. As the presentation for the BP Outlook noted:

“By 2035, non-OPEC supply is expected to have increased by 10.8 Mb/d while OPEC production will have expanded by 7.4 Mb/d (p.25)—with U.S. production increasing by 3.6 MMbbl/d.”

But perhaps most striking is the difference in tone and emphasis that the three most reputable energy forecasting publications have adopted while looking at what amounts to fairly similar data sets.

The IEA’s WEO claims that “energy security concerns are on the rise.”

On the other hand, the executive summary of EIA’s Annual Energy Outlook says that “there is greater upside uncertainty than downside uncertainty in oil and natural gas production.”

And the cover letter from BP’s Energy Outlook offers a “resounding yes” to the question of whether the world has sufficient energy to fuel growth. Moreover, it answers the energy security question with “a mixed, but broadly positive view,” with “the path of the United States towards energy self-sufficiency” being a main reason.

To be sure, the challenges ahead are great and many. But to argue that “the global energy system is in danger of falling short of the hopes and expectations placed upon it,” or that “United States’ tight oil output levels off in the early 2020s and its total production eventually starts to fall back”, like the IEA has, sounds more aligned with climate change mitigation advocacy than with what technology will actually make possible.

At the very least, it is beginning to sound very much like the gloomy 2008 and 2009 revisions that, during 2010, 2011, 2012, and 2013, had to be revised (upward) again and again.