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The energy industry gathers in Houston, Texas this week for S&P Global's annual conference, CERAWeek. His 8,000 attendees at the conference will not only be there to hear speeches from oil and gas giants, but also to hear about the latest next wave of emissions reduction technologies.
During panels and demonstrations, the message got across that fossil fuels aren't going away anytime soon.
At the same time, executives emphasized efforts to offset emissions.
This dual message is an attempt to make the world aware of our continued dependence on affordable oil and gas, and a PR pitch that the industry is doing its part to help fight climate change. Both.
Pierce Norton, CEO of pipeline operator ONEOK, said energy demand will only continue to grow, a sentiment echoed throughout the conference. He also emphasized that demand is growing even faster due to the computing power required for artificial intelligence, and painted a picture of “energy addition” rather than “energy transition.”
“This country actually started with the use of wood,” he said in an interview with CERAWeek. “Then we added coal, we added natural gas, we added nuclear, and now we have geothermal and we have renewable energy, which is solar and wind.”
Late last year, ExxonMobil CEO Darren Woods highlighted the need for global oil and gas at the United Nations climate conference COP28 in Dubai, leading to a backlash against the industry's energy transition. has gained even more momentum. (It's a sentiment he reiterated this week in an interview with Yahoo Finance.)
His remarks in Dubai happened to come ahead of the near-term low in oil prices in mid-December. Since then, WTI crude oil has risen more than 20%.
And energy stocks are starting to catch up. Last month, the S&P Energy Index rose about 8%, making it the best performer among the S&P 500 industry groups.
Neil Dingman, managing director of energy research at Trust, said in a phone interview last week that the sector had been a laggard, in part because investors were focused on AI. Now, the AI craze is starting to wane to some extent, oil prices (CL=F) are rising, and energy stocks are rebounding.
“Most of my investors, generalists, now realize that my group will never go back to the high-growth era,” Dingman said. “Investors are starting to come back as interest rates stabilize and other sectors don't go straight up.”
For commercial emissions offset projects, even if efforts are boosted as a result of anti-inflation laws, companies and shareholders may not immediately reap the benefits.
Exxon has agreements with fertilizer maker CF Industries, industrial gas maker Linde and steel maker Nucor to capture carbon dioxide, a byproduct of manufacturing processes, and bury it underground. This is part of the business the industry calls carbon capture, utilization and sequestration, or CCUS. These projects are scheduled to be operational in 2025 and he in 2026.
But the problem, many executives say, is that they are not yet financially viable, leaving a big question mark over their future.
For shareholders, all of this goes back to the initial message that oil and gas is not going anywhere, either in terms of global demand or as a major source of industry profits.
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