Energy Secretary Chris Wright, at a conference, tells cheering fossil fuel executives he is swinging energy policy “180 degrees” – turning the Titanic back toward the iceberg.
Sounds good, like “Drill Baby Drill”, but Mr Wright knows it’s a lie.
Coincidentally I’m sure, Mr Wright, a fracking millionaire, stands to gain as the US exports more Liquified Fossil gas – further impoverishing already stressed Americans, but raising the price, and the value of his holdings.
Mr. Wright, however, was dismissive of renewable power, which he said played only a small role in the world’s energy mix. Natural gas currently supplies 25 percent of raw energy globally, before it is converted into electricity or some other use. Wind and solar only supply about 3 percent, he said. He noted that gas also had a variety of other uses — it could be burned in furnaces to heat homes or used to make fertilizer or other chemicals — that were hard to replicate with other energy sources.
“Beyond the obvious scale and cost problems, there is simply no physical way wind, solar and batteries could replace the myriad uses of natural gas,” Mr. Wright said.
Mr. Wright has argued that there is a moral case for fossil fuels,saying they are crucial for alleviating global poverty and that moving too quickly to cut emissions risks driving up energy prices around the world. He has denounced efforts by countries to stop adding greenhouse gas to the atmosphere by 2050, calling that a “sinister goal.”
At a conference in Washington last week, Mr. Wright said that African countries needed more energy of all kinds to lift themselves out of poverty, including coal, the most polluting fossil fuel. “We’ve had years of Western countries shamelessly saying don’t develop coal, coal is bad,” he said. “That’s just nonsense.”
In Houston on Monday, other oil and gas executives echoed Mr. Wright’s remarks, pitching oil and gas as the best solution for impoverished people in developing nations around the world.
But Mr. Wright warned against a shift to renewable energy that he said was likely to prove costly. “Everywhere wind and solar penetration have increased significantly, prices went up,” he said.
That is not always true. Texas has seen its electricity prices decline slightly over the past decade as wind and solar have grown rapidly and now supply more than one-quarter of the state’s power. The costs of wind turbines and solar panels have dropped precipitously in the last decade. But some places, like California and Germany, have seen electricity prices rise significantly at the same time they ramped up their use of renewable energy.
Some energy executives at the conference were more optimistic about renewable energy. John Ketchum, the chief executive of NextEra Energy, the largest producer of wind and solar power in the United States, said that renewables were essential for meeting growing demand for electricity in the United States over the next few years — especially since there was a large backlog for new turbines that burn natural gas.
Renewable energy “is cheaper and it’s available right now,” Mr. Ketchum said. “When you look at gas as a solution, as an example, to get your hands on a gas turbine and to actually get it built throughout the market, you’re really looking at 2030, or later.”
OilPrice.com:
Contrary to expectations for a self-defeating flood of new energy production under the second Trump admin, Exxon’s Upstream President Liam Mallon said that oil and gas producers in the US will not raise output significantly in the coming years despite calls from President-Elect Donald Trump to “drill, baby, drill.”
“I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing,” Mallon said on Tuesday at a conference in London, according to Bloomberg.
“.. I don’t think we’re going to see anybody in the drill, baby, drill mode. I really don’t.” Mallon said.
U.S. oil and gas producers are likely to boost output primarily from improved efficiencies rather than new drilling and higher spending, Baker Hughes (NYSE:BKR) chief executive Lorenzo Simonelli told Reuters on Monday. Simonelli’s sentiments mirror those of Exxon Mobil’s (NYSE:XOM) Upstream President Liam Mallon who recently dismissed the notion that U.S. producers will dramatically increase output under a second Trump term.
“I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing,” Mallon said last week at a conference in London.
With oil prices falling in the current year, profits are likely to shrink, further limiting Big Oil’s spending power
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In reality, global gasoline sales are peaking, limiting Big Oil’s ability to expand without further crashing prices, and their profits.
Despite Trump’s full-throttle push to “unleash” U.S. energy, Permian oil producers are keeping their foot on the brakes. At a Houston conference this week, energy executives made it clear that while production is still growing, the breakneck pace of the past decade is history.
In 2025, Permian output is expected to rise by about 250,000 to 300,000 barrels per day (bpd), down from last year’s 380,000-bpd increase. That’s a 25% slowdown, and it’s not just because of market conditions—it’s intentional.
On Thursday, Chevron’s Barbara Harrison summed up the mood to Reuters: “We still expect to see growth in the Permian, but we expect to see that moderated.” In other words, U.S. shale is no longer in “drill, baby, drill” mode. Instead of chasing volume, companies are focused on keeping costs in check and delivering returns to investors—a stark contrast to the reckless production boom of the 2010s.
Bottom line: The days of unbridled U.S. shale expansion are over, oil executives say. The industry is moving cautiously, balancing supply growth with financial discipline. Trump may want a flood of new production, but Wall Street wants profits. Right now, Wall Street is winning.
Texas actually burnt more gas for power last year than ever – the steady growth of wind over the prevous 7 years, and rapid growth of solar over the previous 3, was in addition to gas, not replacing it. (Coal power has gone down by 42 TWh since 2018, with the increase in gas matching about half of that, at 22 TWh, while wind and solar combined rose by 103 TWh over the same period.)
California’s gas use over the same period rose a bit, then fell to about where it started, while solar played a much larger role than wind, the opposite of Texas. I’d say the much sharper rise in prices in California (and Germany) was due to RE mandates and subsidies skewing the market, more than inherent price volatility from their intermittent nature.
Well, there was a little thing called the Ukraine invasion and cutoff of Russian natural gas that has played havoc with Europe.