Crude's watchdog ready to bark

Fatih Birol, the chief economist of the International Energy Agency, does not shy from spreading alarming messages, including his mantra - one day the world will run out of oil. He is also believed to be the only official to have worked for both the IEA and Opec.

Fatih Birol, his glasses twitching below bushy eyebrows, is standing at a podium in Abu Dhabi. He is the "Cassandra of crude".

His mission: to warn of the dangers of using too much energy. It is a position he takes around the world, speaking to whoever will listen. His mantra: "One day, we will run out of oil."

Dr Birol is the chief economist of the International Energy Agency (IEA), the Paris-based organisation that represents the interests of 28 oil-importing nations. Dubbed "one of the most powerful men in the world", he can make or break markets and lead to changes in government policy with a word about oilfield output.

"I make all my statements based on the evidence," Dr Birol says. "We are considered to be a watchdog, the IEA, and a watchdog fulfils its task only if it barks. So I bark when I think there is a need for barking."

At the same time, Dr Birol - the only person known to have worked both at the IEA and its rival Opec - has cast himself as an ambassador between producers and consumers. That represents a change from the IEA's stance when it was created in response to the 1973 oil crisis to challenge the ability of Opec to effectively set the price of oil through production cuts.

"Opec's matured a bit over the last couple of decades," says Caroline Bain, a senior analyst with the Economist Intelligence Unit in London. "There's much more collaboration going on between producers and consumers than there would have been 20 years ago."

Dr Birol, 52, will be the IEA's voice of continuity as it prepares for a change in leadership. The executive director, Nobuo Tanaka, will leave in August after four years representing oil-importing nations - although the "alarming messages", Mr Tanaka says, are Dr Birol's domain. Those messages have become even more alarming with oil prices above the psychological barrier of US$100 - high enough to stifle the global economic recovery, Dr Birol warns.

"What we are doing here is to try to get the numbers, data, analysis, and make statements which are sometimes perhaps a little bit too tough to make," he says. "But it is the job that was given to me, to say the truth. And the truth may not be always sweet."

The economist's story begins in Ankara, the Turkish capital that plays Washington DC to Istanbul's New York. Born in 1958 to a housewife and a professor of medicine, he grew up playing football and developing a love for Turkey's teams.

He moved to Istanbul to study power engineering, which led to a chance to study energy economics in Vienna. But the young Birol was reluctant to leave his home country. His parents urged him to go.

"It was very difficult," he recalls. "Several times I thought, especially when I was in Vienna studying, I thought I cannot do it, I need to go back." He began a ritual of calling his parents every day - a habit that survives today. "I need to hear that they are OK," he says. "I need to hear their voice, even if it's just for a couple of minutes."

After his doctoral studies, he joined Opec's economic analysis team. But Dr Birol still wanted to represent his home country, so six years later he moved to the IEA. It is rather like moving between Manchester United and Manchester City football clubs: not unprecedented, but not always popular.

"His experience in Opec certainly helps," says Mr Tanaka. "He knows the producer-side ideas and concepts and models, and he can use these experiences in our work."

Dr Birol brought another asset to the IEA: experience scoring for Opec's football team. The teams have never played against each other, but, he says, "it would be an interesting match".

He continues to play for the IEA's team as honorary captain. "The young people are very kind to me to pass the ball," he says.

His passion for football and his home country made it to the cover of World Energy Outlook, the annual forecast on oil supply and demand that many governments use as a handbook for forming national energy policy. When Dr Birol moved into the chief economist's office, he changed the cover's colour from dark blue to red and yellow, the colours of his favourite football team, the long-established Turkish club Galatasaray.

"After I took over … it started to become a very important book - but most important are the colours of my team in Turkey," he says, proudly. "I love football, and I love my work."

Aside from football matches, his indulgences are simple: five newspapers at the weekend and summer vacations every year with his parents in Istanbul. "We have very strong family ties," says Dr Birol, whose only brother recently retired from the oil major BP in Turkey. "Since we are two boys and I am the older one, so I have the responsibility of taking care of the family."

These days he flies from Paris to Tokyo, Abu Dhabi to Davos, diagnosing a world economy he believes has grown sick from excessive fossil fuel consumption.

Savouring his record of predictions, he recites a couple of successful forecasts: "At the beginning of this year when the prices were $90, I said that the oil prices are entering a danger zone, which we are seeing now … In the year 2007, I said that China may soon be a coal importer. At the time many people didn't believe us because China was exporting coal. And now China very recently became a major coal importer, and the coal prices have more than doubled."

But his record has not been spotless. In 2008, the year the oil price hit an all-time high of $147 a barrel, his World Energy Outlook almost doubled estimates of the rate of global oilfield output decline.

"You don't really expect radical statements from the IEA," says Ms Bain. "Their job is not to shock the market and lead to prices that would not reflect fundamentals. Their job is to keep the market calm. They're not a force to reckon with that Opec would be, because Opec can do something to physically change the market, whereas the IEA can [only] talk." When the IEA talks, she says, it follows a set script - including Dr Birol. "He may be a very colourful character, but when I see him at conferences he plays the party line," Ms Bain says. "They're all saying the same thing and they've got the same charts."

One of Dr Birol's pet subjects is the danger of climate change and excessive energy consumption in developed countries. He is so concerned about the limits of the world's resources that he has never bought a car - a small contribution to bringing into balance the developed and developing world's consumption. A favourite statistic of his: the whole of sub-Saharan Africa uses the same amount of electricity as New York City.

"It is morally and economically unacceptable while we in the western countries enjoy so much energy," he says. Seeing that balance of energy consumption shift is the last item on his professional checklist. After that, he can relax - and he has it all planned out.

"At the IEA we receive a lot of job offers from left and right," he says. "But my idea is to go back to Istanbul to have an apartment with a nice view of the Bosphorus, with a terrace, where I can watch the Bosphorus and enjoy the life."

On his dream terrace, he would dine on fish, mezze and raki - and "afterwards, enjoy a very nice cigar".

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