It’s day four of CERAWeek by S&P Global in Houston. Yesterday was heavy on discussions of electricity and natural gas. US Energy Secretary Jennifer Granholm’s keynote address struck a friendly tone as she sought to mend ties between the fossil-fuel industry and the Biden administration.
(Bloomberg) — It’s day four of CERAWeek by S&P Global in Houston. Yesterday was heavy on discussions of electricity and natural gas. US Energy Secretary Jennifer Granholm’s keynote address struck a friendly tone as she sought to mend ties between the fossil-fuel industry and the Biden administration.
Today is mostly about power and electrification. Highlights will include discussions on carbon markets, energy efficiency and the big challenges in connecting renewable energy sources to the grid. Shell Plc Chief Executive Officer Wael Sawan spoke early in the morning, and two regulators will do so later in the day: Willie L. Phillips, chairman of the US Federal Energy Regulatory Commission, and Michael Regan, administrator of the US Environmental Protection Agency.
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All time stamps are Houston.
US Urges Agreement on “Responsibly Sourced” Gas Label (10:00 am)
The Energy Department extolled the virtues of a transparent framework around the marketing and sale of so-called responsibly sourced gas in a Thursday morning meeting on the sidelines of CERAWeek with gas producers, exporters and third-party methane assessors.
The roundtable, which brought together more than two dozen industry officials and environmental advocates, centered around a two-page draft framework for differentiated gas as energy companies and the administration seek to increase confidence in the certification of some US gas as having fewer associated methane emissions. The meeting was billed as the start of a process that could unfold over several months. Participants and observers in the session included representatives from ConocoPhillips, EQT Corp., Project Canary, Sempra Infrastructure and the Oil and Gas Climate Initiative.
The Energy Department may not have authority to pursue new rules, but it can help shape common principles and criteria for what constitutes responsibly sourced gas. The regime could also be buttressed by accreditation and certification programs.
Carbon Capture Seen as Key to Reducing Grid Emissions (10 am)
Natural gas-fired power plants equipped with carbon capture, utilization and storage, or CCUS, is the only way to decarbonize the last 20% of the grid, Thad Hill, CEO of independent power producer Calpine, said in a media briefing at CeraWeek. The economics “almost” work with Inflation Reduction Act incentives, he said. “I am hopeful that next year we will commit” to an actual project, Hill said.
Calpine is conducting a full study at four plants in Texas and California, Hill said. Small nuclear reactors are not an option right now, he added.
EQT Boss Rice Says Permitting Reform Inevitable (9:00 am)
One of the hot topics at CERAWeek has been reforming the permitting process. While rather dry sounding, it’s actually crucial if the US energy industry is to grow and lower its overall emissions. Toby Rice, the CEO of natural gas producer EQT Corp., said he’s optimistic that it will become easier to build major new pipelines and other infrastructure as the government, the oil and gas sector and even the renewables industry become increasingly aligned on the issue.
“Permitting reform is inevitable in this country,” he said in an interview.
Rice added that EQT’s experience during the winter storm that briefly hit its Appalachian gas production just before Christmas illustrated why it’s vital that the company be allowed to expand in the region. “It’s not about winterization,” he said of the lessons to be drawn from that experience. “It’s about building redundancy. And that means more infrastructure to be able to do that.”
Shell CEO Has Tough Words for Enviros: CERAWeek Update (8:30 am)
Shell CEO Wael Sawan said Europe must stop “depending on luck as a strategy” and focus on developing all forms of energy, especially natural gas, as it responds to the supply crunch caused by the war in Ukraine.
Sawan said at CERAWeek by S&P Global that Shell’s new strategy will “play to our strengths” in providing all forms of energy, including oil and gas. The energy transition will be driven more by demand patterns rather than efforts to reduce or change supply, he said.
“Simply starving the world of that supply, that production of oil or for that matter for gas is going to result in the massive volatility and spikes in prices that we saw in 2021, exacerbating the issues we see right now with cost of living around the world,” Sawan said.
The company no longer has any ambition to become the largest power producer in the world, he said.
Energy Dept.: ‘Open to All’ Loan Applicants (8 am)
Jigar Shah, the Energy Department official who is looking to award billions of dollars in loan guarantees, has a message for executives at CERAWeek by S&P Global: We’re open to all. “I don’t care whether it’s a $30 billion application or a $2 billion application,” Shah, the director of the Loan Programs Office, said. “We treat everyone exactly the same, whether it’s in fossil or nuclear or renewables or advanced technology vehicles manufacturing.”
Shah hinted that may even include companies planning to redevelop fossil fuel infrastructure. Shah said he is hearing from refinery owners who would like to co-locate hydrogen and sustainable aviation fuel processing on site, and pipeline operators who see an opportunity to transport ammonia or carbon dioxide.
As long as an applicant meets statutory requirements, Shah said, “we would like for you to apply.” Even in wind and solar, people are coming to the office seeking possible support as they pursue new battery chemistries that aren’t yet bankable.
Ultimately, the goal is to nurture these projects so they can succeed on their own. “We really do want to kick the kids out of the house,” Shah said. “Once we pay for their education,” they can “go off and prosper.”
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