This year’s CERAWeek brought together a record-breaking number of attendees in a crucial and turbulent year for both climate change and the energy industry.
Dubbed Houston’s ‘Super Bowl of Energy,’ the energy conference hosts participation from government officials, policymakers, fossil fuel execs and energy innovators.
With appearances from everyone from Bill Gates to Aramco’s Amin Nasser, the week-long event provided a platform to discuss some of the biggest challenges facing the industry right now and hosted numerous controversial and eye-brow-raising conversations.
Held under the banner of a “multi-dimensional, multi-speed and multi-fuel energy transition,” with the week wrapped up, ESG Mena looks back at what you might have missed.
Energy security & the energy transition
Energy security challenges were put under the microscope last week, alongside discussions about what they mean for the energy transition.
This comes against a backdrop of international conflict, geopolitical tension, growing energy demands, price shocks and supply chain concerns.
“When demand was down and prices were down, it was very easy to see a way towards energy transition, but with Russia/Ukraine (war) and price shocks, energy security is back on the table,” said Daniel Yergin, Vice Chairman of S&P Global earlier in the week.
This framing feeds into the narrative that oil executives are pushing, namely, fossil fuels are here to stay for the long haul.
Although at odds with both climate science and the internationally agreed vision for an end to the fossil fuel era, last week, it was a dominant feature of discourse.
For example, last week, we saw everything from Aramco’s Nasser dispelling the fossil fuel phase-out as a “fantasy” to Petrobras’s CEO warning that rushing the transition will result in a “crisis that we will never forget.”
This year, we’ve seen record-breaking figures from a crisis already unfolding in front of our eyes, with 2023 breaking every climate indicator, and devastation unleashed on the planet, and millions of people.
Indeed, looking ahead, a new report from Global Witness forecasts that emissions from fossil fuels produced by Shell, BP, TotalEnergies, ExxonMobil and Chevron up to 2050 could result in 11.5 million additional premature deaths due to heat by 2100.
Despite this, we’ve seen fossil fuel heavy-hitters rolling back on climate targets, an expansion of fossil fuels, and record profits for fossil fuel giants.
At the event, on lack of progress in the transition, energy execs also shifted focus from corporates onto the consumers, claiming society is “unwilling” to pick up the tab, echoing the words of ExxonMobil’s CEO earlier this month.
“We have opportunities to make fuels with lower carbon in it, but people aren’t willing to spend the money to do that,” said chief executive Darren Woods.
In fact, research shows that increasingly, consumers want the fossil fuel industry to pay the bill, and with all-time high record profits in the industry – there could be some money lying around.
“It’s like a drug lord blaming everyone but himself for drug problems,” commented Gernot Wagner, a Climate Economist at Columbia Business School.
At CERAWeek, however, oil executives suggested that they need incentives to drive things forward.
The LNG debate
As the climate crisis ramps up, many in the energy industry are hailing LNG as a beacon of low-carbon hope as the fossil fuel undergoes a flashy rebranding.
While marketed as a “bridge fuel” that’s less environmentally harmful than coal and oil, LNG is primarily composed of methane, 80 times more potent than carbon dioxide over a 20-year period.
Recent research has even suggested that LNG could be worse than coal—the research paper by Cornell University climate scientist Robert Howarth is currently being peer-reviewed.
While the Biden administration may have pumped the brakes on new LNG export terminals in January, this doesn’t apply to exports from existing terminals and ones already approved; plus, according to Energy Secretary Jennifer Granholm, it is likely to be lifted soon.
The pause has been highly contentious, with critics such as Sen. Dan Sullivan, R-Alaska, citing its “serious consequences” for the US’s national security and the national security of its allies.
Subsequently, pressure has been mounting for the ban to be lifted.
That said, at CERAWeek, energy bosses continued to reveal LNG portfolio expansions and ramped up investments, including from Exxon and Petronas.
TotalEnergies’ CEO Patrick Pouyanné also pointed to the inclusion of “transition fuels” in the UAE Consensus, gas being one of them, saying he was “quite pleased.”
“It’s going to be transformational”
While LNG debates dominated throughout the event, there was also no escaping the grip of AI, which EQT’s Toby Rice predicted could require more power than households in 2030.
“It is going to be transformational. It is going to be huge. It is going to impact every one of your businesses here,” commented Ryan Lance, CEO, ConocoPhillips.
In the energy industry, while AI is pegged to contribute to energy saving and decarbonisation, it is also being used to aid the acceleration of fossil fuel extraction and is creating a new source of demand for the fossil fuel industry due to its massive energy requirements.
Energy industry bets on carbon capture
Alongside the push toward fossil fuel expansion, carbon capture technologies, which were also a point of contention at COP28, are once again being touted as climate change solutions by the fossil fuel industry.
Carbon Capture and Storage (CCS) and Direct-air Capture (DAC) are unproven technologies that are costly both in terms of price and the amount of energy required to power them.
Nonetheless, fossil fuel companies are betting big on the technologies.
Exxon Mobil has started a pilot project for DAC; Occidental Petroleum Corp’s DAC project is 70 per cent complete, and, at the event last week, Petrobras and Mitsui signed an MoU to explore carbon capture.
Hydrogen, on the other hand, while a hot topic last year, received a slightly cooler reception in 2024.
Big oil sparks backlash on transition feasibility stance
While the fossil fuel industry’s downplay of the transition’s feasibility and likelihood undoubtedly overshadowed the event, the naysayers were also met with renewable energy optimism from various parties and drew criticism from climate campaigners.
John Kerry, former US secretary of state under Barack Obama and President Joe Biden’s former climate envoy, for example, contested the words of Aramco’s Nasser.
“Folks, we can win this battle. We can still win this battle. But not if we create a false analysis of where we are, like saying we failed. We haven’t failed.”
Indeed, the IEA found that renewable energy capacity grew at a record rate last year – although still not quickly enough.
Of course, 2023 was also a difficult year for renewables, and the industry faces a myriad of ongoing challenges to overcome – and a high degree of geographical variability – whether insufficient investment, policy uncertainty, or lack of infrastructure.
However, renewable energy solutions did come into view at the event, including from the geothermal perspective, with interest from fossil fuel players as a potential pivot.
Elsewhere, on a panel titled ‘Achieving Tripling of Renewables by 2030: Strategies for Success,’ Masdar CEO Mohamed Jameel Al Ramahi called to ensure the momentum from COP28 – where more than 180 countries pledged to triple renewables – continues. “Troika will act as a bridge between Dubai and Baku, and from Baku to Brazil,” he said.
Bill Gates also took to the stage towards the end of the week, forecasting that Houston could become the ‘Silicon Valley Of Energy.’
The Microsoft co-founder and tech investor is also the founder of two energy companies: Breakthrough Energy, which is aimed at driving forward clean energy solutions and other technologies to achieve net-zero emissions, and TerraPower, a nuclear reactor design and development engineering company.
At the event, Gates also shared optimism about the transition, in contrast to oil execs: “A heroic effort is beginning. I’m very excited about it.” However, the billionaire tech founder and investor warned we “shouldn’t underestimate how incredibly difficult it will be.”
CERAWeek ran from Monday, 18 March to Friday, 22 March 2024, with 8,100 delegates and 1,400 speakers attending from across 80 countries.