Reflections from CERA Week 2022
Last week I was delighted to participate in CERA week in Houston. This gathering of some of the world’s foremost energy leaders came amid a backdrop of unprecedented global events. The current geopolitical turmoil, most notably the horrors of the conflict in Ukraine, has not only profoundly impacted the energy markets, but also every delegate in attendance. With the reality of the situation in Eastern Europe top of mind, there was a palpable sense that it was a privilege to be participating in such an important dialogue at such an important time.
We are at a pivotal point in the energy industry. As leaders, we need to balance two key challenges – accelerating the energy transition to tackle the climate crisis while at the same time ensuring energy security for the billions of people who rely on conventional energy for their basic human needs. The latter has been brought into sharp focus in recent weeks.
The UN sustainable development goal 7 is to “ensure access to affordable, reliable, sustainable and modern energy for all”. This is an unambiguous objective – energy should be affordable and reliable (energy security) while at the same time being sustainable and modern (energy transition).
It might be tempting to paint these two challenges as a simple binary choice, but the truth is that the solution is far more nuanced. The answer is not to simply just turn off hydrocarbon production, but instead to undertake a transition. The energy industry needs to collaborate with governments and wider society to rapidly deploy practical solutions that reduce the carbon intensity of hydrocarbons while also accelerating the growth of low carbon energy sources. That balanced, practical approach characterised the CERA week dialogue with business leaders and policy makers united in the need to work together to build a more sustainable future.
For the US government, that is backed up by a $10bn commitment to ensuring broader adoption of Carbon Capture, Utilisation and Storage (CCUS), removing harmful emissions from the atmosphere. This is alongside an $8bn commitment to create four Hydrogen Hubs across the nation. Taken together, these investments will enable more sustainable domestic hydrocarbon production and increase the availability of clean energy sources.
These policy changes are important, but just as important is the commitment from the energy companies to reduce the impact of their operations. This will happen in thousands of smaller initiatives across the energy supply chain which will reduce emissions and offer new solutions. We are seeing clients take bold steps on detecting and eliminating fugitive emissions, integrating renewables sources to reduce the carbon intensity of their operations and making significant strides in asset optimisation to maximise reliability and affordability.
As an industry, we need to accelerate the provision of truly clean energy sources – as quickly as possible. In the meantime, as demonstrated all too clearly in the past few weeks, we must work together to ensure the security of critical energy supplies. The good news is that we have the technical solutions and capabilities to do both of these things at the same time.
While there is no simplistic, single answer to the challenges we face, the convergence of ambition demonstrated at CERA week towards a realistic, achievable and truly sustainable energy transition is a critical step forward.
I look forward to being part of the solution as I work with our teams globally to decarbonise and optimize energy now and for the generations to come.