U.S. Energy Secretary Jennifer Granholm showcased American dominance in both clean energy and fossil fuel development to about 8,000 global industry experts, primarily oil industry executives and gas, at S&P Global’s CERAWeek mega conference, which began on March 18 in Houston.
“The world will need secure supplies of traditional and renewable energy for the immediate future,” he told attendees. “These truths are not in conflict. Even as the world’s leading producer of oil and gas and largest exporter of LNG, the expansion of America’s energy dominance toward clean energy is staggering.” Granholm said.
According to the head of the Department of Energy, investment in clean energy is now 65% higher globally than for fossil fuels, and has tripled in the US since 2016. Companies that now allocate billions of dollars in renewable energy investments “they are not making these decisions out of charity.” or because it’s nice to have them,” he said. “They do it because their results demand it.”
But Granholm also recognized that the political realities of the global energy transition and current affairs they have again put “energy security… on the table”, adding that “national security and energy security are inextricably linked”.
Several CEOs of oil and gas companies talked about investments in renewable energy, hydrogen and other low-to-zero emission technologies, but emphasized the continued development of oil and gas.
Arshad Mansoor, director general of the Electric Power Research Institute, noted the need for a broad approach power generation, citing growing demand for data centers, cryptocurrency and electric vehicles. “You have to be realistic about this ambitious goal for a net zero future, and realism is keeping the lights on,” he said. S&P Global in a conference interview.
Despite the International Energy Agency’s forecast that demand for oil and gas will peak in 2030, Amin Nasser, CEO of giant oil producer Saudi Aramco, told attendees it was a “fantasy” to consider the phase-out of fossil fuel development. He called for more efforts to reduce carbon emissions and lower carbon solutions, but cited the need to continue investing in oil and gas, “reflecting realistic demand assumptions.”
Geothermal energy heats up
Granholm also announced a new federal push for geothermal energy development, “harnessing the … heat beneath our feet and cracking the code to deploy it. [it] to scale”.
Stressing the “huge potential” of geothermal energy, he said “all federal oil and gas leases can be converted to it without new permits” and characterized the market as “at least a $250 billion investment opportunity of dollars, to reach the goal of 90 gigawatts of power capacity by 2050,” about 20 times more than exists now.
His comments follow DOE’s recent announcement of $74 million from the 2021 Infrastructure Act to fund up to seven pilot projects to demonstrate the scalability of enhanced geothermal systems in areas where power, hearing and cooling development “it was thought to be impossible,” Granholm said.
The DOE in February announced up to $40 million to support two pilot projects for enhanced geothermal systems, one led by Chevron New Energies in California and the other by Fervo Energy in Texas.
Chevron CEO Michael Wirth told CERAWeek attendees that the company and others are experimenting with fracking and horizontal drilling to tap geologies less favorable for geothermal. He said his pilot project in the United States, and one in Japan, could help determine whether geothermal is technically and economically viable and whether it could have unintended consequences.
DOE will host a webinar on April 12 to provide more information on its geothermal energy commercialization strategy, with first-round applications for pilot funding due June 16.
Legislation was also introduced in the U.S. Senate on March 14 that its bipartisan sponsors say would streamline the environmental review process for geothermal projects and advance development on federal lands.
Larger geothermal energy arrays have been installed in major residential projects in New York City and recently at tech giant Microsoft’s new 72-acre corporate campus in Washington state. To include more than 900 connected geowells drilled to a depth of 550 feet over 6.5 acres, the project creates one of the largest geoswap fields in the United States. It’s the first time a company has built its own, project managers say.
End date of LNG export pause
The issues surrounding the DOE’s decision in January to stop approving permits for LNG export projects in the US drew criticism from conference attendees. While studying the effects of LNG export expansion is “understandable,” Chevron’s Wirth said, “there’s probably a better way to navigate the problem.” He said the ban signals the unreliability of the US as a global gas supplier that could discourage long-term investment and have other geopolitical consequences.
In a letter of March 18 a agency heads and John Podesta, Biden’s top adviser on global climate policy, a coalition of Senate Republicans and oil and gas trade groups refuted White House claims that LNG harms the environment, raises the price of domestic natural gas and could leaving America’s allies without needed gas supplies. “Stopping US LNG export approvals gives Russia the upper hand,” the letter said.
Granholm said the pause “does not touch” current U.S. exports of 14 billion cubic feet (bcf) per day, 12 bcf under construction and another 22 bcf that are authorized and awaiting the final investment decision.
He also said the DOE would end the pause in March 2025, the most specific public reference yet to an end date, according to media reports.
Sen. Joe Manchin, the West Virginia Democrat who chairs the Senate Energy and Natural Resources Committee, expressed concern about allowing delays that hamper projects needed to strengthen energy security. Without sharing details, he said he hopes to finalize new permit reform legislation before the congressional recess in August.
“There is work that is underway,” said Manchin, who is not seeking re-election and ends his current term in January. “I don’t want to get anyone’s anticipation or hopes up, but we’re very close.”
In his appearance at CERAWeek, Podesta said the administration has done “everything we could do” to speed up the authorization, including using $1 billion in Inflation Reduction Act funding to strengthen federal review staff and $300 million to improve processes in states.
Granholm noted that a DOE pilot program is underway to use artificial intelligence to speed up permit timelines.
Despite criticism of the rules for accessing the law’s green hydrogen incentives, the tax credits “are being eaten voraciously like a big carrot,” he said, and have spurred the reorientation of American manufacturing.
Granholm also told attendees of a new DOE initiative to add federal benefits to communities that have been affected by emissions from traditional energy facilities, including funding for carbon reduction and clean energy projects , especially in Texas and Louisiana.
He cited research that lack of community involvement “is a major contributor to project failure; it’s a factor in nearly 30 percent of failed projects.”
“We have the power in this room to bring opportunities to communities and investors,” Granholm said.
