HOUSTON—Much has changed in the global energy sector from when KPMG held its last Global Energy Conference a year ago. The mood last year was glum as phrases such as “lower-for-longer” dominated the conversation. This year’s meeting was noticeably more optimistic, with an air of confidence evident among the attendees at the Royal Sonesta Houston Galleria.

“Our industry is driving the future, but at the same time, we’re at the nexus of converging forces,” said Regina Mayor, the U.S. national sector leader of energy and natural resource for KPMG, upon opening the firm’s 16th Global Energy Conference. “There are geopolitical risks and uncertainties that continue to build, rapidly accelerating technology developments and we have cultural shifts with the demographic changes that we’re facing.”

Despite those rapid changes, Mayor cited a recent KPMG study of 1,300 CEOs around the world that showed 90% are confident in their company’s growth prospects. Meanwhile, 67% said they were confident in global economic growth.

Additionally, Mayor said the 18% year-over-year growth in the Dow Jones Industrial Average, as well as a 20% growth in the energy mix, are evidence of the growing confidence of executives in the markets.

She also noted the marked change in confidence specific to the energy sector. Oil prices have risen from the $50s to the $70s, with Brent hitting $80 in May. Rigs counts have risen 18% since last year’s event, she noted. Oil production has risen by 1.4 million barrels per day.

“With all of these incredible statistics and uber-positive confidence, we should feel wildly optimistic about what’s to come,” she said, “but there is more to the story.

“There’s an almost unprecedented level of policy schizophrenia on important topics like sanctions, trade, tariffs, military action,” she continued. “I’m not trying to indicate that this is necessarily negative. I’ve had many executives from other parts of the world say that the U.S. is being a brilliant negotiator. But whether it’s by design or by default, it creates uncertainty, and that uncertainty creates corporate and personal anxiety.”

John Gimigliano, principal in charge for federal legislative and regulatory services at KPMG in the U.S., continued the geopolitical discussion during the opening panel on energy’s role in the global economy.

Gimigliano said there is more geopolitical risk today for U.S. industry than in previous decades. One of the main reasons, he said, is that the balance of power has changed.

Compared to three decades ago, the U.S. has less capacity around the world to exert leadership. “Regardless of who is in the White House, it’s harder to lead the world today,” he said.

Much of that has to do with new powers on the world stage—enter Asia, and China, in particular. He pointed to China’s much bigger GDP than 20 years ago as evidence.

The change in the balance of power has also been fast. “The faster there is a change in the balance of power, the more ambiguity in the perceptions of the nations,” he said. “One of the consequences of the speed of change, and ambiguity and fear, is coalition behavior. So even without the U.S., Japan, the most nervous, organizes the TPP (Trans-Pacific Partnership).”

Within the energy sector, Asia continues to grow in influence, mainly due to its position as a current and future demand generator.

Constance Hunter, chief economist for KPMG in the U.S., showed with charts and data that most countries around the world are accelerating growth.

“This is a positive situation. It creates tailwinds to global demand … We know there is global energy market,” she said.

Since around 2014, the main driver of global oil demand has moved from OECD countries, which are mostly North American and European, to Asia, in particular China, and to some extent, India. “As China’s energy demands have grown and it’s gotten to a base consumption level, this significant growth rate is very important to global demand,” she said.

At this point, China consumes 2.9 trillion tonnes of oil equivalent while OECD countries consume 5.6 trillion, according to Hunter. She added, OECD consumption demand is projected to grow at a rate of about 2.5% over a 10-year period, while China is growing at a rate of about 45% during the same period.

“We can see that China’s influence, and Asia’s influence, is much more dominant,” she said. “This really is the correct indicator to look at going forward rather than looking at the developed world’s consumption.”

In terms of production, the U.S. continues to move up in total production. “With prices where they are I think that will continue for a little longer until we begin to stabilize,” Hunter said.

Meanwhile, the markets for energy tend to focus on transportation and manufacturing, she said.

“Transportation is an area where we’ve seen a tremendous amount of efficiency come into play and that efficiency is only going to continue over the next several decades,” she said. “It’s going to continue in terms of advancement in developing economies, and it’s going to continue in terms of distribution of more efficient vehicles throughout emerging markets.”

Hunter said manufacturing is an area that, “We are just beginning to see a transformation in energy usage.” She cited technology such as the Internet of Things and artificial intelligence (AI) as factors leading the transformation.

Google is on record as having used AI to reduce electricity usage in its cooling centers by 40%. “Imagine if all of manufacturing were to reduce its energy intensity by 40%,” Hunter asked, rhetorically.

“Most advancement in energy reduction in manufacturing is happening in emerging economies,” she said.

Len Vermillion can be reached at lvermillion@hartenergy.com.