NEW YORK (Reuters) – Former U.S. Secretary of State Mike Pompeo took the stage at the world’s largest energy conference in 2019 to declare an era of U.S. dominance after a decade of rapid shale development that made the United States the world’s largest oil and gas producer.
Two years later, the oil industry is recovering from the worst recession it has ever experienced, after measures to contain the coronavirus have prevented billions of people from traveling and eliminated a fifth of the world’s demand for fuel. The US fossil fuel industry is still recovering after the loss of tens of thousands of jobs.
The pandemic also accelerated the energy transition, stopping a steady increase in fuel consumption that could have continued for several years without decreasing. Oil demand may never recover from this blow. This year, the CERAWeek conference in Houston is entirely virtual and several panels are dedicated to the transition to the low carbon economy of the future, hydrogen technologies and climate change.
Microsoft Corp co-founder Bill Gates, U.S. climate envoy John Kerry, and speakers from Amazon and renewable fuel giant Iberdrola are among the speakers.
“The tone is different: there is a theme that permeates the entire conference and it is the energy transition,” said CERAWeek founder Dan Yergin, vice president of IHSMarkit.
Last year’s conference was one of the first major global events to be canceled when the pandemic started to spread and quickly made it impossible to bring together thousands of people from 85 countries at the conference sites.
Since that time, many of the world’s top oil companies have set ambitious targets for transferring new investments to technologies that will reduce carbon emissions to slow global warming. UK-based BP Plc largely discarded its oil exploration team; US auto giant General Motors Co has announced plans to stop making gasoline and diesel vehicles in 15 years.
To be sure, the 2021 program includes oil leaders who normally appear at CERAWeek. They include Mohammed Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC), and the chief executives of Exxon Mobil, Total, Chevron and Occidental Petroleum.
But they will participate in panels focused on the energy transition. Barkindo will discuss what kind of oil and gas recovery there will be when future demand is challenged. BP’s Looney will join Andy Jassy, who will become CEO of Amazon.com Inc later this year, on a panel on reinventing energy. Occidental’s CEO, Vicki Hollub and Ahmed Al Jaber, UAE’s minister of state, are programmed to combat the reduction of carbon emissions.
Oil companies are under increasing pressure from shareholders, governments and activists to show how they are changing their fossil fuel businesses to renewables and to accelerate this transition.
“This year’s program reflects the reality of the transition to a zero net future,” said Julien Perez, vice president of strategy and policy at the Oil and Gas Climate Initiative, a consortium of large oil companies.
Yergin said Gates will discuss the difficulty of reducing emissions to slow the rise in temperature around the world. He must focus on the technologies that are missing, but are needed, in the energy transition.
“You will often go to conferences where people say, ‘Hey, we are going to make companies report their emissions and somehow make the emissions magically disappear, or we are just going to sell the shares,” “Gates told Reuters in an interview this month.
The reality, said Gates, is much more difficult. Many heavy industries that use oil and gas find it difficult to ditch these fuels, and that is where new technologies are needed. Steel, for example, still depends on furnaces powered by metallurgical coal.
“If you are a steel company, you are going to report a very large number of (emissions). People still need basic shelter and we are unlikely to stop building buildings. “
While the common goal of carbon neutrality has now been widely accepted, finding the best way to achieve it is much more difficult, said Yergin.
“Previous energy transitions have developed over the centuries. This should happen in less than three decades – it’s really hard work, ”he said.
Jessica Resnick-Ault reporting; additional reporting by Katy Daigle; edition of David Gaffen, Simon Webb and Nick Zieminski