Sign up for a daily newsletter defining what matters in business and markets

Stories

Geopolitics, oil collide at energy confab

A first-ever address by a sitting secretary of state and the economic crisis in oil-rich Venezuela are set to drive the agenda at a conference next week in Houston of the world’s biggest energy companies.

The big picture: This is the first time the conference, held for almost 40 years, is occurring with America as the world’s biggest crude oil producer, a milestone reached last year.

Daniel Yergin, host of the conference dubbed CERAWeek, calls the U.S. boom, driven by surging production from shale formations, an “earthquake” in the world oil market.

Driving the news: The weeklong event is bringing together a record 4,500 attendees, Yergin told Axios in an interview on Thursday, which includes CEOs of the world’s biggest oil and natural gas producers and, increasingly, companies and leaders banking on renewable energy.

  • Yergin, a Pulitzer-Prize winning author, is the vice chairman of conference host IHS Markit and co-founder of Cambridge Energy Research Associates (which IHS bought in 2004).

Secretary of State Mike Pompeo will give a speech Tuesday addressing “how America’s energy revolution strengthens national security in an age of renewed great power competition.”

  • This is the first time a sitting secretary of state has spoken at the conference, says Yergin, who will be on stage with Pompeo and most other speakers.

The secretary general of OPEC, the Organization of Petroleum Exporting Countries mostly from the Middle East, is speaking Monday. OPEC has been a regular speaker at this conference the last few years, driven largely by the rise in American oil production. The official, Mohammad Sanusi Barkindo, attends the conference for 2 reasons, Yergin says.

  • “To understand this dynamic, new element that is like an earthquake in the world oil market called U.S. shale.”
  • “The second thing is his message that this is not the OPEC of the ‘70s or ‘80s. This is an international organization that is dedicated to try to promote stability and understanding.”

The economic crisis hitting Venezuela, which is a member of OPEC, will also be a top focus. The country’s ambassador to the U.S., Carlos Vecchio, and Luisa Palacios, chairwoman of the Citgo Petroleum Corporation, are slated to speak Tuesday. Citgo is a subsidiary of PDVSA, the Venezuelan state oil company.

  • The Trump administration has imposed crippling sanctions on PDVSA in an attempt to undercut current President Nicolás Maduro's regime and boost his rival for power, National Assembly President Juan Guaidó.
  • “Venezuela was not so many years ago a very important player in world oil,” Yergin said. “Under Maduro it has shriveled up as a producer and the human tragedy; Venezuela is going to rival Syria in terms of creating penniless, suffering refugees.”

A leader-in-waiting of Denmark is set to speak Wednesday on that nation’s impressive wind resources.

  • Her Royal Highness Crown Princess Mary Elizabeth of Denmark, is speaking for the first time at the conference.
  • Denmark has among the highest — if not the highest in the world — penetration of renewable energy, at 52.4% in 2018, according to International Energy Agency data.
  • A lot of this is offshore wind, which is being increasingly driven by big oil companies that are adapting their know-how in offshore drilling to wind.

Go deeper: Old oil seeks Silicon Valley swag