The annual CERAWeek conference, currently underway in Houston, is a who’s who of the mainstream energy industry. Attendees include Christophe de Margerie, CEO of the French oil giant Total, Robert Dudley, the new chief executive at BP, and Jose Maria Botelho de Vasconcelos, petroleum minister for African oil powerhouse Angola. The guest list also includes a few notables from outside the world of energy, including former presidents Bill Clinton and George W Bush and Microsoft CEO Steve Ballmer.
Billed by its organizers at Cambridge Energy Research Associates as a place where leaders from the energy, policy, technology, and financial communities rub shoulders, CERAWeek tries hard to be the type of place where ideas are cross-fertilized and conventional wisdom is crafted.
Unsurprisingly, with so many oilmen on the speakers list, the conventional wisdom continues to embrace hydrocarbons. On Tuesday Dudley issued an industry-wide apology for last summer’s Deepwater Horizon spill in the Gulf of Mexico. While many oil company executives claimed Dudley should have apologized on behalf of BP rather than the industry as a whole, insiders recognize that the apology was a political necessity for an industry hoping for more drilling in the Gulf. Although the White House lifted a post-spill moratorium on deepwater drilling in October, the Obama administration had not approved any new deepwater permits until the end of February.
Domestic drilling was also the focus of a presentation by John Hess, CEO of the integrated oil company Hess Corp. Hess called for the United States to boost its domestic supply of hydrocarbons, noting that “we must maintain the existing tax provisions that incentivize drilling.”
Such calls are in direct opposition to President Barack Obama’s plan for increased federal funding of renewable energy technologies. The president hopes to pay for government investments in green energy R&D by increasing taxes on oil companies. While Hess acknowledges that renewables have a role to play in U.S. energy policy, in his address at CERAWeek he cautioned, “We should be realistic about their contribution to our future energy needs.”
Even former proponents of climate change legislation used their CERAWeek addresses to talk up hydrocarbons. The CEO of Exelon, the largest operator of nuclear power plants in the U.S., sang the praises of natural gas. Exelon’s chief John Rowe claimed “inexpensive natural gas produces cheaper, cleaner electricity than any alternative I know of.”
Given the enthusiasm for oil and gas coming out of the conference, it appears that Obama may have an uphill fight on his hands if he wants renewables to have pride of place in his energy policy. Many conference speakers believe green energy is not politically or technologically feasible. The president will have to work hard to prove them wrong.