CERAWeek Day 3 Recap

All this week, Watershed Analytics is posting complimentary news roundups of the major developments and sideline conversations from CERAWeek.

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LEADING THE NEWS

In “Remarkable Shift,” Granholm Lauds Oil Industry At CERAWeek. Media coverage is casting Energy Secretary Jennifer Granholm’s remarks at CERAWeek, in which she praised the oil and gas industry, as a stark departure from a year ago.

• Forbes (3/8, David Blackmon), for example, refers to “a remarkable shift in tone,” and Bloomberg (3/8, Dlouhy) noted she offered “effusive praise” for oil executives and “the industry’s ‘creative visionaries.’” Her tone “was all the more remarkable when compared with Granholm’s reception at the same gathering last year, when industry executives blamed Biden administration officials for stifling development.”
• Reuters (3/8, Richard Valdmanis and Erwin Seba) also reports “her comments underscored a shift in policy since the early days of the Biden administration,” and Upstream (3/8, Naomi Klinge, Subscription Required) that she “praised the energy industry for upping supply” while urging “continued clean energy support.”
• The New York Times (3/8, Lisa Friedman) highlights that Granholm also said Wednesday, “Make no mistake, enormous energy challenges remain across global energy markets,” but also mentions that she “told oil executives she was ‘so grateful’ for their increases in production.”
• The Washington Examiner (3/8, Jeremy Beaman) reports Granholm’s words came “as many environmental interest groups and some lawmakers in Congress push for policies to block new oil and gas development.”

Granholm Touts IRA, Notes Biden’s Backing For Permitting Bill. Reuters (3/8, Liz Hampton and Ron Bousso) points out Granholm also touted the clean energy “carrots” enacted by the Administration, stating she “makes no apologies for the IRA.”

• In a dispatch headlined “US Energy Regains Its Swagger While Rest of World Gets IRA Envy,” Bloomberg (3/8, Kevin Crowley and Jennifer A. Dlouhy) notes Granholm went on to say “there’s nothing wrong with ‘a little friendly competition,’” and added, “As we keep saying, have at it. You should do the same thing.”
• Agence France-Presse (3/8) quotes Granholm as saying, “The Biden-Harris administration has made the United States the most attractive investment landscape for new energy and decarbonization technologies. …  The United States will be the global leader of this transition.”
• S&P Global (3/8, Binish Azhar) reports, meanwhile, that the Secretary “expressed President Joe Biden's support for a bill” introduced by Sen. Joe Manchin (D-WV) in December that “outlined a push for permitting reform,” which “remains a hot topic for producers.” Said Granholm, “It shouldn't take a year to permit new projects in the US.”

Administration Announces $6 Billion For Heavy Industry Decarbonization. Reuters (3/8, Timothy Gardner) reports “the Biden administration said on Wednesday it is directing $6 billion in funding to speed decarbonization projects in energy-hungry industries like steel, aluminum and cement making that contribute nearly 25% of U.S. greenhouse gas emissions.” Granholm “said the program will help cut pollution while ensuring the competitiveness of American manufacturing.”

CERAWEEK SPOTLIGHT

Oil Industry Boosts Investment In Climate Tech. Politico (3/8, Arianna Skibell) reports that while “by most metrics, the oil industry is thriving,” it “is also under increasing pressure to address the climate crisis, and it wants a piece of the huge pot of federal money available for low-carbon technology.” The industry is “now investing in carbon capture and other clean energy technologies to address these new realities — while preserving their core business of pumping oil.”

• Politico (3/8, Ben Lefebvre) reports that at CERAWeek, “the signs that the traditional oil industry is changing were everywhere.” The conference, for example, “features more sessions on hydrogen than on oil, a word that was uttered by only a few of the speakers on the main stage during the first two days.”

Energy Majors Resisting Shift Away From Fossil Fuels. The Washington Examiner (3/8, Jeremy Beaman) writes that even though “energy giants such as Chevron and BP are sitting on vast amounts of cash from a record 2022” and have new financial incentives thanks to the Inflation Reduction Act, they are “shrugging off pressure” to focus on renewables “as they anticipate high demand and earning potential in oil and gas persisting for years to come.”

• Energy Intelligence (3/8, Casey Merriman) says “the staying power of oil and gas makes the funding of natural gas and the industry’s decarbonization more acceptable.” Ecopetrol’s Jaime Caballero said at CERAWeek, “I think there’s far more moderation in terms of the language around this ‘black and white’ dilemma.”

Hess Expects Tighter Oil Market, Lance Concerned About Permian. Hart Energy (3/8, Chris Mathews, Subscription Required) reports Hess CEO John Hess “expects the global oil market to move tighter later this year,” while ConocoPhillips CEO Ryan Lance is concerned about the “longer-term problem” of “flattening production in Permian Basin later this decade.” The two appeared together during a panel discussion at CERAWeek.

• The Wall Street Journal (3/8, Collin Eaton and Benoît Morenne, Subscription Required) says “frackers are hitting fewer big gushers in the Permian Basin, America's busiest oil patch, the latest sign they have drained their catalog of good wells.”

Analysts Unsure Oil Market Can Weather More Disruption. Energy Intelligence (3/8, David Pike, Chris Raine, and Casey Merriman) writes that while oil markets took “sanctions and other disruptions from the Ukraine crisis largely in their stride” in 2022, analysts are unsure “about their ability to cope with any further disruption to supply this year.” Trafigura chief economist Saad Rahim said at CERAWeek, “When was the last time we had a year without some form of geopolitical disruption in the oil market? I can’t think of one.”

Chevron, Shell Executives Say Energy Supply Chain Must Be Reinvented. Upstream Online (3/8, Xu Yihe, Subscription Required) reports Chevron and Shell executives said at CERAWeek that net-zero emissions strategies “will require a re-invention of the energy supply chain to allow suppliers and buyers to monitor the emissions from the entire chain.” Shell EVP Clare Harris cited inflation, COVID, and the war in Ukraine as drivers of “massive disruption to global supply chains” in 2022.

“Hipper, Younger” Innovation Agora Draws “Throngs.” Energy Intelligence (3/8, Luke Johnson) writes, “Fervor has grown stronger and more palpable around energy transition solutions — evidenced by throngs of delegates and curious onlookers” who turned out for Innovation Agora, “the conference-within-a-conference known collectively as CERAWeek by S&P Global. It’s a hipper, younger sibling to the more staid and conventional” main CERAWeek event.

ABS CEO: Shipping Key To Clean Energy Transition. Gulf Oil and Gas (3/8) reports ABS CEO Christopher Wiernicki “underscored the pivotal role of shipping in driving the global clean energy transition in a series of appearances” at CERAWeek. He said, “For shipping, the challenge and opportunity lies in two stories: shipping for shipping, which is the decarbonization of our industry and shipping for the world, which highlights shipping’s role as an enabler of the global green energy transition.”

Utimco CEO Blasts UN Climate Plan. Hart Energy (3/8, Nissa Darbonne, Subscription Required) reports Utimco CEO Britt Harris blasted the UN climate plan as “‘completely wrong’ and ‘dystopian’” in remarks at CERAWeek. He said, “We're in the early stages and we're going in the wrong direction.”

Permian Gulf Coast Coalition Protests Outside CERAWeek. The Houston Chronicle (3/8, Kyra Buckley, Subscription Required) reports that about a dozen activists “protested Gulf Coast fossil fuel developments Wednesday outside of CERAWeek.” The Permian Gulf Coast Coalition “organized the protest, which included activists from communities in Texas and Louisiana calling for an end to oil and gas export terminal projects in the Gulf of Mexico.”

• Houston Public Media (3/8, Patricia Ortiz) offers a digest of protesters’ activities during the five-day conference.

Singing Protester Interrupts CERAWeek Session. Upstream (3/8, Naomi Klinge) recounts “a protester interrupted the CERAWeek by S&P Global event on Wednesday while TotalEnergies chief executive Patrick Pouyanne was speaking.” The protester “chanted that the talks were all ‘brainwashing and lies’ before she was removed from the room.”

RUSSIA/UKRAINE IMPACT

Yergin: Russian Production To See “Slower Decline” Than Projected. Bloomberg (3/8, Alix Steel and Catherine Traywick) reports S&P Global Vice Chairman Dan Yergin said Wednesday that “despite the exodus of almost every Western oil company, Russia can maintain crude production longer than many expect.” Yergin told Bloomberg TV, "There’s going to be a decline but it’s gonna be a slower decline,” as opposed to “the dramatic fall off a cliff that some people projected a year ago.”

European Official: Putin Unwittingly Aiding Energy Transition. Hart Energy (3/8, Joseph Markman, Subscription Required) reports Paula Pinho, director at the European Commission’s Directorate-General Energy, said at CERAWeek that Russia’s Vladimir Putin “may have succeeded where global policymakers failed: speeding up the transition away from fossil fuels.” Said Pinho, “I have no doubts that, as far as the EU is concerned, what happened over the past year accelerates the energy transition immensely, and that is the irony — that it’s a clear achievement by Putin.”

PKN Orlen Says It Has Pivoted Away From Russian Oil. The American Journal of Transportation (3/8, Lucia Kassai) reports PKN Orlen, “Poland’s largest fuelmaker,” has “all but pivoted away from Russian crude at its refineries in Poland, Lithuania and the Czech Republic a year after its neighbor invaded Ukraine.” Said Grzegorz Markiewicz, the company’s executive director, “We substituted Russian oil without curtailing oil processing. …  Refinery margins are still good and we are taking full advantage of that.”

Russia Says CERAWeek Withdrew Accreditation To Its Diplomats. Russian Consul General in Texas Alexander Zakharov told Russian news agency TASS (3/8) that “the accreditation of Russian diplomats was withdrawn at the last minute by the organizers of the international energy conference CERAWeek in Houston.” Zakharov called the situation “completely incomprehensible.”

BIDEN ADMINISTRATION NEWS

Manchin Blasts Biden’s “Radical Climate Agenda.” The Washington Post (3/8, Timothy Puko) reports that “in his latest clash with the White House,” Sen. Joe Manchin (D-WV) “sharply criticized the Biden administration Wednesday for delays on a new federal offshore drilling plan.” Said Manchin, “They are putting their radical climate agenda ahead of our nation’s energy security.” The Post adds “leaders at the API and other industry executives at the CERAWeek energy conference…have said they are frustrated that the administration has let so many deadlines lapse.”

Texas Power Regulator Slams “Unachievable” Clean Air Rules. Bloomberg (3/8) reports “the top Texas power regulator blasted federal clean-air requirements, saying they threaten to shut thousands of megawatts of coal-fired generation on a state grid that is becoming heavily reliant on wind and solar.” Peter Lake, chairman of the Public Utility Commission of Texas, said on a panel at CERAWeek, “We are getting force fed these unachievable intense clean air requirements from the federal government.”

U.S. INDUSTRY NEWS

Executives Say Governments Must Simplify Hydrogen Rules. Reuters (3/8, Stephanie Kelly, Subscription Required) reports energy executives appearing at CERAWeek this week agreed that “governments worldwide need to simplify rules around hydrogen supply to attract investment and scale it up to become competitive enough” to replace fossil fuel use in heavy industry. Exxon Mobil CEO Darren Woods said, “The market for hydrogen and people's willingness to pay a premium for low-emissions fuels I think hasn't quite taken off yet.”

Falling Natural Gas Prices Have “Spooked Investors.” Reuters (3/8, David French and Shariq Khan) reports that the “freefall in U.S. natural gas prices has upended the acquisitions market for gas producers and spooked investors.” BP chief economist Spencer Dale said at CERAWeek, “If we look back over the last year, one thing we've learned is how vulnerable our energy system is to relatively small shifts between demand and supply.”

NextEra CEO Bearish On Offshore Wind. Reuters (3/8, David French) reports NextEra CEO John Ketchum said at CERAWeek that offshore wind “is a bad bet due to the complications of installing and maintaining infrastructure at sea and the high cost of power transmission to electricity onshore.”

INTERNATIONAL INDUSTRY NEWS

UK Agency To Prioritize Bringing Natural Gas To Market Quickly. Reuters (3/8, Ron Bousso) reports the head of the UK’s North Sea Transition Authority said in an interview at CERAWeek that the agency “will prioritize companies aiming to bring natural gas to market within months.” Stuart Payne said, "We are doing it slightly differently this time because we are deliberately prioritizing sequentially those who can bring gas to market very fast."

Report Links Southeast Asia Growth To Natural Gas Access. Reuters (3/8, Curtis Williams) reports that the preliminary findings of a soon-to-be-released study by the Asia Natural Gas and Energy Association indicates that Southeast Asia's “future economic growth and commitments to net-zero emissions goals will weigh heavily on the region's access to affordable natural gas.” The group’s CEO Paul Everingham said, “Unless there is additional gas put into the Asia Pacific…Southeast Asia will likely remain energy poor.”

Asian Natural Gas Demand Recovering. Upstream Online (3/8, Xu Yihe) reports Asian natural gas demand “has shown signs of recovery” in the aftermath of COVID, with nations “looking to North America for additional supply. New demand is driven by increased economic activities particularly in China, which was locked down for most of last year.”

Petrobras CEO Shifts Away From Parity In Pricing. Argus Media (3/8) reports Petrobras CEO Jean Paul Prates said at CERAWeek that the company “will refocus its fuel pricing policy to use international prices as a reference — rather than aim for parity.” He also said that the government of “new leftist president” Luiz Inacio Lula da Silva “has not intervened in pricing decisions in the company.”

• Reuters (3/8, Gabriel Araujo and Marta Nogueira) reports Petrobras said Prates “met with executives from other oil majors at the CERAWeek conference in Houston to evaluate potential future partnerships.”

Egypt’s El Molla Meets With Honeywell CEO. Egypt Oil & Gas (3/8, Fatma Ahmed) reports Egypt’s Minister of Petroleum and Mineral Resources Tarek El Molla met with Honeywell CEO Lucian Boldea on the sidelines of CERAWeek “to discuss ways for boosting cooperation.”

TotalEnergies CEO: “Gas Is Good.” Natural Gas Intelligence (3/8, Kevin Dobbs) reports TotalEnergies CEO Patrick Pouyanné says natural gas “is vital to ensure energy reliability now and for years to come.” Speaking at CERAWeek, Pouyanné said, “Gas is good. We need reliable power for our customers.”

Eavor Finalizes Geothermal Power Project In Germany. Axios (3/8, Ben Geman) reports that in “the latest sign of growing support abroad and in the U.S. for geothermal power and heat,” Eavor this week “finalized a contract for roughly $96 million in grant financing from the EU Innovation Fund for a project in Germany, CEO John Redfern said in an interview.”

Energy Ministers From Three Canadian Provinces Attend CERAWeek. CBC News (3/8, Kyle Bakx) reports energy ministers from Alberta, Ontario, and Quebec are at CERAWeek “looking to grab some attention on the world stage and drum up investment to grow their industries back home. … It's the first time Quebec has had a presence at the summit.” Quebec's Associate Minister for Economy Christopher Skeete said, “We're looking for investments, we're looking for partners, and we're also here to show people that Quebec is open for business.”