Each year, Houston traditionally hosts two of the biggest energy confabs in the world: the OTC — the Offshore Technology Conference — and CERAWEEK, which continues this week at the Hilton-Americas hotel and the George R. Brown Convention Center in downtown Houston.
The OTC is still ahead — May 4th through 7th, and will this year integrate sustainable energy planning into its programs about the offshore gathering of oil and natural gas.
But this week at CERAWEEK, which stands for the Cambridge Energy Research Associates meeting, this year the big story is likely politics and how politics affects energy.
More than any other time in recent memory, events and geopolitics are having an overwhelming impact on oil, gas, and electricity, and therefore food production, manufacturing, transportation and renewable energy — because all of those industries are dependent on fertilizer, plastics, packaging, diesel fuel, chemicals, heat processes, metallurgy and other things that are done using oil and natural gas.
Geopolitical events and their impacts are on full display in the Middle East today, where oil and gas markets are under heavy pressure as refineries and production facilities are destroyed and transportation route such as the Strait of Hormuz are shut down.
“We have some really impactful programs, there’s about 15-thousand or so clients, hundreds and hundreds of our leaders here at S&P Global, and our analysts right there on site,” S&P’s Kurt Barrow says, with speakers such as US Energy Secretary Chris Wright telling his audience at Monday’s conference opener that US oil production needs to be strengthened to combat threats such Iran.
And China too, and that brings up another hot topic at this week’s conference: How to make energy deals with nations that are not only partners but also fierce competitors and even enemies, such as Russia or China.
And the technologies of energies have never been so complicated, with artificial intelligence now assisting both generation of electricity and production of oil and gas, while business deals can move increasingly toward the speed of light, with artificial intelligence helping bring dealmaking steadily toward the speed of sound and light.
With nations other than the United States and Britain becoming more aggressive on the world stage, energy markets are becoming more unpredictable, S&P’s Andrew Neale says, but there’s still plenty of good news about under-served markets.
“Still digging into China, Latin America, India, those growth regions where everyone in petrochemicals is looking for bits of optimism,” he says.
The closing of the Strait of Hormuz is a crisis in the industry, he says, because the products that come vis shipping down the Strait are so varied.
It isn’t just oil and gas, it’s feedstock materials and ammonia for use in fertilizers that are badly needed by farmers at this time of year, it’s chemicals needed for medicines, clothing, and building materials, as well as the usual gasoline, heating oil and diesel fuel products.
And that leaves out the increasingly complicated world of electricity generation, regulation, measuring and distribution, which are also facing huge new challenges in a fast-growing and fast-changing world.
S&P’s Kurt Barrow says lots of people at CERAWEEK will be “tackling all these questions, not just about markets but about technology, the geopolitics, the strategies, everyone’s kind of all-in,” including the woman who, as a Nobel Peace Prize winner, should be ruling Venezuela.
Maria Corina Machado will also speak at CERAWEEK, who’s expected to talk about Venezuela’s transition toward a stable, market-based economy and a globally competitive energy sector, though she probably won’t speculate if or when she may rise to the job of President of Venezuela, a place it’s said President Donald Trump would like to see her established permanently.