Reuters/Kaylee Greenlee
CERAWeek, the annual gathering of the energy elite in Houston, Texas, is an intense crash course in the state of world oil and gas markets, geopolitics and all the technological paraphernalia that keeps the global economy turning.
There is an unspoken rivalry between CERAWeek and Adipec – the autumn gathering in the UAE which also draws a global energy audience – but in the era of President Trump and American “energy dominance”, Houston is the place to be in 2025.
It’s difficult to distil the sheer weight of information that’s been laid out before me over the past week of dawn-to-early-hours days and many conversations with energy leaders.
But – at the risk of over-simplifying – here are my five takeaways from the past week in Texas.
1. “Drill, baby, drill” means the oil price will go “down, baby, down” This is, on one level, a straightforward function of supply and demand, but it is the fundamental conundrum at the heart of Trump’s energy strategy. Repeated calls for “more” energy of all kinds – not just hydrocarbons, but principally oil and gas – were well received at the event, as you’d expect. But there was the distinct impression that the energy executives gathered there had not worked out the financial mathematics of what a surge in energy output means for them.
2. Most US oil executives are MAGA agnostic There were routine smatterings of applause when the President’s election victory was mentioned, and certainly the energy industry is glad to see the back of some of President Biden’s regulations. Ending the ban on LNG exports got a huge cheer when it was referenced by energy secretary Chris Wright. But away from the plenary halls, the bosses of the big US energy companies were far more sceptical. These are people who understand the wider world outside MAGA-land, and may run the risk of accusations of the “globalism” which the Trump camp detests.
3. The Arabs are a big hit in Texas Well, at least Saudi Arabia, the UAE and Kuwait, who sent top-level energy delegations to Houston and said all the right things. Sultan Al Jaber, chairman of Adnoc, got ovations for his witticisms, but received the loudest cheer for the statement that he saw the USA as a strategic investment opportunity. Amin Nasser brought the house down with his Elvis Presley take on the energy transition. Despite this camaraderie between the USA and the Arabian Gulf, there are still some tough decisions to be taken, especially by Saudi Arabia, about its American investment pledges. $1 trillion – really?
4. Nobody cares much about climate change any more That’s maybe too broad a statement, and certainly the fossil fuel executives rush to burnish their environmental credentials. But the truth is that climate change and global warming were pushed to a back seat in Houston, as were the alternative fuels which are supposed to drive the energy transition. The “hydrogen hub” that has been a regular feature was renamed the “new energy hub”, renewables like wind and solar were not centre stage. Nuclear was the exception – speaker after speaker mentioned its growing potential as a non-hydrocarbon fuel source.
5. We are entering the ‘golden age of gas’ Many expert panels on natural gas and LNG extolled the virtues of this fuel, seen as a more acceptable hydrocarbon alternative to oil and coal, and as a “bridge” fuel to whatever energy transition awaits. One speaker from the US gas industry proclaimed that LNG is “bigger than Hollywood” in terms of its contribution to American exports. Gas is the USA’s new “soft power” in global energy.
6. AI is pre-occupying the minds of global oil executives as never before The transformational effects of artificial intelligence were proclaimed at virtually every session, and many specialist panels were devoted to it. For example, seismic surveys which may have taken years to conduct and process in the past can now be completed in days or even hours. It will be a complete game-changer at all levels of the energy industry, but especially in exploration and production.
7. There is always a party-pooper Larry Fink, founder and chairman of the biggest money machine in the world, the $10 trillion BlackRock, brought the triumphalist tone of CERAWeek down to earth with a litany of immediate concerns about the US economy – from financial volatility, slowing growth, the negative effects of labour deportations and America’s huge debt – which is three times bigger than BlackRock assets. “I’m frightened,” he said.
After that, we were all a little worried for a while.
Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia and is a media adviser to First Abu Dhabi Bank of the UAE
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