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THE WOODLANDS, Texas — Energy industry executives need to shift from a “duck and cover” mentality to taking a seat at the table in discussions about the future of energy.
In the years since the first SPE Hydraulic Fracturing Technology Conference (HFTC), the conversation around climate has intensified while aggressive goals and policies related to future net zero emissions have been set. Along the way, production from U.S. shale plays has soared, leading to massive exports.
As new government policies jolt producers—and oil and gas market uncertainties persist—industry experts reached points of consensus to open the 15th HFTC on Feb. 6. Energy demand? Extremely unlikely to drop. The Biden administration’s plans to pause LNG export permits? Bad for the country.
And, work on the climate “crisis” needs to be reframed, they said.
“We hear a lot, this term ‘energy transition,’ and I’ve been critical of it mostly because it’s just not true,” Liberty Energy CEO Chris Wright said.
About 40% of the energy added to the global energy mix during the past 12 years has come from natural gas, he said.
It is, he said, “far and away the fastest growing energy source on the planet.” And the potential of natural gas is vast, he said.
“The resources of gas are just unbelievably, unbelievably large,” he said, citing gas reserves in western Colorado and Wyoming.
Wright noted efficiency is promoted as a way to decrease energy use because “you get more bang for your buck.” But efficiency paradoxically drives more use.
“It’s not actually a driver of reduced consumption because if you make something cheaper, guess what happens? People consume more of it. When we came out with high miles per gallon cars when I was in college, we drove 500 miles to go climb mountains for a weekend, and we drove 500 miles back home to go to school on Monday. No one did that before when you had low miles [and] expensive gasoline,” he said.
Trisha Curtis, president and CEO of PetroNerds, said the International Energy Agency’s net zero forecast, which required a 25 MMbbl/d drop in oil demand, “is not happening. It’s not just unlikely. It’s completely infeasible.”
Companies are saying the energy transition isn’t an “or” but an “and” proposition, she said.
“This industry is a duck and cover industry,” Curtis said. “From Exxon Valdez to now, oil stability, BP, you name it, we duck and cover, and we try to get through it.”
But to move forward, industry executives need to roll up their sleeves and get to work, she said.
“I think you have a presumption by the industry that if we just keep doing what we’re doing and we’re good at it, it’ll be fine,” she said. “And I think the industry has to realize that they have to get involved in the debate and they need to start pushing it.”
LNG pause sends wrong signal
One place to start: President Biden’s recent announcement that it was pausing LNG permitting of future projects. The policy is a step backward for the energy transition, and one likely to hurt the climate, Curtis said.
The industry spent years convincing Asian markets to trust that the U.S. could export enough natural gas to meet its needs.
“It sends a signal to the world,” she said. “When you are telling the world that you are no longer going to permit LNG export facilities, you are telling Asia, ‘please rely on coal because we are not going to be there for you.’ And that is exactly how Asia's interpreting it.”
She said the industry has “to build the pipelines, and we have to have the permits, and we have to be able to put these molecules on the water.”
She called the Biden administration “the most anti oil and gas administration” the U.S. has seen.
Industry leaders are bullish on natural gas, she said, including Baker Hughes CEO Lorenzo Simonelli, who has called natural gas both a transition fuel and a destination fuel. EQT CEO Toby Rice has called ‘transition fuel’ a fancy phrase for LNG.
“But there’s not a recognition of how bad the [LNG] policy is,” she said.
The U.S. has had to survive bad energy policies in the past, including in the 1970s, Curtis said.
“If people don’t start really pushing back and articulating how important these fuels are to just turn your lights on and to heat your homes, we are going to be in a really bad shape,” she said.
Reframe and context
Climate change doomsayers have managed to capture the public’s attention, largely through fear. The industry needs to shift toward pragmatic solutions—and realism about the world’s energy needs, panelists said.
Terra Rogers, superhot rock energy program director for the Clean Air Task Force, said she’s seen dogmatic stances move toward more constructive conversations.
Part of that means acknowledging that humans live in a “chronically distressed” and “wildly complex” environment.
“Tipping points happen without warning. We don’t know what will push what,” which leads to anxiety, she said. “I try very hard to put this in an opportunity space as opposed to a fear-based space.”
Doing so is more effective than “pants on fire dogmatic” approaches, she said.
Wright said context about energy needs seems to go missing when people scaremonger about climate change.
“It’s just so misrepresented, and it scares kids,” he said.
Instead, he urged framing such discussions in the context of what is known. “We don’t know the future—but this is … what we know about energy, and this is what we know about the trade-offs between them.”
And when it comes to energy, he said, access to energy radically affects quality of life.
Per capita, about 1 billion people globally consume about 13 bbl of oil per year, he said.
Another 7 billion people consume about 3 bbl of oil per year per capita. And for 1 billion of those 7 billion people, mostly living in Africa and India, consumption is closer to 1 bbl per year.
Providing more energy to the world, particularly in energy impoverished countries, could be life altering.
“Billions of people's lives will change, opportunities will change, health will improve, happiness will grow if they have more energy,” he said.
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