The CERAWeek energy conference kicked off at the downtown Hilton America. This was the first in-person conference since the COVID-19 pandemic forced the event to go virtual in 2020 and 2021.
According to Gas Buddy, the national average for gasoline has risen 49 cents a gallon over the past seven days. Biggest seven-day surge in history since Hurricane Katrina.
Gas prices will no doubt be one of the main topics at this week’s energy conference.
Leading and producing companies from the oil and gas industry from around the world will discuss a wide range of topics including energy markets, workforce and innovation during the five-day conference.
“It’s important to talk about these issues because things are changing in the energy and environmental space,” said Katie Mehnert, CEO of Ally Energy. “The way we use energy, how we produce energy and how the environment responds to energy. It’s very important that we come together as an industry to talk about these issues, especially now given what’s going on in the country and the world abroad.”
Mehnert said the oil price surpassed $130 a barrel mainly due to the situation between Russia and Ukraine. She said energy leaders will use this week to talk about how the industry will evolve.
She said now is the time to focus on how the industry will evolve and what that means for consumers.
“I think a lot of people think that the oil companies influence prices, and actually they don’t. Oil prices are affected by the market volatility you’re seeing and consumer demand,” Mehnert said. “Many people are pulling out of Russia, including the oil companies. So you see how the world reacts to a perceived supply gap.”
“Certainly it’s really important because we’re not just bringing everyone in our industry together, we’re bringing all industries together because we all use energy. You might just think of electricity or fuel or fuel, but in fact energy is what we all do our jobs no matter what they are,” said Steve Louis, Eternal Energy’s chief executive officer.
He said we should talk about the issues at hand. Industry leaders need to discuss together in one room.
“We have CEOs from all energy companies. We have technologists. We have investors. We have policy makers. said Louis.
Consumers are currently concerned about the price of gas. Louis said now is the time for consumers to save as much as they can now.
“Many of us don’t change our behavior unless it has a meaningful impact on our wallets. We have seen these cycles in the past. In the past we have bought earlier when oil prices were high. We’re buying smaller cars, but especially this year it’s interesting because we now have the opportunity to use EVs with EVs,” said Ludwig. “The problem is that oil and gas companies see that oil prices are too high, gas prices are too high, people will switch to the renewable sector and to some form of electric vehicles. What we’re finding out is that once people go electric, they won’t go back to gas-powered vehicles. So this is a real concern for oil and gas companies.”
Referring to Houston’s economy, Louis said, “We have a lot of energy and energy-related companies in Houston. They will react in a way if they know this is a short-term cycle as opposed to a long-term trend. The profit they get from high oil prices is probably one of four things.”
1) Continued investment in renewable energy, wind, solar, geothermal. “We have now invested approximately $755 billion in green energy. We believe this will continue to happen as more funds become available.”
2) Energy companies are likely to return many profits to their shareholders. “Energy stocks have underperformed in recent years, and it’s about time shareholders got a bigger dividend.”
3) Retain profits and be able to repay those loans if there’s another downturn. “We don’t know when that will be.”
4) Invest in oil and gas projects. Domestic. “Russia accounts for about 7 million barrels of oil equivalent per day in exports, so the United States, and Texas in particular, is very well positioned to make up that gap by using our vast shale gas reserves, and then we have a lot of wind power here as well In the state.”
“There is one caveat I would like to mention, the price of developing a barrel of oil here will go up along with inflation. It might even go up at a higher percentage because we have a bit of a labor shortage in the oil and gas industry. We remember losing about 107,000 oil and gas professionals in 2020 and probably many more than in 2021,” Louis said.
These professionals don’t come back for the same salaries they had before, if at all. So that’s an increased cost. Likewise, all of the equipment that has been idle for so long may or may not have been serviced. So with these low start-up costs comes a cost. And of course all the assets we have both onshore and offshore in terms of oil and gas deposits are depleting the deposits so you always have to keep exploring. And there are costs associated with that.
Louis believes the rise in gas prices could be temporary. “We may have enough wind or solar resources to offset that or vice versa. Spend your money wisely, keep investing in the United States economy, and in the long run we will be fine.”
Mehnert agrees. “The industry benefits from higher prices because we pass those costs on to consumers, much like Apple or any other company would. We see many price increases due to inflation. We also see prices falling when it comes to groceries for other commodities. I don’t think that will take very long. I think that’s why you don’t see companies responding very quickly by hiring their workers or drilling more oil and gas. But, if we drilled more oil and gas here in the States, we would protect our supply position.”
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https://abc13.com/ceraweek-energy-markets-workforce-innovation/11630687/ CERAWeek returns to Houston for its 40th anniversary and first in-person event in two years