Mar 7, 2022 - Energy & Environment

Industry gathering faces upended energy world

Illustration of a lightbulb dripping in oil.

Illustration: Maura Losch/Axios

HOUSTON — A premier energy industry gathering is back in-person after a two-year COVID hiatus, but discussions that will dominate many sessions and closed-door meetings are different than anyone would have imagined before Russia invaded Ukraine.

Driving the news: CERAWeek by S&P Global draws Big Oil CEOs, Cabinet officials, foreign energy ministers, tech and power giants and everything in between.

  • The conference, now 40+ years old, blends speeches and wonky panels with private meetings and exclusive events.

Catch up fast: Oil prices on Monday soared to 14-year highs amid potential U.S. and European bans on Russian imports. European natural gas prices have also surged.

  • "We're going to need a degree of coordination between government and industry, in the United States and globally, that's just not there right now," said Pulitzer-winning energy historian and analyst Dan Yergin, CERAWeek's host.
  • On gas, he said: "European officials are coming to CERAWeek to talk to every single LNG exporter that they can possibly meet with."

The big picture: The official theme of this year's event is "Pace of change: energy, climate and innovation."

  • But the European crisis and its effect on prices and companies will now be front-and-center, even though climate will get plenty of time.
  • "A lot of the conference was focused on energy transition. Now it's certainly going to be about energy security and geopolitics," Yergin told Axios Sunday.
  • "There's really no precedent for what's happening," he said. "You can look at previous crises going back to the 1970s, but this involves not only oil but also involves, very centrally, natural gas, and it involves the world's two nuclear superpowers."
  • "This is the end of the post-Cold War era. And literally, Russia has been unplugged from the world economy. And when that happens, you find out that there are a lot more cords than people recognized," Yergin said, citing not only energy but global reliance on Russian wheat, metals and other goods.

What we're watching: Oil execs are on fairly friendly turf here, but they're nonetheless under pressure over production levels and more.

  • For instance, Shell is facing criticism for buying Russian crude at a steep discount, and later pledged the profits to Ukrainian relief.

The world is also in a different place on climate. The last two years have brought sobering reports on the pace of warming and its effects — and stark evidence of harms already unfolding.

  • The United Nation's COP26 summit in November married ambition and doubts about nations' and companies' follow-through.
  • "Net-zero [emissions] is fundamental to the discussion that's going to unfold over CERAWeek, and I think that is a difference from the last time we had CERAWeek. This is post-COP26," Yergin said.
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