NEW YORK (Reuters) – Former US Secretary of State Mike Pompeo took the stage at the world’s largest energy conference in 2019 to declare an era of US dominance after a decade of rapid shale development made the United States the largest oil and gas producer in the world.
Two years later, the oil industry is recovering from the worst recession it has ever experienced, after measures to contain the coronavirus prevented billions from traveling and wiped out a fifth of global fuel demand. The US fossil fuel industry is still faltering after tens of thousands of jobs have been lost.
The pandemic has also accelerated the energy transition, interrupting a steady increase in fuel consumption that might otherwise continue unabated for several years. Oil demand may never recover from that blow. This year’s CERAWeek conference in Houston is completely virtual, with numerous panels dedicated to the transition to the low-carbon economy of the future, hydrogen technologies and climate change.
Bill Gates, co-founder of Microsoft Corp, US climate envoy John Kerry, and speakers from Amazon and renewable fuels giant Iberdrola are among the keynote speakers.
“The tone is different: there is one theme that pervades the entire conference and that is the energy transition,” said CERAWeek founder Dan Yergin, vice chairman of IHSMarkit.
Last year’s conference was one of the first major global events to be canceled as the pandemic began to rage and quickly made it impossible to gather thousands of people from 85 countries into the conference venues.
Since then, many of the world’s largest oil companies have set ambitious goals to shift new investment towards technologies that will reduce carbon emissions to slow global warming. The British BP Plc has largely thrown its oil exploration team overboard; American car giant General Motors Co has announced plans to stop making gasoline and diesel vehicles in 15 years.
Sure enough, the 2021 program includes oil leaders who typically appear at CERAWeek. They include Mohammed Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), and the chief executives of Exxon Mobil, Total, Chevron and Occidental Petroleum.
But they participate in panels that focus on the energy transition. Barkindo will discuss what kind of oil and gas recovery will have if future demand is challenged. BP’s Looney will join Andy Jassy, who will become CEO of Amazon.com Inc later this year, in a panel on reinventing energy. Occidental CEO Vicki Hollub and Ahmed Al Jaber, the United Arab Emirates’ Minister of State, are scheduled to address the reduction of CO2 emissions.
Oil companies are under increasing pressure from shareholders, governments and activists to show how they are moving their businesses from fossil fuels to renewable energy sources, and to accelerate that transition.
“This year’s program reflects the reality of the transition to a net zero future,” said Julien Perez, vice president of strategy and policy for the Oil and Gas Climate Initiative, a consortium of major oil companies.
Yergin said Gates will discuss the difficulty of cutting emissions to slow temperature rise around the world. He is expected to focus on the technologies that are missing, but are needed, from the energy transition.
“You often go to conferences where people say, ‘Hey, let’s let companies report their emissions and somehow magically make the emissions disappear, or we’ll just divest the stock,'” Gates told Reuters in an interview earlier this month.
Reality, Gates said, is much more difficult. Many heavy industries that use oil and gas are difficult to deviate from those fuels, and new technologies are needed there. For example, steel still relies on furnaces fired with metallurgical coal.
“If you are a steel company, you are going to report a very large (emissions) number. People still need basic shelter, and we are unlikely to stop building buildings. “
While the shared goal of carbon neutrality is now widely accepted, finding the best way to achieve that goal is much more difficult, Yergin said.
“Previous energy transitions have unfolded over centuries. This is meant to unfold in less than three decades – that’s a really tough lift, ”he said.
Reporting by Jessica Resnick-Ault; additional reporting by Katy Daigle; edited by David Gaffen, Simon Webb and Nick Zieminski