05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –       

CERAWeek Chronicle -Todd Peterson

CERAWeek’s 40th anniversary!

By Todd Peterson

                                                                                       Houston, 7-11 March 2022

CERAWeek 40

By Todd Peterson for EnergiesNet.com

DAY – 1

After 2 years of virtual meetings CERAWeek by S&P Global is back, in person, in the energy capital of the world. Houston and the Hilton Americas are always proud to host this important event. Mr. Daniel Yergin and Mr. Jamey Rosenfield are the founders. 2022 marks the 40th anniversary of CERAWeek. It is one of the most important gatherings covering energy in the world. But the most important aspect of the conference is the quality of speakers, companies, government officials, scholars, entrepreneurs, press, and individuals participating. It also coincides with another fantastic Houston event: The Rodeo.

In a few months, Houston will also host the Offshore Technology Conference.

The theme of this year conference is “Pace of Change: Energy, Climate and Innovation”. Challenging. Unfortunately, the conference was overshadowed by the invasion of Ukraine by Russia. Crude prices, during the conference, soared to near record highs. Every session had to have some comment or opinion on Ukraine/Russia situation.

Opening day covers everything from energy to geopolitics. After an introduction by Mr. Daniel Yergin, the opening day speech was by the USA Presidential Envoy for Climate, Hon. John Kerry a vocal opponent of the fossil fuel industry. In fact, he advocated for the end of fossil fuels in the next 10 years or sooner if possible. Mr. John Kerry stated that fossil fuels and climate change are the most dangerous threat facing the planet. His concern is that the Ukraine situation will derail the climate change initiative and green movement, and this could bring an end to the world sooner. This is also the thinking of the current administration in Washington DC.

Following John Kerry, there were many other speakers who are supporters of the fossil fuel industry. The CEO’s of Exxon Mobil, Chenier Energy, Hess, Petronas, Total, Saudi Aramco, bp, Shell and many more. Their position is that oil and gas is becoming cleaner and helping the environment.

There were more politics on the program with speeches from the President of Colombia. The Hon. Iván Duque Marquez. Colombia has been an oil producer for over a hundred years. They also have the potential to be a gas producer, but the future is in renewables.

There were also speeches from representatives of the European Union and scholars from prestigious schools like Georgetown, Harvard Kennedy School, and Carnegie.

During the conference there were also other speakers representing the current Administrations who dislike fossil fuels such as the head of the EPA, Sec. of Energy, and the FERC. All have the same position about fossil fuels as John Kerry to end the use of fossil fuels.  An interesting debate during the conference.

The Hon. Daniel Sullivan, US Senator from Alaska was one of the last speakers of the day. The Senator questioned why the current administration would actively reduce fossil fuel production in the USA in favor of buying oil and gas from enemies like Russia, Iran, and Venezuela. Alaska, which has been greatly impacted by the Biden Administration can produce some of the cleanest energy on the planet By producing in the USA we would not transfer our wealth overseas. Alaska by itself could replace all the oil being imported from Russia and then some.

One of the day’s highlights was later when Jamey Rosenfield (co-founder of CERAWeek) came out playing bag pipes to open the evenings dinner session. He had never done this at previous CERAWeek conferences and few people even knew he had this talent. S&P Global experts, during dinner, gave an overview of the current energy market and the program for the week ahead.

Day 2

Oil is the focus of day 2. It is also International Woman’s Day.

While the current administration in Washington is actively trying to end fossil fuels the future for oil appears to be very bright.  Most of the participants at CERAWeek, the experts, oil companies, NOC’s and OPEC see demand increasing for many years. The Sec. General of OPEC, H.E. Mohammad Sanusi Barkindo, stated that their analysts see population growth of 20 % by 2045 and that oil will represent 50% of energy consumption then. While a percentage drop vs renewable, the fact is production of crude oil will increase, not decrease.

The Secretary went on to say that OPEC will continue to supply oil to the market despite the current unprecedented situation. When asked why OPEC would continue working with Russia, given the invasion of Ukraine, he replied that “OPEC is not a political organization” and would continue honoring the Declaration of Cooperation singed with Russia in 2017.  Mr. Barkindo then said there are also restrictions in the OPEC Charter. He then repeated that OPEC is not a political organization. His Excellency reaffirmed OPEC’s studies that the world will require more oil. Oil will be a part of the growing world economy for many years to come. That we live in “an oil civilization”.  Mr. Barkindo reminded the audience that OPEC is celebrating an anniversary and will hold its next meeting in Baghdad on the 25th of March. Juan Pablo Perez Alfonso originally initiated the formation of OPEC in 1960. He was the energy minister from Venezuela. This was in reaction to the oil import restrictions started by the USA in 1959. At the time Venezuela was the largest supplier of crude oil to the USA.

EVs (electric vehicles) were an extremely popular topic. The guest speaker at lunch was RJ Scaringe, CEO of Rivian. Rivian has been developing EV trucks for many years. Mr Scaringe started the company with a loan from his father. The company was founded in 2009. It is one of the first innovators in the EV field along with TESLA.  Currently there are many others trying to break into this industry. The future for EVs is enormous. Today, the largest market is China, but the rest of the world is not far behind.

For dinner there was a Special 40TH Celebration “CERAWeek Sings.” A Broadway style musical and tribute to the history of the oil and gas business in the USA. It was a hit.

Day 3

This is gas day. This year there is a particular emphasis on LNG because of the recent invasion of Ukraine by Russia. Europe has been shown to be overly dependent on Russian natural gas. Many feel that more LNG form the USA might have reduced the chances of President Putin invading Ukraine.

Two of the most successful pioneers and innovators in the LNG business are Mr. Michael Smith and Mr. Charif Souki. Both speakers today. Partners for many years until they split up to developed Freeport LNG and Chenier separately. They started Cheniere together but parted ways early on. Cheniere and Freeport started as import terminals during the supposed gas shortage prior to the shale boom. Dan Yergin named it the shale gail. As the market changed, they converted their terminals to export. Mr. Souki later went on to start Tellurian LNG with Martin Houston (ex BG). Tellurian is also an export project waiting for government approvals.

In a separate session, Octávio Simões, CEO of Tellurian, described their Driftwood project in more detail. He was joined by Jill Evanko, CEO of Chart Industries. The two companies are working together to build Driftwood LNG. They were both on a panel to discuss Innovation & the Future of Gas. During the panel Mr. Simões revealed that they are planning the first fully encapsulated underwater compressors that will reduce their GHG. Ms. Evanko and Chart are working on optionality in their designs and how to make small scale LNG ready for producing LNG.

The Secretary of Energy of the USA, Hon. Jennifer M. Granholm (previously Governor of Michigan) was the speaker during the luncheon. She gave a mixed message that the world needs more oil and gas production and at the same time needs to replace oil and gas. We need more oil and gas in the short term because of the Ukraine situation and to bring down inflation. On the other hand, we need to replace oil and gas with renewables to save the planet. The Sec. confirmed that the current Democratic administration is committed to the goals of eliminating fossil fuels.

She also spoke about the National Laboratories. There are 17 Labs, some dating back a hundred years. The Labs are all under the administration of DOE and do research on everything under the sun. Their research has produced countless innovations and contributed many advances in science and technology. All to helped improve lives.

Mike Sabel, the CEO of Venture Global, spoke of his company’s innovative project in Louisiana. In fact, it isn’t one project but several. All along the Louisiana coast. They are close to major pipelines and close to Henry Hub. Their modular construction design is aiming at reducing the cost of production and increasing reliability. Location is a major factor. First gas is expected in 2024. Customers are lining up.

There are many LNG export projects in the USA, Canada and Mexico. These are all being delayed primarily because of regulatory matters. Once the regulatory issues and commercial contracts are satisfied the financing will follow.  

While yesterday was the official International Women’s Day, CERAWeek celebrated today with the Women in Energy Dinner. Leanne Todd of S&P Global was the Chair with special guest, Fatema Al Nuaimi – CEO- ADNOC LNG, Tania Ortiz Mena – President Mexico, Sempra Infrastructure, Dimitra Manis – EVP Chief Purpose Officer S&P Global, and Geraldine Richmond – Undersecretary for Science and Innovation at DOE.  An impressive lineup with each giving remarks about overcoming challenges arrive where they are today.

 Ms. Richmond recalled that when she was growing up in Iowa her mother repeatedly told her that she had to get a job because a woman could never count on a man to provide for her.

CEO Nuaimi, an engineer, told the audience about how things were when she started. There were lots of men around and engineers worked in the mud, and it wasn’t a place for women. She overcame that.

Señora Mena worked previously at PEMEX, a very male dominated organization, but she overcame. Her expertise led her to become President of Sempra Infrastructure Mexico. In her closing remarks she emphasized the importance of women supporting women to be able to advance in a male dominated society. With a similar story of growing up in a male dominated country, India, Ms. Manis told a story about her mother and how women in India were some of the first tree huggers in the world. In her village women would protect the forest from being cut down by literally hugging trees (Jhappee in Hindi).  She had a lot of resistance to get where she is today but she overcame.

Day 4

Power makes the world go around. Electricity and how it is produced are in the spotlight today. The future of EV’s depends on charging your vehicle. There have been many innovators since the invention of electricity. We had Edison, Westinghouse, and Tesla to name a few. Fire, whale oil, coal, oil and gas, nuclear, geothermal, wind and solar. What will be the next new source of energy? As per many presentation at CERAWeek, the next new wave may come from hydrogen.

Power generation requires large investments. To power a country requires massive investments. Just to power a home requires a large investment. The future of power generation requires innovation. AES, bp, EDF, Shell, and many others are all focused on providing the next fuel to power or world. The good thing about hydrogen is that it is everywhere 24/7.

In addition to the CERAWeek presentations, which were in the Hilton Americas, Agora Innovations had several events running concurrently making presentations about the future of hydrogen.  Hydrogen has a promising future in power production, storage, and carbon management. Hydrogen can help in decarbonizing the planet. There were other important presentations about nuclear continuing to supply power. There could still be a future in nuclear?

One of the highlights of the day was during lunch when Dan Yergin was interviewing David Rubenstein. Mr. Rubenstein is difficult to categorize other than an extraordinary person. He is the co-founder of the Carlyle Group, a large Investment bank. Grew up in Baltimore, son of a humble Jewish family. Went to school at Duke University and got his J.D. degree from University of Chicago Law School. A philanthropist, TV host, comedian, politician, investment banker, family man. Believes in no boundaries to what one can do. He is very intelligent which makes him also entertaining. During the interview he turned the tables several times on Mr. Yergin and asked him questions. One was what the price of oil will be next week?  Good question from an IB. Oil prices had been spiking during the week. Mr. Yergin replied with it was not his job to predict oil prices. He quickly fired back with another question, why Mr. Rubenstein left being a lawyer and went into investment banking. His answer was that he could make a lot of money. With the money he has made he as able to buy a copy of the Declaration of Independence and the Magna Carta. Both donated.  It was an intriguing discussion between the two.

The speakers at dinner were Patti Pope, CEO of PG&E (she formally had worked at Consolidated Michigan-CMS), and James D. Farley, Jr. CEO of Ford Motor Company.  He started working at Toyota even though he grew up in a household where his grandfather had worked for Henry Ford building model T’s. After Toyota, he went to work for Ford caring on the family tradition and has worked his way up to the top.

During the interview with Mr. Yergin the two CEOs announced a JV between the two companies to work together on developing a network of charging stations in California. A marriage made in heaven and a model for the rest of the country. Their business model revolves around the bidirectional auto. Fords F-150 is a good example. The auto acts as a battery that stores energy to be used to drive, use to power your workspace away from home or power your home. This, on a large scale can transform the auto and power generating industries. Ford is committed to EV’s and are currently sold out of EVs for the next several years. Because of this Ford has split the company in two. One too concentrate on the internal combustion engine and the other to build electric vehicles. Mr. Farley said that their biggest challenge was the value chain. Everything from rare earth metals to semiconductor chips. Today’s cars have at least 350 chips. Rare earth metals from overseas are needed to build the batteries. Going forward they are committed to bring that under their control and not depend on foreign suppliers.

Ms. Pope started work at PG&E after the Paradise, California fires and was concerned about moral. On her first day at work, just arriving from Michigan, she found a line crew repairing lines. They did not know who she was and could not stop to talk to her until they finished. When they finished their work, they spoke. To her surprised, the crew were long time employees and loved working at the company. Their whole family and neighbors were strong supporters of PG&E.

Leading the company forward, Ms. Pope sees a need to reinvent the grid to supply the ever-growing requirements to charge EVS. At the same time, she recognizes the need to use natural gas to produce power for many years to come.

Their concluding thoughts were supporting EVS. That the union between a power distributor and an EV manufacturer is the future.

Day 5

The final day and a shorter day. Politicians were the main speakers.

The Hon. Sylvester Turner, Mayor of Houston welcomed CERAWeek back to the energy capital of the world, Houston. The conference has a huge impact on the city and the energy world and was missed. The city is looking forward to another CERAWeek next year. The dates are 6-10 March 2023.

Senators John Cornyn from Texas and Joe Manchin from West Virginia followed the Mayor. While they are from different parties, they both agreed that the USA should produce more of its own energy. They both do not like buying oil from Americas enemies like Russia, Iran, and Venezuela. Like Alaska and West Virginia, there are other states that are having their production shut in by the Biden Administration in Washington. The fact is, that until the Democrats took power in Washington, the USA was a net exporter of energy. Crude oil, refined products and LNG export terminals were being built all over the USA.  The Bidden administration is delaying approval of new export terminals. Both Senators question a policy that will not make the USA energy independent.

Final observations.

A very busy week with many, presentations, dialogues, plenaries, too many to count. It was also a great opportunity to see old friends and meet new ones.

Innovation Agora @ CERAWeek deserves special mention. Over the years Agora has grown to be a conference within a conference. While part of CERAWeek it takes place in the George R Brown convention center adjacent to the Hilton.

During the conference you could meet, in person, so many important people in the hallways.

Innovation is the key word that describes Agora week. The list of contributors is too long to mention. All of them are the who’s who of energy and technology companies. Agora @ CERAWeek provides start-up companies, entrepreneurs, and investors a place to meet and exchange ideas. Agora, provided studios, pods, hubs, and the Agora Café where all could meet in a small quite setting. Besides the info desk, the main meeting points to hear presentations were the Hydrogen Hub and the Carbon Capture Hub. Everything from Green Hydrogen (pink and blue also), Geothermal, Cyber Security and Carbon Management. Hydrogen was promoted as the next wave in storing energy from wind, and solar.  Of special interest was how to decarbonize planes, trains, ships, and autos. Hydrogen?

In addition, as a special bonus, there were several book signings by very prominent authors like Walter Isaacson, author of Leonardo DaVinci, Angela Stent, author of Putin’s World, Lord John Browne, author of Make, Think, Imagine: Engineering the Future of Civilization.    

It is also worth noting a noticeable increase in the number of women attending. A good trend showing their growing participation in the industry and in top management.

There were many attendees from all over the world. Noticeably, there were some missing, like Carlos Vecchio, Ambassador to the USA from Venezuela. His country has the largest oil reserves in the world. It is time to pack our bags and head home. It was a great conference and hopefully there will be many more without having to ZOOM.

EnergiesNet.com 03 23 2022

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