We started the final day on the other side of the world in India. Daniel Yergin started by presenting Prime Minister Modi the “CERAWeek 2021 Global Energy and Environment Leadership Award”. He graciously accepted and then proceeded to talk about his plan to continue developing India. But he started by looking to the past. In Indian culture, trees and animals a sacred and there is a bond between man and nature that goes back to the beginning of history. The Prime Minister feels the most powerful way to fight climate change is through behavioral change. India is making large scale behavioral change in several ways. One example is changing over from incandescent light bulbs to LED’s. Another is changing over from wood for cooking to LPG. These seem like small steps but have profonde long term effects on his country in many unseen ways like health. Modi told the audience about the new buzz word that is motivating many of his people i.e., waste to wealth. An example of that is the growing use of ethanol as a blending component in gasoline. While the percentage is small today, he says it should grow to 20% by 2025. All these examples when combined mean large behavioral changes. The Minister referenced several times his mentor Mahatma Gandhi and what a visionary he was regarding protecting the environment and sustainability. We could all learn from that man.
We then heard from Kathy Castor from the 14 th Congressional District in Florida and Chairperson on a Select Committee on the Climate Crisis. The Committee has published a detailed plan. Part of the plan is to have a carbon free power generation by 2035 in the USA. Mr. Yergin asked if the actions needed to reach this goal will get bipartisan support? The congresswoman talked about how the whole carbon reduction plan of the Biden Administration is a moral obligation to our kids and everyone should be for it. The plan to Build Back Better will create better paying union jobs and keep jobs from going overseas. Ms. Castor also commented on the Texas winter storm URI, by saying that Texas should be part of the national grid so it can be controlled from Washington.
From politics we next move to financing energy projects. All the participances agreed that the appetite for investment in energy has gone down significantly in the last year. Investors are looking for better returns in a shorter period. Raising capital will get more challenging. On the positive side there will be winners and losers and that oil and gas will be around for a long time. Bobby Tudor, Chairman of Tudor, Pickering, Holt and Co. summed it up by stating that in the long run “greed trumps fear”.
Between all the politicians Mr. Yergin was able to welcome the Mayor of the host city Sylvester Turner. Mr. Tuner has been attending CERAWeek for many years in person as Mayor of Houston, the energy capital of the world. The Mayor looks forward to CERAWeek returning to Houston live and in person. The conference is a big part of Houston.
The Politicians ruled the schedule today and Senators Lisa Murkowski (R) from Alaska, and Senator John Cornyn (R) from Texas were next. Both have worked together on energy legislation. Senator Murkowski suggested that she was having buyer’s remorse having not supported President Trump. Trump had opened Alaska to developing its natural resources which is immensely popular in her home state. The remorse comes as Biden, on his first day, shut down Alaska to development. The new President “smacked Alaska hard”.
John Cornyn said the polar vortex hit Texas hard and that ERCOT, the state energy regulator was not prepared. Their will have to be a review of what happened and then recommendations can be made to better prepare for the next storm. He has other concerns, like he is not sure whether Biden is just pausing oil and gas production or it’s a moratorium. This is a big concern for Texas as there is a lot of federal land in the state that will be impacted by any cuts. This has a great impact on the states revenues. He pointed out that Texas leads the energy business in production and that it really is a technology business. As an example, he mentioned the zero-emission power plant outside Houston. There are many more examples.
Staying in the US Senate we then go to meet Joe Manchin (D), the new Chairman of the Energy Committee. He is now known as the most powerful person in the Senate because he is the swing vote that can pass or kill any new legislation. In greeting Mr. Yergin, he expressed his feeling that this virtual conference was the next best way to get together other than in person. One of the first comments and question was that 8 Presidents have talked about USA energy independence and now that we have it how we are going to keep it. The senator responded with several points. The first was a quote from Benjamin Franklin that when asked if we had a monarchy or republic, he said a republic if we can keep it. Second, that he was not in favor of stopping construction of the Keystone pipeline. That it is better to buy same quality crude from our neighbors and friends than people that do not like us like the current government of Venezuela. For energy independence, hydrogen should and can be a game changer. In any case you also need nuclear as base load and to make pink hydrogen.
Another road toward independence is electric vehicles (EV’s). The big problem here is the supply chain for the components needed to build the required batteries. Currently the USA is dependent on one country, China. Until the USA ramps up its own production it will be susceptible to supply disruptions. More mines will need to be permitted in the USA.
Senator Manchin also explained that one of the Committees’ main functions will be cyber security oversite. There is the fear that future wars will be against our infrastructure by cyber-attacks.
It is now time to conclude CERAWeek 2021. Even in virtual mode it was a great success.
The name of this year’s conference was “The New Map: Energy, Climate and Charting the Future”
Daniel Yergin, Chairman of CERAWeek is also the author of the recently published book called “The New Map: Energy, Climate and the Clash of Nations”, a book that looks at how oil and gas powers industries and influences the world of politics.
Goodbye for now and until CERAWeek next year.
By Todd Peterson for Petroleumworld / March 5, 2021
