Daniel Yergin, who moderated 42 sessions with world energy leaders at the CERAWeek by S&P Global energy conference in Houston last week, said he’ll take home some heavy lessons from the five-day event.
“The biggest takeaway for me is just the sense of urgency around energy right now in the sense that we’re in a crisis that could actually get worse,” Yergin said. “And the degree to which U.S. energy has become such a geopolitical asset for the United States and Europe,”
The 75-year-old prolific energy author hosted dignitaries who included Special Presidential Envoy for Climate John Kerry, Chevron CEO Mike Wirth, Ford CEO James Farley and Sen. Dan Sullivan, R-Alaska.
Those are just a few of the names at the conference that brought over 5,800 delegates from 87 countries, including more than 900 speakers.
The conference came just days after the start of the Russian invasion of Ukraine, which shocked energy prices worldwide. The United States banned Russian oil imports as part of its harsh sanctions package, news that broke during the conference.
Yergin said one of the takeaways from the conference was that the move away from carbon-based energy may take longer than some hope.
“I think the word is transition, and transitions unfold over a long period of time. I spend a lot of time in ‘The New Map,’ looking at the history of energy transitions, and they unfold over a century,” Yergin said, referring to his latest book. “And the notion that you can get everything done in 28 years, and half of it done in eight years, you’re forgetting that this is a $90 trillion world economy that gets 80% of its energy from hydrocarbons.
“That fact won’t change overnight,” Yergin said, and oil and gas will still be relevant in 2050. Yergin also emphasized the geopolitical impact of the shale revolution and the United States’ world-leading oil and gas production. That is “very critical for the overall balance” of the world, he said, because Russia trails only slightly behind as an energy producer.
It wasn’t just Yergin who came to that conclusion at CERAWeek.
“If we say that we’re going to put off limits our own energy opportunities, oil and gas and coal, than that makes us vulnerable,” Sen. Lisa Murkowski, R-Alaska., said.
American Petroleum Institute CEO Mike Sommers said the Russia-Ukraine war and the energy volatility resulting from it is a “wake-up call” on the need for more U.S. production.
Even Energy Secretary Jennifer Granholm said the western world is on a “war footing,” and energy executives need to start “producing more right now.”
Environmental Protection Agency Administrator Michael Regan and Kerry each pushed primarily green energy at the conference. It was Kerry who made the comment that the world needs to cut out 45% of carbon emissions by 2030 in order to reach net-zero emissions by 2050, which Yergin panned.
But both Kerry and Regan acknowledged in their remarks that natural gas will be part of the energy mix for at least the immediate future.
“The big story at CERA this week is that basically people recognize that carbon is still a major factor in the global energy market,” Carlyle Group Co-Chairman David Rubenstein told FOX Business. “And while there’s been more discussion on renewables over the last year than carbon, in truth, carbon energy is still here, and we still are very dependent on it. And it’s not gonna change any time soon.”
It remains to be seen how much U.S. energy production might increase – if at all – amid the Russian war on Ukraine. There’s increasing calls for the U.S. to supply more energy to Europe and businesses like EQT, the largest natural gas producer in the U.S., which is pushing for a massive increase in natural gas exports.
EQT CEO Toby Rice told FOX Business the only support his business needs from the government to make that happen is faster permitting for its projects.
But officials like Federal Energy Regulatory Commission Chairman Richard Glick at CERAWeek resisted calls to ease permitting burdens from officials like Sen. Joe Manchin, D-W.Va. And Murkowski said that unless the Biden administration makes a tangible effort to ease business conditions, investors will be reluctant to back energy development.
“A statement from the energy secretary saying produce more right now is a good first step,” Murkowski said of Granholm.
“If you’re the investor, if you’re the producer, you’re looking at this and saying, ‘All right, is this … just one secretary who made a statement today? I mean, if I move out on this, are they really gonna stick with the program here? How risky is this?’”