HOUSTON — The rhetorical whiplash between the climate-conscious Biden administration and President Donald Trump’s pledges to ramp up fossil fuel production will take center stage this week as the world’s energy leaders gather in Texas.
The annual CERAWeek conference will be a chance for some executives to celebrate what they consider a return to energy reality.
“For years now, I’ve been calling for a more balanced discussion about energy,” said Chevron CEO Mike Wirth during an earnings call in late January. “We’re finally beginning to see it.”
Wirth is among the scheduled speakers at CERAWeek by S&P Global, whose agenda starts Monday and features prominent Trump appointees such as Energy Secretary Chris Wright, Interior Secretary Doug Burgum and EPA Administrator Lee Zeldin. The CEOs of some of the world’s most influential companies are also slated to be here, from BP and Saudi Aramco to NextEra Energy and Edison International.
Top of mind for attendees are a slew of policy changes and pronouncements Trump has made since taking office less than two months ago, including gutting regulations around methane emissions, withdrawing from the Paris climate agreement, pausing construction of electric vehicle charging stations and looking into nixing standards for fossil fuel power plants.
Over the past several years, conversations about an energy transition at CERAWeek and in the energy industry have been trending away from climate commitments and renewable targets that became a rallying cry several years ago amid the COVID-19 pandemic.
The oil and gas industry has largely been welcoming the shift in how elected officials and energy analysts are talking about the global energy mix. But ongoing concerns about Trump’s shifting tariff plans for goods from countries such as Canada, Mexico and China will inject an air of uncertainty into CERAWeek as well as the prices of oil and gas. The president’s criticism of the cost and role of renewable energy also hasn’t gone unnoticed.
A shifting narrative was noted recently by Daniel Yergin, the longtime face of CERAWeek and vice chair at S&P Global. He co-bylined a piece in Foreign Affairs alongside Lazard CEO Peter Orszag and Atul Arya, chief energy strategist at S&P Global.
“Rather than replacing conventional energy sources, the growth of renewables is coming on top of that of conventional sources,” they wrote. “And with Donald Trump’s return to the U.S. presidency, priorities will focus again on conventional energy production and what his administration calls ‘energy dominance.’”
Mona Dajani, global co-chair of the energy sector with the Baker Botts law firm, pointed to London-based BP as a case study in how some companies went from embracing the energy transition to shuffling its priorities back toward fossil fuels.
In 2020, then-CEO Bernard Looney set targets aiming to cut oil and gas production 40 percent by 2030 and boosting BP’s renewable energy generation capacity twentyfold.
Other companies — including Shell, which is also now based in London — made plans to cut emissions and invest more in renewables. Shell set a target requiring emissions associated with its products decrease 45 percent from 2016 levels by 2035. Duke Energy, a major power producer, created a goal to become coal-free by 2035.
Dajani said it wasn’t just lockdowns that inspired companies to invest more in renewables — it was also the Biden administration.
“There were a lot of the energy majors, primarily European like Shell and BP, that really pushed towards more clean energy,” Dajani said. “And then it was very much supported by [the Biden] administration.”
Even as most governments announced lockdowns, and tens of millions of people stayed home and out of their cars and out of airplanes, oil demand was still relatively high, said Amanda Eversole, executive vice president and chief advocacy officer at the American Petroleum Institute, a major oil and gas trade association.
The U.S. Energy Information Administration estimated that the world consumed about 92.2 million barrels a day of petroleum and other liquid fuels in 2020 — a decline of about 9 million barrels a day, or 9 percent, compared with 2019 consumption numbers.
“I think that’s a really important grounding point because even with the huge sacrifices that were being made, we were still using a very significant amount of oil and gas,” Eversole said.
In 2023, global consumption of petroleum and other liquids reached an average of over 100 million barrels a day, according according to EIA.
War and prices
Much of the world’s views on energy changed further when Russia invaded Ukraine in February 2022 in a war that continues today.
Russian natural gas imports to the European Union fell from 150 billion cubic meters in 2021 to 78.8 billion cubic meters in 2022. That led to an energy crisis in the EU and caused natural gas and oil prices to rise around the world.
“Trade patterns for oil and natural gas shifted dramatically since the invasion,” Dajani said.
The price of a barrel of oil shot up from about $62 for a barrel of global benchmark Brent crude in March 2021 to $117.25 on average in March 2022, according to the EIA. The prices for natural gas climbed from $4.38 per million British thermal units in January 2022 to $8.14 per million Btus by May that same year.
On Friday, the U.S. benchmark price for oil was trading at less than $70 a barrel, while the U.S. natural gas benchmark was at more than $4 per million Btus.
Those price increases supercharged earnings for oil and gas companies. Exxon, Chevron, BP and Shell all broke their own previous earnings records for 2022 — causing shareholders to begin pressuring executives to focus more on fossil fuels.
“This bold pivot toward clean energy faced pushback from shareholders as oil prices recovered and profitability in renewables lagged,” Dajani said.
Last year, some of the biggest energy companies in the world were walking back or adjusting certain emissions and renewable energy investing pledges — especially as supply chain snags and interest rates made building renewable projects more expensive but did not improve their profitability.
Then last month BP announced it would undertake a “fundamental reset” and would cut planned low-carbon energy spending through 2030 from the $30 billion it had announced in 2023 to $4 billion now. It announced it would boost funding for its oil and gas production efforts by $10 billion — about 20 percent more than they had previously planned.
“The focus now is clearly profitability and energy security with prioritizing returns over volume reductions,” Dajani said. “It reflects a view that oil and gas will remain critical for decades.”
Other companies have made similar changes. Shell investors in May 2024 voted in favor of a company resolution that included less strict goals for carbon dioxide emissions than had been in place the prior year, with the resolution gaining 78 percent of shareholder votes.
North Carolina-based Duke Energy has extended the retirement of an Indiana coal plant to 2038, despite its coal-free goal. Ohio-based FirstEnergy, which serves parts of seven Midwestern and mid-Atlantic states, has nixed its target of reducing greenhouse gas emissions 30 percent from 2019 levels by 2030, although it maintains it will still reach carbon neutrality by 2050 for its electricity production.
Power providers have also shown renewed interest in investing in nuclear energy as a way to add around-the-clock power with no carbon emissions — including exploring small-reactor technologies. Although nuclear has faced cost and waste questions in recent decades, tech companies seeking substantial new power to support data centers have shown a willingness to invest in nuclear’s revival.
A 2024 Sierra Club report found that utilities were not phasing out fossil fuels fast enough to meet climate goals and that they were increasing the amount of new gas planned for the grid.
Those changes are in line with Trump’s goal to establish U.S. “energy dominance” by producing more oil and gas.
“I think that just at the macro level, elections have consequences,” said Eversole with the American Petroleum Institute. “And we’ve seen just over the course of the last several weeks, the impact of the change in administration.”
Energy demand could also soon rise, especially with artificial intelligence and data centers pulling increasing amounts of power from the grid. The International Energy Agency has estimated that global electricity demand from data centers could double between 2022 and 2026, thanks largely to power demands from AI.
Whether that increase in demand will be met by fossil fuels or renewable sources has yet to be seen. But officials from Microsoft, Amazon Web Services and Alphabet — the parent of Google — are slated to be at CERAWeek to discuss the implications.
Despite the changes in the White House and in energy companies’ appetite — or lack thereof — for renewables, the threat of climate change tied to fossil fuel emissions remains constant, said Mark Brownstein, senior vice president of energy with the Environmental Defense Fund.
“The one thing that hasn’t changed is the science, the physics and the atmospheric chemistry,” Brownstein said. “Climate change is continuing to bear down on countries and companies around the world. And so the challenge is how to achieve access, affordability and security of energy supply alongside the imperative to decarbonize the energy system?”
