CERAWeek: The Value of Oil and Gas in Meeting Energy and Climate Challenges

Chris Carroll
Posted March 8, 2022

At this time of geopolitical strife and cost uncertainty, Americans want to see industry and government working together to solve national security, energy affordability and climate challenges. That’s exactly what is on display at CERAWeek, a major annual energy conference happening this week in Houston.

While there were differences across some panels, an encouraging degree of commonality emerged during the conference’s first days – especially as chatter picked up about the importance of American energy leadership as President Joe Biden weighed and eventually implemented a ban on Russian oil imports.

“We are united on meeting the world’s energy needs and addressing climate change,” ExxonMobil CEO Darren Woods said.

John Kerry, the former senator, 2004 presidential candidate and currently President Biden’s special envoy for climate, set the tone for the conference Monday morning. U.S. natural gas and oil companies, he plainly stated, “have to have a seat at the table” to meet America’s climate goals.

Given then-presidential candidate Biden’s October 2020 remark that he would “transition away from the oil industry,” Kerry’s comment was a nice return to energy reality. Indeed, the International Energy Agency estimates that nearly half of all energy used globally in 2040 will come from natural gas and oil – even if every nation met their Paris Climate Agreement emissions reduction goals.

It might as well come from America, where workers stand to benefit from energy jobs and tax revenue, as well as energy produced to rigorous environmental standards. API President and CEO Mike Sommers said at a salon dinner Monday night: “It’s a reality that U.S. oil and natural gas will play a key role for decades to come.” He hit back at two extremes at the debate, saying some energy advocates only talk about the need for expanding production while others only broach climate change.

Of course, Sommers said, our industry can handle – and is handling – both.

“Let’s have a real conversation about what’s going to be required to address the dual challenge,” Sommers said, “rather than the fake conversation that is occurring right now, which is we can electrify everything immediately.”

In a fireside chat Tuesday, Occidental CEO Vicki Hollub described her company’s efforts to bring carbon capture to scale and use existing infrastructure to both reduce emissions and reinforce American energy leadership. Meanwhile, Shell USA President Gretchen Watkins said the natural gas and oil industry “brings the skills, the passion and the energy … I think we’re a vital partner in [the climate] challenge.”

The takeaway from Hollub and Watkins: If we think about energy narrowly and rely on outdated assumptions, then we deny ourselves the chance to innovate and evolve.

“I’ve got great faith in the people in this room and the companies that are represented here to continue to innovate and find the solutions,” Chevron Chairman of the Board and CEO Mike Wirth told interviewer and energy historian Daniel Yergin.

Wirth and others called on government leaders to enact pragmatic, transparent, economy-wide policies that encourage research, innovation and results when it comes to increasing U.S. energy production and addressing the risks of climate change. At CERAWeek, Sommers has reminded both policymakers and reporters of API’s Climate Action Framework – the industry’s blueprint for addressing climate change.

Sommers during the Monday dinner reinforced a point the Wall Street Journal hammered home in an editorial – that that our government should seek help from “U.S. workers and shareholders rather than another dictatorship.” A smart thought at a critical time for U.S. energy leadership on the global stage.

Indeed, other high-level executives were united in their support for a strong industry here at home – and the regulatory framework needed to advance it. Hess Corporation CEO John Hess reminded CERAWeek attendees that the U.S. is the largest oil and gas producer in the world.

“It’s very important for the U.S. to stand tall here and ensure the energy security of our country and the world by ensuring a strong oil and gas industry – and recognizing the strategic role it plays in everybody’s lives,” Hess said.

With geopolitical strife, energy costs and environmental issues taking up front-page real estate in recent weeks and months, the U.S. natural gas and oil industry is in the spotlight for energy and climate needs.

“It’s back on the forefront,” ConocoPhillips CEO Ryan Lance said Tuesday. “It should have never left.”