HOUSTON — Executives from Chevron and other fossil fuel companies said Tuesday that natural gas is the primary option for slashing the energy industry’s carbon emissions as a shift to emerging technologies drags on longer than expected.
Chevron CEO Mike Wirth, speaking on the first day of this week’s Gastech conference, called for a “balanced conversation” about changes in the energy sector and the role of natural gas based on “realistic science.” He said the fuel can deliver reliability as well as lower carbon dioxide emissions, citing its role in power generation as coal plants are displaced.
“Cutting these emissions by switching from coal to natural gas could represent the single greatest carbon reduction initiative in history,” Wirth said in prepared remarks. “These reductions are achievable and not disruptive to national economies or individual lives.”
The case for gas is so strong, he argued, “that only politics can get in the way.” Wirth’s appearance in Houston came less than two months after the oil and gas company announced that it was moving its headquarters to Texas from California.
The CEO’s comments also came as organizers estimated that some 50,000 people from around the world gathered for Gastech in Houston — Texas’ largest city and the traditional U.S. energy capital. Still, Tuesday dawned with a fire burning near the city after a vehicle struck an above-ground valve, leading to an explosion of a pipeline carrying natural gas liquids — and offering a reminder of fossil fuels’ volatility.
Executives from companies such as ConocoPhillips and Cheniere — both based in Texas — slammed the Biden administration over a slowdown in permits for liquefied natural gas exports while offering support for fracking, the drilling process that has seen increased attention during this year’s presidential campaign.
For years, natural gas companies have touted natural gas as a “bridge fuel” for countries seeking to transition to reduce CO2 emissions through renewable sources like solar and wind. Natural gas power generation produced less than half the carbon dioxide emissions of coal powered generation per megawatt in the U.S. in 2019, according to the U.S. Energy Information Administration.
Jack Fusco, CEO of LNG company Cheniere, said the energy transition will take longer than expected while technology develops. He said environmental groups that want to switch straight from fossil fuel-powered generation to renewables misunderstand how electricity systems work.
“I think there’s a misconception that you can replace base-loaded, coal-fired power plants with renewables,” Fusco said. “You can’t. You can’t start your oven or your hair dryer or your dishwasher on renewable power.”
He said that’s because renewables can be intermittent and provide spikes and valleys of power, which makes them more difficult to integrate onto electric grids without more stable flows of electrons that can come from natural gas-fueled power plants. Renewable advocates, however, argue that utility-scale batteries can be used to help fill the gap, and that installing more renewable capacity and transmission can help mitigate potential shortfalls.
Natural gas’ share of U.S. electricity generation is forecast to decline slightly from 2024 to 2025, DOE’s analytics agency said in its most recent short-term energy outlook — from 42 percent this year to an estimated 39 percent in 2025. But it remained the nation’s top source of power production last year.
Environmental and advocacy groups, however, have expressed concern that continued reliance on natural gas and other fossil fuels will accelerate climate change by allowing emissions to remain high.
Tyson Slocum, director of the energy program at the consumer advocacy group Public Citizen, said the “real world” is one where the climate crisis is affecting people across the globe.
“A realistic approach does not brand science as political because it is inconvenient for one industry,” Slocum said in a statement Tuesday. “Fossil fuel companies can rebrand the issue as much as they want, but the future we want to live in is one in which clean, reliable energy drives us forward into a bright future for all.”
LNG pause
The now-overturned Biden administration pause on LNG export approvals was also a prominent topic of discussion at Gastech on Tuesday.
The White House announced the Department of Energy’s freeze — on LNG export applications to countries that lack a free trade agreement with the United States — in January, but it was overturned in July by a judge appointed by former President Donald Trump. The Biden administration appealed the order, from Judge James Cain of the U.S. District Court for the Western District of Louisiana, last month.
The freeze did not affect previously approved exports. The United States exported more LNG than other country in 2023, EIA has said.
While DOE issued a non-FTA in late August to an LNG project in Mexico, observers have said they don’t expect the department to issue any additional approvals before the next president is inaugurated in January — either Trump or Vice President Kamala Harris.
Wirth with Chevron said the Biden administration’s posture elevated politics over progress. He said LNG can lower emissions by boosting a shift away from coal and providing energy stability to U.S. allies in Europe in Asia.
“So, when it comes to advancing economic prosperity, energy security and environmental protection an LNG permitting pause fails on all three,” Wirth said. “It raises energy costs by taking potential supply off the market. It threatens reliable supplies of LNG, undermining energy security for our allies.”
DOE has said the analyses that underpin its public interest determinations for LNG approvals to non-FTA countries are several years old and need to be updated, given how much LNG the department has already authorized to be shipped overseas. The department also issued a fact sheet in February to combat what it called misconceptions about the policy and later issued a letter rejecting industry arguments.
However, some of the biggest LNG suppliers and buyers seemed less concerned during a panel shortly after Wirth’s remarks. Meg O’Neill, CEO of Australian oil and gas company Woodside Energy, said her company isn’t affected by the Biden administration pause.
She said companies like hers see presidential administrations — and their policies — come and go, but ripple effects of policy decisions like the pause can be cause for some concern. O’Neill said “wobbliness” in industry support from countries like Australia and the U.S. can cause concern among buyers.
“That causes concern amongst our buyers and the buyer communities who are scratching their heads and saying, ‘Well look, we’ve built our economies depending on a product from you,'” she said. “Now, there’s a threat of disruption to the energy supply that’s core to their economies.”
Local elected officials from Louisiana on Monday encouraged LNG companies to press ahead with construction after the pause was halted, despite the Biden administration’s vow to continue to fight for the pause in court.
While the Federal Energy Regulatory Commission is responsible for approving the siting and construction of LNG import and export facilities, DOE is in charge of authorizing the export of the commodity.
“Hopefully FERC will continue to plow forward and approve these permits,” said Louisiana state Sen. Jeremy Stine, a Republican. “But if I’m those companies in southwest Louisiana or wherever, you may plow ahead because Judge Cain gave you that right. And the Department of Energy will hopefully continue to approve these.”
Election effects
While the LNG pause remains in legal limbo, Brad Crabtree, assistant secretary for DOE’s Office of Fossil Energy and Carbon Management, expressed optimism Tuesday that the 2022 Inflation Reduction Act would be safe even if Trump, the Republican presidential nominee, wins the November election.
He pointed to historical precedents for tax credits and an aversion of Congress to changing the rules for the private sector once updates are enacted. He said DOE is focused on allocating the $12 billion allocated for carbon management projects and $62 billion for energy and climate projects under the 2021 bipartisan infrastructure law within the five-year time frame laid out in that law.
“We are literally moving heaven and earth right now to make sure that the various funding streams get expended within this presidential term and commit as many as possible,” Crabtree said.
Company executives, meanwhile, focused on a policy reversal from Harris, the Democratic presidential nominee who said she does not support a ban on fracking. During her presidential bid in 2019, Harris said she would support a ban on hydraulic fracturing.
Cheniere’s Fusco said Harris has no choice but to embrace fracking. If she did not, he said, the prices for natural gas and oil would increase dramatically.
When asked by a moderator if he trusted her pivot, Fusco said: “We hope for cooler heads to prevail and that maybe she’s sincere about what she’s saying. So, yeah, I have to trust it — until I don’t.”
CEO Ryan Lance of ConocoPhillips, an oil and gas producer, said the industry needs to go beyond asking about candidates’ stances on fracking.
“It’s the next question that’s really important,” Lance said, adding that support for fracking means a person supports the infrastructure needed to get gas to markets.
“So you’re going to support federal [oil and gas lease] sales to continue this revolution, but you’re gonna stop this crazy LNG pause from going forward,” he said.
Webb reported from Houston. Reporter Carlos Anchondo contributed from Washington.
