At CERAWeek, Mixed Responses to Trump 2.0

Guests

Javier Blas

Opinion Columnist, Bloomberg

Ben Geman

Energy & Climate Reporter, Axios

Transcript: Javier Blas: A senior executive of an American oil company told me, he said, “We thought that Chris Wright, the energy secretary, was our guy. Someone from the industry. And here in Houston, we just realized that Mr. Wright is Trump’s guy. He’s not our guy. He’s going to do what the White House is telling him to do, and that means $50 oil, and bankruptcies in the oil patch, so be it.”
Jason Bordoff: Last week, energy industry leaders gathered in Houston for CERAWeek, one of the most important annual events in the industry. The conference offers a unique window into the current state of energy markets, policy and technology. This year’s conference took place against a backdrop of shifting global energy dynamics, declining oil prices, the Trump administration’s “drill baby drill” agenda, growing concerns about energy security, geopolitical tensions, and ongoing debates about the pace and the direction of the energy transition. So what were the key takeaways from this gathering of energy leaders and what do they tell us about where global energy markets are headed?
This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff.
Today on the show I’m joined by two leading energy journalists who were also at CERAWeek Javier Blas and Ben Geman. Javier is an opinion columnist for Bloomberg, covering energy and commodities. He was previously at the Financial Times where he held various positions including roles as the Africa editor and the commodities editor. Ben is an energy and climate reporter at Axios. He’s the co-author of the Daily Axios Generate newsletter and covers the world of energy, business and policy. He previously covered those topics for National Journal, The Hill, and E&E News.
We discussed what they observed at the conference from what energy executives think about low oil prices and Trump’s agenda to the shifting narratives around climate change to the surprising resurgence of discussions about Alaskan LNG. We also talked about what all this means for us, energy policy, global markets, and the future of both fossil fuels and clean energy technologies. I hope you enjoy the conversation.
Ben Geman and Javier Blas, thank you for joining me on Columbia Energy Exchange. Great to see you both again just a few days after seeing you in person in Houston, Texas at CERAWeek.
Ben Geman: Thanks for having me.
Javier Blas: Thank you.
Jason Bordoff: So, many of our listeners probably will have heard of CERAWeek. Some may be more or less familiar, but we’re kind of having a whole conversation to debrief on what happened there. And Ben, maybe I could just start with you to explain to those listening why we’re doing that. It’s something around 10,000 people — I forget how many. Why do so many people go to Houston? Help people understand why CERAWeek is sort of a checkpoint for where we are in the energy and climate conversation every year.
Ben Geman: Yeah, I mean you could say that CERAWeek is something of the kind of Super Bowl of energy conferences or even, I dunno, the World Cup of energy conferences, although it takes place every year and because you have such a massive turnout from across the industry and across governments. So that’s everybody from the CEOs of oil majors to the largest utilities in the world to a zillion different startups increasingly there, to foreign ministers. It’s such a large event that it’s really sort of the place to be to take the pulse of various different parts of the energy industry. And it’s interesting, it’s really sort of concentric circles of events. So there’s certainly very public-facing — well public to the extent that if you’ve paid $10,000 you can go. You’ve got the main stage events where you have Dan Jurgen and others interviewing people on stage. But then there’s also a lot of sort of exclusive and closed door meetings such as between Energy Secretary, Chris Wright and the heads of some very large energy companies. Then you also have a lot of behind the scenes deal making. So there’s really a lot happening at once. And like I said before, if you sort of want to get both the zeitgeist but also some very specific information about what different parts of the industry are doing, it’s really sort of the place to be each year.
Jason Bordoff: There’s even some media outlets hosting events and conversations where you got to talk to me. So I’m pleased to turn the tables and grill you this time.
Ben Geman: Absolutely.
Jason Bordoff: Javier, you make a longer trip. Why do you come all the way to Houston every year for this?
Javier Blas: Well, a lot of the same reasons that Ben explained, I mean it’s a great place to meet everyone for me is part of what I call my annual Texas pilgrimage where I typically go to the Permian Shale basin — now popularized by the American drama Landman. It is very real. It is really like Landman with a bit of less glamour, but about real. I wish that they had an oil reporter on the series.
Jason Bordoff: Are you running into a lot of drug cartels when you’re driving through the Permian? Because some of the Landman I haven’t experienced…
Javier Blas: I haven’t experienced that. I have put a lot of miles in the Permian and thankfully nothing of the sort has happened to me and driving has vastly improved. Safety is a lot better today. But I do remember driving in Midland around probably was pre-Covid, I will say 2015, 2016. And at times it felt quite dangerous, particularly the amount of traffic, the traffic jams were massive. But look back to CERAWeek. Everyone is there, ministers, cabinet secretaries, oil executives, bankers, traders. It is the place that if you are not just in oil and gas but just across the energy industry, you go there. That’s where a lot of the money is going to be coming, that some of the ideas get discussed. Yes, there is a risk that it is a bit of an echo chamber. So every year a lot of people kind of agree on the obvious and there is not a lot of real debate and that’s always the danger in an event like this, but it’s still very, very useful.
Jason Bordoff: And for those who are listening who may not know the reference landman, we were talking about the Billy Bob Thornton television show, which is fun to watch, so I recommend it to people. Javier, what was the sort of zeitgeist, the mood, the big themes and notable takeaways for you this year?
Javier Blas: Well, you have told me a number of years ago that we were going to have a Republican president in the White House that was advocating for more drilling and not just advocating. The whole slogan is drill baby drill. And on top of that you have told me that we were going to have an energy secretary, that it was an insider from the industry, a former CEO of a fracking company. I will have assumed that the mood in Houston at CERAWeek will be celebration. Ebullient is I think that is the word I used on the column. Ebullient. Just like everyone, it’s just party time. Well,
Jason Bordoff: I heard applause and shouts and even whistles when Chris Wright and Doug Burgum took the stage.
Javier Blas: But that was a lot of public positioning, et cetera, et cetera. The comments in private that I heard were not of celebration. It is an industry that now is fearing lower economic growth and certainly that they are now very aware that the White House wants oil prices to go down perhaps as low as $50 a barrel and that is not very profitable for the American oil industry. I think that to me, one very interesting bit was when a senior executive of an American oil company told me, he said, “we thought that Chris Wright, the energy secretary was our guy, someone from the industry. And hearing Houston, we just realized that Mr. Wright is Trump’s guy. He’s not our guy. He’s going to do what the White House is telling him to do and that means $50 oil and bankruptcies in the oil patch, so be it.” And that’s why I think that the mood at CERAWeek was not as celebratory as otherwise would have in mind.
Jason Bordoff: I think you said in your latest column some of the executives you spoke to privately seemed a bit concerned that maybe when Trump says $50 oil, it turns out he actually means it.
Javier Blas: Yes, and I think that that was also, I was a bit surprised because this has been a constant of the president. In many, multiple interviews, on the campaign trail, he always referred to his desire of low oil prices, low gasoline prices, and the number of $50 have come multiple times from him. So I was a bit surprised that some executives have only realized that, at CERAWeek, that actually the president really wants low oil prices and low gasoline prices. It really looked obvious to me, but I think that a number of people in Houston, they were like, huh, so actually he really wants to do that. And why that’s important is because $50 oil for a lot of shale companies, it may not mean bankruptcy but certainly means a very difficult time.
Jason Bordoff: Is that consistent, Ben, with conversations you were having with executives there?
Ben Geman: Yes, very much so. I think for a lot of people at CERAWeek it was sort of a Dr. Jekyll and Mr. Hyde situation in the sense of look at a 30,000 foot level you’ve got industry executives who are generally pleased with the kind of Trump 2.0 agenda in certain respects, some of the deregulatory moves, some of the expansion of leasing access…the hope anyway that permitting will move faster. But then the other huge piece of it, just as Javier notes and something that was really unmistakable at the conference was the concern about the macro headwinds that are only going to be sort of worsened by — or the concern is that they will be worsened by — President Trump’s trade and tariff policies. And so while on the one hand you heard often the sort of drill, baby drill mantra from Interior Secretary Burgum and some others, I didn’t hear anybody sort of suggesting that this was in the cards anytime soon beyond the sort of existing very modest output growth we’re going to be seeing in the US.
Now, look, obviously we’re already at record levels, but that said, I think there was also perhaps a little bit of frustration that… not only frustration with the president’s tariffs and trade policy, but a sense that it’s going to be difficult to sway him through his intermediaries. Right? I was talking to a representative of a very large multinational energy company who said something of the effect that on some level Trump is his own staffer when it comes to tariffs. So this person was not, wasn’t entirely sure that sending this message through his energy secretary and others was going to have the desired effect on getting the president to sort of, I suppose stand down or at least back off a little bit on some of these tariff and trade policies that you’ve got companies concerned on a number of levels with these, right? One is just that, it’s that it hits the fundamentals that it’s going to sort of create more demand headwinds, it’s going to push prices down, but also that it can spur retaliation, drive up the cost of goods. So generally, like I said, you’ve got a mix of applause for several pieces of policy that we’re seeing unfolding — and in fact several from EPA were announced during the conference — with this kind of much more gloomy take that Javier just walked us through.
Jason Bordoff: And to your point, Javier, about the impact of low prices on the US shale patch on US production, and we also heard the Secretary Wright say, yes, lower oil prices change the economics, but we’re going to do so much deregulation that $50 will be just fine. I take it that is not what you heard from executives.
Javier Blas: I didn’t hear that at all from executives. I think that $50 oil, despite all the deregulation that the administration may do, will be, still, a very difficult price for the industry. There’s a lot of debate of where is the kind of the balancing point where the US oil production goes into reverse, whether that’s around $60, it’s a bit higher, it’s a bit lower, but I think that $50…clearly US production will start to contract. A lot of companies will have to stop paying the dividend. It will be a very difficult period for the shale patch.
Jason Bordoff: Javier, can you just for people listening who may not follow these things as closely because one of the leading reporters and columnists on commodities, what has happened to oil prices and why has that happened? Ben talked about some of the macro factors: concern about the economy to the impact of tariffs on the demand side and then also there’s a lot going on the supply side. So what has happened to oil prices and why?
Javier Blas: So we go back to 2021, late 2021, early 2022. I think that that’s the starting point of the last kind of cycle. The invasion of Ukraine by Russia pushed prices up also turbo charts, refining margins, increased, also prices for natural gas. Everyone in the industry has been doing very well. Prices went above a hundred dollars. Since then the prices came down a bit. OPEC started to cut production to defend prices and keep prices over the last couple of years, on average around $80 a barrel, a bit higher, a bit lower, but that was thereabouts $80, $85. The assumption was that the Saudis wanted to push prices back to a hundred a barrel. OPEC at one point about a year ago sketched a plan to start increasing production again because the market was too weak. The cartel delay three times those production increases. But this time just before CERAWeek, the expectation was that it was going to be another delay in and the OPEC production increases, but the cartel surprised the market, they announced that the production increases are going to come ahead.
That has sent prices even lower. And although this week prices have recovered somewhat, we are trading for the brand benchmark around $70, a few dollars higher or lower depending on the day, for West Texas intermediate, the US benchmark, that’s between 65 and $70 a barrel. And here now the question is if OPEC continues to increase production every month, as they have said that they’re going to do the macro, the global economic growth is slower because Mr. Trump’s tariff damage, international trade, and therefore economic growth, then prices potentially could go even lower. A lot of it will depend on geopolitics, what happens with Russia and Ukraine, what happens with Iran, what happens with Venezuela. But the trend, I think that if I have to summarize what the view was in Houston was at best we stay where we are around $70 a barrel. At worst we go to $50. But interestingly, I think it is the first time since the end of the pandemic that I have gone to Houston and no one has tried to convince me that a hundred dollars oil was around the corner.
Jason Bordoff: And just quick follow up, given that kind of bearish outlook, just help people understand why OPEC brought all the supply back to the market.
Javier Blas: I think there are two reasons. One is OPEC has realized that at some point they need to start increasing production rather than continue to give market share to US shale producers and not only the US shale producers, but we have producers in Canada, in Brazil, in Guyana, in a number of other countries. But the American hemisphere is producing a lot more oil than it used to. That’s one. And I think that OPEC has realized that his attempt to keep prices in that kind of 80 to a hundred dollars a barrel of oil, the only thing that he was doing was subsidizing American oil production, giving away more market share. And that was a losing the strategy if that continued for a number of years. So at some point you need to let prices go at a lower level to regain market share. I think that’s what OPEC is trying to do.
The other problem is an internal problem of OPEC and is that a number of countries that are part of the production deal, were cheating on their quotas. These are quotas that they’re self-police by OPEC and a number of countries, and notably the United Arab Emirates, Iraq and Kazakhstan are pumping way above what they should be doing. It’s about a million barrels a day all together. And that means that I think that some of the other countries in OPEC and by that Saudi Arabia got a bit tired of that attitude and say, look, if everyone is going to be cheating, well let’s increase production and see where the market goes and in a few months we will know what we need to do. It is kind of perhaps Saudi Arabia is allowing the cheaters to receive a bit of a “look, you continue on this path, this is what is going to happen. Low prices. Do you really want to go that way?”
Jason Bordoff: And Ben, I think I want to move on to other topics, but just several of the US CEOs are, I think, are meeting with the president this week. I assumed to talk about some of these issues among other things. Is that right?
Ben Geman: That’s right, yes. I’m not sure exactly which ones, but there’s going to be some type of huddle with the White House. I mean, I think one thing that’s sort of fascinating here, as long as we’re sort of checking the mood rings on different companies and executives of different companies, I think to some extent, not only does it differ by where their acreage is and so forth, but I think it also depends very much on whether we’re talking about the near term or the long term. So certainly as we’ve been discussing the kind of nearer term macro signals are starting to look very dismaying on some level for some of these companies. Looking at the longer term, I think that’s where you see much more harmony with White House policy. So the prospect of expanded leasing and more frequent leasing in the Gulf of Mexico, the prospect of easier permitting for pipelines and other infrastructure. So I think it’s kind of a mix like we were saying before of concern about the near term, but some more support for some of the longer term policy changes that we’re seeing from both the energy and interior departments and EPA.
Jason Bordoff: We also heard a lot of phrases like energy realism, energy pragmatism, climate realism, climate pragmatism. And Ben, I was wondering if you could talk a little bit about how those conversations were playing out, what you heard and what to the people who were attending, what do phrases like that mean?
Ben Geman: Yeah, that’s absolutely right. I think one thing that we called it in some of our coverage was sort of the big reset. And this was true even before CERAWeek, but it was certainly apparent there, which is it’s this idea that the energy transition or the low carbon transition, the brakes are being tapped or maybe even a little bit more than tapped. And that a combination of just sort of the unforgiving math of rising energy demand, especially in emerging economies, but also in more developed countries too, given the sort of growth of data centers and other drivers of electricity demand that essentially the kind of zeal and dominance of the sort of net zero agenda is really taking a back seat to discussion of more the need for more output growth, the need for more gas in particular. And so the term you often heard, as you were just saying, I couldn’t tell you how many times I heard the term “realism” or “pragmatism” on stage and in other conversations at CERAWeek.
I think there’s a sense that certainly the ascent of the Trump administration is going to fuel this. But honestly, we were seeing signs of this even beforehand. I mean, yes, BP announced their big reset and pivot back toward oil and gas and lowering their planned investment in low carbon sources. Yes, they announced that after Trump was already in office, but that was obviously in the works for quite some time. And so I think that even if you leave Trump out of the equation, we’re seeing something of a reconsideration of climate ambition both in C-suites and among governments.
Jason Bordoff: Javier, in your conversations, what was your sense of what that means? Does it mean we need more pragmatic approaches to get to goals of deep decarbonization, or does it mean this whole climate thing is just too hard and let’s forget about it?
Javier Blas: Most people in Houston, by pragmatism mean pumping more oil and more gas. That’s the code. I mean, pragmatism has become as going slower on the fight against climate change and rightly or wrongly, a warning that what Europe has been trying, the industrialization of Europe, particularly some of the energy intensive manufacturing that will not happen here in the United States. That’s what people mean by pragmatism. And I have a bit of sympathy with the argument, but I think that they ignore some other things that they’re at play. I mean, yes, Europe was suffering from high energy prices before Russia invaded Ukraine, and that was damaging the industrial base. But really the last three years have been all on the back of Russia invading Ukraine, and they stopped supplying natural gas to Europe. I mean Europe did not put sanctions on European, sorry, on Russia and gas. It was Russia who decided to sell sanctions that gas and not supplying it to Europe, and the result was sky high prices for both natural gas and electricity. So we have to be careful about framing the recent years of high prices as it was just the result of climate change policies in Europe.
Jason Bordoff: And we heard, I guess even the head of the IEA Fatih Birol, say of course we need to invest hundreds of billions of dollars a year in oil and gas production. Which by the way, for people listening, there was a sense that the IEA’s net 2050 roadmap said, investment should stop. I mean, the accurate reading of that study was even in that scenario, which is almost impossible to imagine achieving at this point. Hundreds of billions of dollars were still needed in oil and gas investment. That wasn’t always well understood, but less than status quo of course, and perhaps not in new fields. But so he went out of his way to clarify that. I think given the new landscape and maybe the new administration here, this also felt a little bit like it was almost like an LNG… We talked a lot about oil, but this felt like a natural gas, an LNG conference as much or even more so with the US being a huge exporter already exports are about to double. And that would’ve been true even if Kamala Harris had won the election, we were headed in that direction and now there’s interest in the administration and going even further, we have a lot of investment in gas power generation here because of AI data centers increasing power demand. So Ben, maybe you could start and just talk a little bit about the role of gas at this conference.
Ben Geman: Yeah, very much so. Energy secretary Chris Wright. I mean, I think this really punctuates it when he was doing a press conference with, after his speech to the full conference, he made very much of a point of holding up and then signing the latest energy department authorization for exports to major markets. And that is one of the bigger changes that we’re seeing between the Trump administration and the Biden administration, or at least the late term, I suppose, Biden administration, which is that they have very openly sort of reversed this pause on new approvals. Now, as you pointed out a moment ago, of course, based on what has already been approved and is under construction US exports were going to sort of rise regardless. But that said, I think we saw a lot of excitement at the conference at the idea that we’ve now got a very, very supportive administration. And both domestically and abroad there was just a lot of discussion about rising natural gas demand.
I mean, you had Dan Yergin asking the Shell CEO to sort of reiterate their increased estimate of how much LNG will be needed going ahead in the decades ahead. So that was a quite prominent moment on stage as well. I think the other tension here is the role of US LNG in supporting European energy needs and European energy security at a time when we’re starting to hear some whispers, or perhaps even more than whispers, perhaps it’s the subtext is becoming text on the idea that if there is a peace agreement to end this ongoing tragedy in Ukraine, that we would see some level of resumption of pipeline Russian gas heading into Europe. I mean, the sense that I got is that… it’s interesting the CEO of Freeport LNG was asked about this on stage and he said the minority view is that there will be some return, but certainly nowhere near the levels at which it previously was. And then he said, the majority view is that there will be almost no increase beyond the sort of much smaller level that we are seeing now. But that story strikes me as actually very much unwritten right now and very uncertain.
Jason Bordoff: Javier, what did you see particularly on gas from, again, your seat in Europe in particular?
Javier Blas: Well, I think that there is a growing concern by American LNG executives that Europe will go back to buy Russian gas. Nothing similar to pre-war where Europe was buying in the order of around 130, 140 billion cubic meters, but certainly more than. And I’m talking about pipeline gas, but is it possible that Europe goes to something like 30 or 40 BCMs a year? Yeah, I think that that’s very, very possible. And I hear some executives, both from European and American companies are discussing that as entirely possible. I know that this may sound, to non-energy specialists, completely preposterous, but we are talking about Europe going back to buying Russia and gas despite the fact that Russia invaded Ukraine, that the war is still ongoing, et cetera, et cetera. But I will remind listeners, particularly in the United States of a historical example that I like to quote, and it’s the fact that the United States went to war against Sadam Hussein in 1990, 1991 to liberate Kuwait. And a few years later from 1996, the United States was importing Iraqi oil with Sadam Hussein in power.
And by 2002, just one year before the second Gulf War, the invasion of Iraq, Iraq has become under Sadam Hussein, one of the largest suppliers, foreign suppliers of all to the United States. I just think that countries go to whatever their natural resources are, and in this case, the geographical proximity of Russia to Europe makes that very attractive for a number of European countries, which until they are buying it will publicly deny that they’re even thinking about it. But be sure that privately, those conversations are ongoing. And I heard about that in CERAWeek. We, one interesting point related to gas and electricity is that I thought it was quite interesting at CERAWeek, we have heard a lot about the growing needs of electricity because artificial intelligence and data center, and to me the opposite was very interesting at Houston that some of the utilities kind of play down or at least throw some cold water on some of the most exuberant forecast for electricity demand in the United States. It just perhaps is a realization that not everything is going to be explosive growth, and as every time the industry will get more efficient, and in this case the artificial intelligence computing needs and power needs for those computers will get more efficient.
Jason Bordoff: Yeah, obviously a lot of uncertainty about that. Go ahead, Ben.
Ben Geman: Yes, I just want to, well, it was essentially what you were just saying. I mean, one of the things that I find fascinating about this whole discussion around data centers energy needs is that while everybody agrees that the arrow was pointed upward beyond that, it starts to completely atomize in terms of exactly how much additional power demand there will be. I mean, I think we all like to quote in our stories, or at least I do, some of these more eye-popping estimates, but I think one thing that I also try to note is that whether you have it’s a bank research note or an energy department estimate or whoever’s doing the estimate, the uncertainty ban tends to be gigantic. And so I think there is a big question as to whether or not some of these more remarkable projections of increased data center power demand will indeed come to pass or not.
Jason Bordoff: Yeah, I’m old enough to remember columns and op-eds and such from the late 1990s that the internet would consume half of us electricity and cryptocurrency, I don’t know, five or 10 years ago, sort of the same. And yeah, there’s a lot of innovation that happens with efficiency, but also use cases for AI we obviously haven’t even contemplated yet because we’re still at the very earliest stages of this revolution. I want to come back to the point about geopolitics and how that played into this conference. Javier, you made a point, I think you and I have both been on record since very early after Russia invaded Ukraine saying our memories are short when it comes to energy crises and the economic competitiveness pressures on Europe are so great right now that even if people claim never, never, it’s just too appealing to bring cheaper gas from Russia in.
And the alternative is more expensive, LNG, maybe more expensive LNG, not always even, from your friends and allies like the US. And I want to ask you about that friends and allies part because I was curious how you heard or how you think your European leaders there are heard, for example, secretary Chris Wright’s speech, which was pretty clear saying America’s putting America first, and then you have tariff policy and approaches toward allies like in Canada that are different from what we’ve seen before. How does that play into the mindset in Europe about the role of the US exports and how they think about energy security and what did you hear on the ground in Houston?
Javier Blas: Well, I think that there is a reconsideration of everything that comes from the United States. I mean, it is very clear and an executives knew that Trump 2.0 was going to be, let’s say less restrained in terms of policies. But I think that European executives have even been surprised by the extent of how less restrained it is and how the focus is on America first. I mean, tariffs are a source of concern for European executives. They are a huge source of concern for Canadian oil executives, which were in great force in Houston and trying to demonstrate almost [unclear] to everyone. But I thought that they were trying to convince someone that is already convinced. I think that everyone in Houston largely agreed that Canadian oil and Canadian energy is very important for the United States. I mean, a lot of executives, when I asked them about Canada, they said, well, we never have really modeled a situation where we introduced tariffs on Canadian oil and gas because we never thought that that was possible.
I mean, we always kind of did all our financial planning or our political planning as North America being the US and Canada being one. I think that that kind of treats the Canadian partners as the little brother in that relationship. But still, that’s the view. And everyone now had to reconsider, and I was talking to a European diplomat that was in Houston kind of following the conversations and said, if President Trump imposes tariffs and is willing to use trade as a political weapon, how confident can be Europe that putting all the eggs on the American LNG basket is a wise idea. What if President Trump was one day to try to use those LNG supplies for political leverage? I think that in some ways that is already happening or about to happen, and it’s something that Europe is beginning to realize that they have an overreliance now on American LNG that can bring its own problems. I’m not really trying to put American LNG at the same level as the Russian gas pipeline – far away from that parallel. But I do think that for some countries that they’re buying 25, 30% of their gas coming from the United States, that anything above that level starts to create some potential problems of relying too much on one single source of origin.
Jason Bordoff: Ben, we’ve talked most of the podcast actually – we have some time remaining – about oil and gas, and these are all companies that have made significant commitments to an energy transition and in some cases to net zero the fastest growing parts of zero week on the agenda. And this whole section called the Agora was about innovation and emerging technologies, particularly lower zero carbon technologies. Just Ben, what was your sense about what was happening in clean energy technologies at zero week? Was that an afterthought or still a lot of attention being paid, notwithstanding uncertainty about the Inflation Reduction Act and Trump policies?
Ben Geman: Oh, I don’t think it was an afterthought. The conference organizers told me that this year there were two approximately 250 cleantech startups represented at the conference, which is an even higher number than last year by a lot. And already the sort of clean tech Agora side of the conference has been growing a lot. So that certainly was not absent. I think you did sense, and I certainly did in my conversations, a fair amount of concern. But to drill down for a second, I think it is going to start to vary technology by technology because one thing that we did see at the conference for example, was energy secretary Chris Wright on some level reflecting his boss saying some very negative things about onshore wind. On the other hand, he was saying very positive things about geothermal. And one of the interviews I did at the conference, in fact, was with Tim Latimer, the CEO of Fervo Energy, one of the most prominent geothermal startups. And what he told me was that…
Jason Bordoff: Where Chris Wright was on a board member
Ben Geman: That’s right, and Liberty Energy, Chris Wright’s oil field services company has in fact invested in Fervo. And Tim had told me already as of a couple years ago that at some point in the future they would think about an IPO, but his comments to me at the conference were much stronger on this idea. He didn’t definitively commit to it, but he did say that they’re deep into discussions with Wall Street banks and it seems like something that is definitely on the horizon for them. But I think one real thing that’s really interesting at the conference is how a lot of clean energy executives are sort of looking to what happens on Capitol Hill as lawmakers debate budget measures, right? Because you’ve got this gigantic constellation and matrix of clean energy tax credits in the Inflation Reduction Act, and certainly it looks like we’re going to see efforts to pare some of those back.
And I think you’ve got everybody sort of saying, okay, well let’s try and make the case in particular for the credits that are most important to our sector. And that’s not only on the renewable and cleantech company side, that’s in the oil industry as well. So I was having a conversation with Mike Sommers, the head of the American Petroleum Institute, and he was saying that they’re keen to make sure that credits for hydrogen and carbon capture and sustainable aviation fuels are maintained. I was chatting with the head of RWE’s onshore renewables branch, and he was talking to me about their efforts to make the case that credits for US renewable power should be maintained. And he actually put an interesting wrinkle on that and he said, “look, we are in favor of more natural gas in the US. We are going to need more natural gas production.” Essentially, he was saying, if you chop onshore renewables out of that equation, that is going to raise natural gas prices for everybody. So I think that was a sense of how the cleantech sector is sort of adopting their message in a sort of, I suppose, more pro-Trump or, and in fact pro natural gas scaffolding.
Jason Bordoff: Javier?
Javier Blas: To Ben’s point, and I thought that that was very interesting, both in public conversations and private conversations is how much emphasis a lot of senior executives from the fossil fuel industry put on the need to maintain the IRA and the tax credits that come particularly for CO2 capture, you will in remember that may have been some pushback from the fossil fuel industry to a key piece of legislation from the Biden administration, but the opposite was the case. And that’s another concern that I think that it was behind the curtains that it was very important if the first concern was the White House push for lower oil prices. The second concern was the concerns about the global economic growth because of trade wars. The third concern was the potential for losing key parts of the IRA and how much the fossil fuel wants that to remain as it is.
Jason Bordoff: And Ben, you’re a close follower of US politics. What’s your read on what the likelihood of that is and how this reconciliation process plays out? Republicans need to find money to pay for other things like tax cuts. It’s got to come from somewhere I think.
Ben Geman: Yeah, I mean certainly this is something that we’re already seeing at a fever pitch. I mean, the amount of lobbying going on in Washington DC around this is already very high. There are a fair number, well, there is a non-trivial number of Republican lawmakers who have heard this message. We saw a letter, I believe even during the conference or just before it from approximately nearly two dozen House Republicans coming out in support of maintaining clean energy tax credits in the IRA. I mean, I think I would describe the conversation and the state of play as very fluid and unpredictable in terms of both whether credits are maintained, jettison or perhaps just pared back, but also it’s not entirely obvious that all of the extension of Trump era tax credits will be paid for at all. So I think there is a universe in which that sort of helps some of these credits kind of stay in place.
I mean, I think that the Trump administration is most loud and clear on its antipathy toward electric vehicles and offshore and onshore wind. From there, it gets a little bit more scattered, I suppose. In fact, one of the things that we were chatting about on stage at the Axios event, Jason, is the fact that I think you raised the fact that we didn’t hear a huge amount one way or the other about hydrogen at the conference. I mean, certainly we heard Larry Fink on stage talk about when he was talking about more – the BlackRock chairman, Larry Fink – but he was talking about more pragmatism saying that yes, nobody wants to buy green hydrogen because it’s too expensive or something to that effect. But I have not heard a definitive signal from the Trump administration one way or the other on what is going to be the future of their views on hydrogen. And certainly that brings us back to the energy department, which doesn’t provide tax credits, but certainly funding through both the infrastructure law and the Inflation Reduction Act for hydrogen is something that I think we don’t have a great sense yet as to where those policies are going to shake out.
Jason Bordoff: Yeah. Javier, I’m curious from your take what you heard last week, and again, to Ben’s point about drilling down, you can’t lump certainly all low-carbon technologies together, but I felt like a lot of optimism and discussion of say nuclear, geothermal, maybe a little less about things like green hydrogen than a few years ago. But I’m curious what you saw in terms of optimism and pessimism.
Javier Blas: I think if I have to rank, I will say hydrogen is down, nuclear is up. I think that solar is up and wind is down, and that will be very much kind of a rough lines of what was up and down on new …Well, CO2 free sources of energy, I mean there is a lot of attention about geothermal. I think a lot of it is hype. It kind of reminds me of hydrogen three or four years ago on the potential of geothermal. Yes, there are some countries and regions of the world where geothermal can play a role, but do I think that is the savior that is going to resolve all of our climate change problems and so on? No, I don’t think so. And interestingly, on EVs on electric vehicles, I have expected to go to CERAWeek and hear more bashing about electric vehicles, particularly taking into account the history of President Trump’s dislike for EVs. And however, as we were in Houston, we have a Tesla demonstration on the lawn of the White House, and we have Senator Ted Cruz taking a picture of himself in a red Tesla saying that that was the coolest thing ever. Just kind of feels to me, and correct me if I’m wrong, I’m just going to this European lens to my views of the United States, but are not Republicans now in favor of EVs? I mean, they seem to love them.
Jason Bordoff: And of course Mark Kelly is getting rid of his EV. So everything else, things are getting more not less politicized. Sorry, Ben, go ahead.
Ben Geman: Oh, yes, I’m sorry to interrupt. I’m glad you brought that up, Javier. I think it was very much of a split screen effect because absolutely, yes, we are seeing these very demonstrative embraces of Teslas by President Trump, by Cruz, and by others. But that said, literally as the conference was going on, EPA announced that it was formally beginning the process to unwind the Biden era vehicle carbon emission standards. And what those standards are is essentially a sort of hard shove against the automakers or toward the automakers to greatly expand the penetration of EVs in their sales mix. And under those regulations, it would have needed to grow very substantially in the pretty near future. I think those regulations went out through the early 2030s, and you would see something on the order of well over, they would need to have well over 50% verging on two thirds of their mix of new sales becoming electric vehicles by that point. So yeah, I think it’s very much a split screen, these bear hugs of Tesla on the one hand, but the EPA action against electric vehicles literally during the same week. It’s really fascinating.
Jason Bordoff: We’ve talked about almost every source of energy, but one small one that really isn’t very important anymore according to the amount of attention it gets. I think Ben tweeted that there were about 50 sessions on data centers and AI. And Javier, I saw you tweet that there was one on coal. And I think coal is still important in the amount of energy it provides to the world.
Javier Blas: It is very important. Coal provides more than a third, it is about 36%. The latest data from last year of the world’s electricity comes from burning coal. Coal demand is an all time high. I know that in the West, in Europe, in the United States, we have lost tax from coal because it’s not part of our daily lives anymore. But coal is very present. And I thought that it is in some ways the elephant in the room there. No one wants to talk about it perhaps because even discussing coal is going to be seen as a form of endorsement of support, which is not the case. I think that the first thing to do to deal with a problem is recognize that you have a problem and to discuss that problem. And I find that the fact that CERAWeek is perhaps the world’s most important energy conference, certainly from the private sector point of view, and having close to 150, 200 panels discussions and only one at coal is a disservice.
And it all kind of boils down around emerging markets and particularly China, which consumes more coal that the rest of the world put together. But there was a particular comment on the coal panel at CERAWeek where one of the speakers said that in this decade, again, really was very clear from now the next 10 years or the 2020s, but regardless in this decade, China was going to consume more coal that the United States have done on his whole history. So I just tweeted that and say, well, I overheard this at CERAWeek and I got a lot of people writing to me and say, please, can you fact check this? Because it cannot be possible that in 10 years anyway. So I run some of the numbers and bear with me because this is a bit more art than science when you go and look at coal consumption numbers in the United States in say 1850, a hundred and seventy five years ago.
But if we look at the numbers I have found from the Energy Information Administration and other sources on the federal government, and you look at, and it’s not the whole history of the United States, but just the last 175 years, it is not a decade of Chinese consumption, but it’s thereabouts. It is equal to about 14 or 15 years. And I think that that is a fact that needs to be discussed more prominently, and I hope it is going to be an important energy conference here in London organized by the British government at the International Energy Agency in April. And I really hope that there is more discussion about coal and particularly the role that China plays on the coal industry.
Jason Bordoff: Yeah, Ben, I’m just wondering if you add anything to that, and particularly in the US market, what you heard, and I mean given how quickly people are looking for increased power generation for data centers, AI and the backlog for combined cycle gas turbines is five years – nevertheless, how long it takes for nuclear – it’s not crazy to think people will turn to coal to some extent.
Ben Geman: And in fact, we have this idea being voiced very specifically by interior secretary Doug Burgum, who also heads this new White House, what they’re calling the Energy Dominance Council. I mean, one thing I’ve been struck by listening to the early messages about that council from the White House is that while “drill baby drill” is probably their most famous line, a lot of the discussion of what they want this council to do seems to be more focused on electricity for data centers and other needs as opposed to upstream oil. And in particular, you’ve got Burgum suggesting that they want to look for ways to maintain US coal generation and avoid retirements. And I think how much of this can happen I think is a little bit unclear, but certainly the conversation yes is very different. I mean, stepping back a sec to the global lens, again, this was much more about developing countries, but the most recent international energy agency, what they used to call the medium term coal forecast, looking ahead four or five years or they’ve decided to sort of back off their estimate that we were going to see global coal consumption peak in, well, it didn’t peak in 2024 or doesn’t look like it will have peaked in 2024.
Now they’re actually seeing a slight rise going out over the next several years towards some kind of plateau. So I think that was the fact that they had to revise their estimates was yet another sort of reality check on global coal use. Taking it back to the US for a second, one thing that I’ve been sort of struck by is where the big tech companies are positioning themselves on how they’re going to power their data centers. I think that they’re just in a very fascinating position because approximately five to six years ago you had all of the biggest tech companies making these very aggressive climate change commitments then move ahead two to three years and generative AI, we start to see the rise of generative AI and a kind of recognition of what the needs for data center power are going to be, albeit that they’re still a little bit unclear as we were talking about a few moments ago.
So, thus far we have seen a willingness of the big tech companies to pay a pretty substantial premium if they can get their hands on clean electrons. But whether that remains the case or whether we start to see more sort of tailwinds for coal given rising US electricity demand here I think is something that remains to be seen. But is it possible that we’re already seeing some delay? In fact, we are already seeing some plans to delay what had been scheduled coal plant retirement. So yes, I think certainly coal probably did as Javier points out, deserve more attention in this conversation.
Jason Bordoff: And just to be clear, when I said it’s not crazy to imagine that happening that wasn’t an endorsement. And I think it’s important that policy tries to, tries to steer things in the right direction. I mean, when we talked earlier about climate realism, and I think I’ll just add to our conversation earlier, it is important part of climate realism means being realistic about the impacts of climate change that are in store for us and not forgetting about those. And I think from my standpoint, there could have been more discussion about that at any of these conferences last week as well. By the way, just one small thing we didn’t get to, but I’m kind of curious about. We talked about LNG and the global gas market, and there was much more discussion about Alaska than the US Gulf Coast than maybe I would’ve thought if someone said we were going to talk a lot about LNG. I was just wondering what either of you made of that and is there any prospect of that?
Javier Blas: It sounded almost, listening to some of the discussions in Houston about Alaskan LNG, that the pipeline is already built across a thousand miles of Alaska landscape and that the terminal costing billions of dollars is already built rather than being an empty site and that the contracts have already been signed. Again, I think that as always, there is an element of hype, but yeah, I’m a bit bemused. Can the project happen yet? For sure, but are there other alternatives that perhaps are easier to ship American gas or US gas into the Pacific, perhaps via Mexico? I think that they are, but it’s a question that they will require a significant amount of international cooperation between the United States and Mexico, which is at the moment lacking.
Ben Geman: Yeah, I think another aspect of that is the, yes, there was a lot of discussion, certainly behind the scenes on plans for this Alaskan pipeline, which on the pipeline side, these plans have been rattling around for many decades now. So there is certainly a reason to take all of this with a grain of salt. But yes, the proposal for the pipeline and the LNG terminal, I chatted briefly with Alaska Governor Dunleavy, and he told me that he’d been having many, many meetings with investors and potential off-takers, and that he hoped to now make some announcements soon. I mean, I think one thing that is very interesting here is that obviously President Trump has not been shy about joining tariff threats and exhortations to invest in this project among Asian buyers. He’s sort of put two things largely in the same sentence. Now, is that going to prove enough to get this project off the ground? I think as we’ve been discussing, there’s still a pretty large amount of skepticism around that just because you’ve got the existing infrastructure in other places and you’ve got, so I think Trump 2.0’s policies both on Alaska and on tariffs are putting some new momentum behind that project. And there was certainly, like I was saying, a lot of meetings about it at CERAWeek behind the scenes, but whether there’s any true prospect for this getting off the ground, yeah, there’s probably some reason to bet the under.
Jason Bordoff: Well, I don’t want to take up more of either of your time. You’re both busy. There’s a busy newsroom behind Javier and busy children’s artwork display behind Ben. And unless anything we didn’t get to that either of you wanted to make sure we touch on, I think we covered the landscape pretty comprehensively. This was fun. We should do this every week. It’ll be like Brooks and Shields or I dunno, some news hour round table. So I enjoyed talking to you both as I always do, and thanks for taking a little bit of time to explain CERAWeek and kind of what’s going on today in the energy and climate world to me and our listeners, Ben Gman and Javier Blass. Thanks so much. Thanks for having me on. Thank you.
Thank you again, Ben Geman and Javier Blas. And thank you for listening to this week’s episode of Columbia Energy Exchange. The show is brought to you by the Center on Global Energy Policy at Columbia University. The show is hosted by me, Jason Bordoff and by Bill Loveless. The show is produced by Erin Hardick and Mary Catherine O’Connor from Latitude Studios. Additional support from Caroline Pittman and Kyu Lee. Sean Marquand engineered the show. For more information about the podcast or the Center on Global Energy policy, please visit us online at energypolicy.columbia.edu or follow us on social media @ColumbiaUEnergy. And please, if you feel inclined, give us a rating on Apple Podcasts, it really helps us out. Thanks again for listening. We’ll see you next week.

Last week, energy industry leaders gathered in Houston for CERAWeek by S&P Global, one of the most important annual industry events focusing on the current state of energy markets, policy, and technology.

This year’s conference took place against a backdrop of shifting global energy dynamics — declining oil prices, the Trump administration’s “drill baby drill” agenda, growing concerns about energy security, geopolitical tensions, and ongoing debates about the pace and direction of the energy transition.

So what were the week’s key takeaways? How are energy leaders reacting to a second Trump administration? And what does the future of global energy markets look like?

This week host Jason Bordoff talks with two energy reporters — Bloomberg’s Javier Blas and Axios’s Ben Geman — about their takeaways from CERAWeek and what they heard on and off stage.

Javier is an opinion columnist for Bloomberg, covering energy and commodities. He was previously at the Financial Times where he held various positions including roles as the Africa editor and the commodities editor.

Ben is an energy reporter at Axios. He is the co-author of the daily Axios Generate newsletter and covers the world of energy business and policy. He previously covered these topics for National Journal, The Hill, and E&E News.

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