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Electric Power, Coal, Natural Gas
April 02, 2025
HIGHLIGHTS
Texas renewable shift raises gas’ importance
Energy security needed for environment
The Permian Basin is "a tremendous geologic gift to Texas and the United States," given the nation's increasing demand from an "all-of-the-above" energy economy, ConocoPhillips Chairman and CEO Ryan Lance said April 2 at a conference in Austin, Texas.
But even with enhanced hydraulic fracturing technology, likely no more than 20% of the resource can currently be extracted, Lance said during The University of Texas at Austin's Energy Week conference.
"That has really been responsible for the huge amount of growth in the US energy system, and it's not done," Lance said. "This could be a 1,200-foot-thick column, and you calculate all that you theoretically think all the oil and gas is in place in this 1,200 feet, we're probably only getting somewhere around 15%, maybe 20% of the recovery of that. So, the next phase is when you ... create the technology to take those recovery factors in this very tight rock up to something higher, more like conventional reservoirs where we're getting 30%, 40%, 50%, 60% of that oil out. I tell you I've never bet against this industry on technology, because we'll figure it out."
Higher prices may be necessary to incentivize deployment of such technology, Lance said.
"Once we get that price signal and we start doing it generally, we get pretty efficient, and when that happens, the price comes back down," Lance said.
The Texas power grid's shift toward renewable energy has only increased the importance of its fossil fuel resources, Lance said, not just for Texas but for the world, where many people live without ready access to reliable electricity.
"I think the answer is obviously all of the above," Lance said. "Getting energy security and energy affordability and reliability is so important, and it doesn't matter where it comes from. If the sun shines a lot and you can move solar batteries or the wind blows, you ought to be doing that. We're going to need baseload power because the capacity factor generally for renewable forms of energy at best is about 30% to 35%. So, you have to have some form of backup power generation. You have to have a baseload power. It's got to come from one of the pots -- natural gas, oil, coal, batteries."
Fifteen years of flat power demand growth, driven by increased energy efficiency, allowed the US to reduce coal-fired generation, but global coal use peaked in 2024, and "will peak again this year," Lance said.
"It just tells you what the energy requirements are around the world today and why this all-of-the-above approach is just so important, because affordability and reliability are the central point," Lance said. "If you can bring affordable, reliable energy to your country and your people, your area has the chance of gaining some wealth. And then obviously, what comes next is you want clean water, clean air, clean environment."
The fossil fuel industry "is going to be around a long time," but ConocoPhillips sees a few problems, such as with natural gas flaring, Lance said.
"It's generally not a US problem," Lance aid. "It's an Iranian problem. It's a Nigerian problem. It's a Venezuelan problem. ... We can't afford to go through this experiment on our planet."
And power demand has resumed steep growth in the US, especially in Texas, Lance said.
"The peakload in Texas on any given day during the summer when it's hot ... is the equivalent of California plus New York, and by 2030, we have to add the equivalent of a California system in Texas," Lance said. "We're trying to electrify all of our equipment because it's better than burning gas, so we can avoid future emissions. The vehicle system is electrifying in the US. The power plants for the hyperscalers and the artificial intelligence [data centers] ... is a power thing that's coming for us not only across the US, but also globally."