Oil industry struts Texas stage with its old swagger at energy jamboree

After years of getting beaten up as climate villains, the global oil and gas industry celebrated a more friendly shift in “vibes” as thousands of executives, policymakers and ministers descended on Houston, Texas, this week for the annual CERAWeek energy jamboree.

A year after Russian troops mounted a full-scale invasion of Ukraine, throwing global energy markets into crisis, there was a sense on stage and in conversations over coffee and canapés that the world’s priorities had shifted back in their favour. Energy security was now the phrase on everyone’s lips and the oil sector had its swagger back.

“Really loving the vibes here this year. One of the things that we think has happened clearly is a move back to an all-of-the-above approach towards solving the energy crisis,” Toby Rice, chief executive of the US’s largest natural gas producer, EQT, told the Financial Times in a hotel suite temporarily converted into corporate HQ.

A record-breaking 7,200-plus attendees jammed into Houston’s Hilton Americas for CERAWeek, an annual industry event put on by S&P Global, and took over downtown’s bars and restaurants to dine, drink and do deals late into the night.

The Biden administration sent a huge delegation to the home of the oil and gas business as it sought a detente with an industry that it has clashed with over sky-high energy prices, record profits and huge share buybacks.

Energy secretary Jennifer Granholm told industry insiders lunching in the Hilton’s main hall that the world was able to navigate the post-invasion crisis “thanks in no small part to many in this room” who were “producing and exporting and working with US allies”.

Granholm sent senior department officials to a closed-door dinner where the biggest players in the US shale patch dined on steak with the Opec secretary-general; her assistant secretary held “candid and productive” talks with natural gas producers on how they might certify their products as green; and rather than casting the industry as carbon polluters, the energy secretary courted fossil fuel executives to join the climate fight.

“The oil and gas industry, man, you have the skill set and the knowledge to build some of these critical technologies at scale,” she said, sitting alongside S&P Global’s Pulitzer Prize-winning energy industry guru Daniel Yergin. “Your expertise, for example, in offshore drilling gives you a leg up on offshore wind. Your breakthroughs in fracking gives you a massive advantage in geothermal.”

It was a “positive” change in tone from the animosity that has marked the Biden years so far, said Rice. “You carry that trendline forward another year, and I think she’ll be working on the rigs with us.”

That was a sentiment echoed by Dan Brouillette, Granholm’s predecessor as energy secretary under the Trump administration, which rolled back climate policies.

“For years we saw energy policy viewed primarily through the lens or the prism of climate change,” said Brouillette, who is now president of liquefied natural gas developer Sempra Infrastructure. “Energy security was part of the equation but it wasn’t perhaps the dominant part of the equation. Today you are seeing it is dominant.”

Sultan al-Jaber, the president of COP28, the UN-sponsored climate summit, and a former oilman who has attended past CERAWeek events, offered the industry a seat at the table at the upcoming climate talks after loud industry complaints they had been excluded. “Energy leaders in this room have the knowledge, experience” to help lead efforts to lower emissions, he said.

Still, the bonhomie was punctured on occasion. An activist interrupted Patrick Pouyanne, chief executive of French oil supermajor Total, to protest his company’s plans to build an oil pipeline across east Africa and construct a new gas export facility on the US gas export facility.

Outside, a small crowd gathered to protest against the impact of new gas export facilities in US Gulf Coast communities — the same plants from which Brouillette and his contemporaries hope to send an armada of LNG tankers to Europe, replacing lost Russian supplies. To a backdrop of saxophone and drum, activists wielded placards calling on the industry to “lay down your weapons” and “stop gas exports”.

Oil markets slid during the week, too, defying bullishness from the stage on crude prices as the industry eyes China’s economic reopening and tight fossil fuel supplies. Federal Reserve chair Jay Powell signalled in Washington this week that interest rates would probably be higher for longer, potentially slowing the economy and undermining fuel demand.

The transition to cleaner fuels also permeated the discussions. Executives of all stripes cheered the arrival of the Inflation Reduction Act, President Joe Biden’s flagship climate law that promises to pump hundreds of billions of dollars into green technologies such as wind, solar and batteries as well as clean hydrogen and carbon capture and storage. Bernard Looney, BP’s chief executive, came to Houston — but his session focused on the company’s electric-vehicle charging ambitions with Hertz, the car hire firm.

The sleekly branded “Agora” area of the conference, which focuses on clean energy, once felt like a tack on to the oil and gas main event, but now draws big crowds and big names in its own right, including curious oil and gas executives checking out the latest green tech.

“This used to be a hydrocarbons event. Now it’s a hydrogen and carbon event,” said one attendee.