World Petroleum Congress touts fossil fuels’ staying power in wake of UN climate summit

HOUSTON (CN) — A villain most responsible for climate change? Or a catalyst needed to raise the living standards of millions of people in developing countries? The World Petroleum Congress this week in Houston highlighted the oil and gas industry’s complexities and challenges.

Members of the congress from 65 countries — executives, technocrats and energy ministers — came to Houston, the so-called Energy Capital of the World due to its concentration of oil company headquarters, for three days of forums and exhibitions at a downtown convention center.

The energy transition needed to meet the goal of net-zero greenhouse gas emissions by 2050, set by heads of state last month at the United Nations Climate Change Conference in Glasgow, was front of mind for the participants.

But they stressed it will take decades for renewable energy to supplant oil and gas, with some calling it a mistake to lean heavily into wind and solar power.

“The parameters of the public discourse seem reduced to the question are you for or against fossil fuels,” said Mohammad Barkindo, secretary general of the Organization of the Petroleum Exporting Countries, appearing remotely from Austria for a panel titled “Energy Transition: Scenarios for the Future."

“It is perhaps the ultimate false dichotomy. It erroneously constrains what options are available. It should not be a question about one or the other. The complexity of the challenge calls for an inclusive approach,” he continued.

Though Barkindo said OPEC embraces the development of renewables as “vital to quench the world’s growing thirst for energy,” he noted the group’s latest World Oil Outlook projects by 2045 they will make up only 24% of the global energy mix, while oil (28%) and gas (24%) will still supply more than 50% of the world’s energy needs.

“In our outlook, the share of EVs [electric vehicles] in the total world transportation fleet is projected to expand to close to 20% in 2045. We support their development in a sustainable world. However, for many of the world’s population electric vehicles will not offer a viable alternative to the internal combustion engine, primarily due to cost,” Barkindo added.

Alex Epstein, author of “The Moral Case for Fossil Fuels,” said the industry needs to do a better job of making the case oil and gas is superior to wind and solar in a panel dubbed “Perception of the Energy Industry: Creating a Future Vision.”

Epstein claims the conventional wisdom that use of fossil fuels is causing a climate catastrophe is demonstrably false, and they have actually created a “climate renaissance” in which fewer people are dying from extreme weather events because we have harnessed hydrocarbons to alleviate drought, heat and cool buildings and build sturdier infrastructure.

“We’ve never been safer from climate. And fossil fuels get the credit,” Epstein said.

John Beard, founder of the Port Arthur Community Action Network, has a different outlook.

From his home’s patio he can see the country’s largest oil refinery, owned by Motiva Enterprises, a subsidiary of Saudi Arabia’s state-owned oil company Saudi Aramco, and he blames a cancer cluster among fellow Black residents of the far southeast Texas city on the area’s numerous petrochemical plants.

Beard, retired after a long career working at Exxon Mobil’s refinery in Beaumont, said he agrees the move away from oil and gas will take a long time.

“It’s going to take long because to have a transition means to stop where you are and go in the opposite direction,” Beard said Wednesday in a phone interview.

“We’re not doing that. We have petrochemical facilities that are expanding,” he added. “We have more pipelines being passed from the Permian Basin to the Gulf Coast. We are looking at building at least 29 LNG [liquid natural gas] and offshore oil port facilities. So it’s more like ‘Drill baby, drill’ and ‘Burn baby, burn’ instead of saying, ‘Let’s go clean and green.’ That’s because these people aren’t committed to actually making the effort.”

The World Petroleum Congress gives a Dewhurst Award, named for its founder, late English geologist Thomas Dewhurst, at its triennial gathering to people who have shown excellence in the petroleum industry.

For the 23rd World Petroleum Congress, Dr. Daniel Yergin received the award Wednesday following an introduction by the 2017 recipient Rex Tillerson, U.S. secretary of state under President Donald Trump and former Exxon CEO.

A Pulitzer Prize-winning author and vice chairman of the research firm IHS Markit, Yergin emphasized in a speech history shows the shift from one energy source to another is very slow and there have been no clean breaks.

“The 19th century is known as the century of coal. But it was not until the beginning of the 20th century that coal overtook wood as the world’s number one energy source,” he said.

Energy transitions have also been energy additions, Yergin stated.

“Although oil was discovered in Titusville [Pennsylvania] in 1859, it was not until more than a century later, the 1960s, that oil overtook coal as the world’s number one energy source. But today coal consumption is almost three times what it was in the 1960s,” he said.

The latest transition is different, Yergin said, because it is meant to be a complete switch for a world that gets 80% of its energy from hydrocarbons to a net-carbon-free energy system in less than 30 years.

Economists say the most substantial accomplishment of the Glasgow summit was the establishment of rules agreed to by almost 200 governments for carbon emissions trading, a scheme in which countries will put a price on emissions to reach national reduction goals.

Companies that exceed caps on pollution can buy carbon credits from those that have earned them by, for example, capturing methane, to comply with their countries’ standards.

The rules could pave the way for carbon trading between companies based in different countries.

But Yergin warned such frameworks will be seen as unfair by developing countries whose economies depend on oil and gas exports.

He noted the European Union, which already has a carbon tax-and-trade system, is moving to establish carbon tariffs to be assessed according to the carbon expended in making some products, starting with steel, iron, aluminum, cement, fertilizer and electricity.

“Europe sees these tariffs as a way to ensure its policy values on climate change are adopted globally … yet developing countries regard these moves as discriminatory and an effort to impose Europe’s way of life on them. As the range of these tariffs expands it will be a troubling issue for exports from developing countries, including exports of oil and gas,” Yergin predicted.

Besides carbon taxes, there was much talk of carbon-capture systems and methane-emissions reduction at the World Petroleum Congress.

But for Beard, the climate activist and Port Arthur resident, where Hurricane Harvey’s record-breaking deluge flooded 20,000 homes in 2017, those are simply Band-Aids for the incurable ills of an industry he believes must be phased out quickly.

“I believe you have to accelerate the pace of making the transition,” he said. “You have to make the commitment to putting the necessary things in place such as the infrastructure, the emphasis on renewables, the emphasis on electric cars, the emphasis on electric mobility.”

“Right now in Houston, they are talking about widening Interstate 45 and that’s creating further congestion,” Beard continued. “One of the things we’re going to have to do is incentivize or find a way to get Americans out of their cars and go to more efficient forms of transportation.”

Beard, 65, attended the climate summit in Glasgow last month.

“When I was in Glasgow, Scotland, there were electric buses, there were electric trains. We don’t have a mass transit system to be able to get around like that in our cities. So that stands to reason we’re putting more into the atmosphere.”

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World Petroleum Congress touts fossil fuels’ staying power in wake of UN climate summit

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