Wars have a way of exposing assumptions that look reasonable at the planning stage.
For years, energy policymakers and investors were told that oil and natural gas were sunset industries. The International Energy Agency’s 2021 net-zero roadmap called for an immediate end to new oil and gas projects, warning that additional investment could create stranded assets.
That advice was not merely a forecasting error. It risked becoming an investment signal—one that discouraged the very capital needed to maintain energy supplies.
Now the IEA is acknowledging a more complicated reality. In its 2025 analysis of oil and gas field decline rates, the agency warned that maintaining production will require substantial continuing investment. As my recent issue brief explains, oil and gas production does not remain constant; existing fields decline, and new investment is required just to offset those losses, even before you factor in the need for expansion.
The numbers are sobering. The IEA estimates that observed global decline rates average nearly 6% annually. If investment in existing production stopped altogether, natural decline would reduce global oil production by roughly 8% each year—about 5.5 million barrels per day, approximately the combined output of Brazil and Norway. The IEA’s original report also concludes that maintaining current production levels through 2050 would require more than 45 million additional barrels per day from new conventional oil fields.
This prediction is a reminder that underinvestment has consequences.
Those consequences become clearest during war. The conflict with Iran and the disruption of shipping through the Strait of Hormuz and the Red Sea, and the impact of Ukraine’s attacks on Russian infrastructure, have shown how quickly geopolitical events can turn energy assumptions into economic risks. Oil markets respond not only to barrels physically lost but also to the possibility that supplies, transportation routes, or spare capacity may become unavailable. Another NCEA analysis of the Iran war notes that the conflict has caused oil prices to spike and revived concerns about an energy crisis.
The critical point is that energy security requires a portfolio of options and fossil fuels, alternative energy, nuclear power, and efficiency gains all have a role to play. Energy investment portfolios cannot be managed responsibly by assuming demand will disappear before supply does.
Investment in wind and solar has grown rapidly. The IEA reported that so-called clean-energy investment rose from $1.2 trillion in 2015 to $2.2 trillion in 2025. But upstream oil and gas investment fell from $869 billion to $567 billion over the same period. While alternative energy investments may be justified and welcome, growth in one part of the energy system does not justify neglect in the rest, indeed in foundational energy sources.
Oil, natural gas, and coal still supplied roughly 86% of global energy in 2025. The global energy system has been adding new sources more rapidly than it has been replacing old ones. That distinction matters. A world that consumes more energy cannot afford to underinvest in the fuels that continue to power transportation, industry, agriculture, heating, and global trade.
The investment challenge is especially acute because projects take time. The NCEA brief notes that the period between issuing an exploration license and beginning commercial production has lengthened to roughly 20 years in many cases. By the time a supply shortage becomes visible in prices, it may already be too late to build the infrastructure needed to correct it quickly.
This is where energy policy and national security meet. A country or company that discourages investment in production, pipelines, export terminals, refineries, tankers, and other infrastructure does not eliminate energy risk. Instead that risk shifts into the future—and often transfers greater influence to countries with fewer economic or political constraints.
The goal should be to approach any environmental goals with a clear understanding of physical realities. As NCEA’s foundational The Choices We Face: Energy for the 21st Century argues, human flourishing depends on energy that is affordable, reliable, and sufficiently abundant. Diversification is healthier than dependence on any single technology, fuel, supplier, or forecast.
Wars are unpredictable. Demand forecasts are uncertain. Technology will continue to improve. But one fact is inescapable: producing energy requires investment.
The prudent choice in the face of looming energy insecurity is to maintain the broadest practical portfolio, allow markets to direct capital toward genuine demand, and ensure that political aspirations do not suppress the investment needed to keep societies supplied.
The world does not lack for resources. The next energy crisis can be avoided by investing in resources the world still needs.
Neil Atkinson is a Senior Fellow at the National Center for Energy Analytics, former Head of Oil Industry & Markets Division at the International Energy Agency, and former analyst for Petróleos de Venezuela, S.A.
