CERAWEEK HIGHLIGHTS: US energy policy, tariff uncertainties in focus

The Trump administration's energy policies, uncertainty around North American tariffs and shifting timelines for climate goals dominated discussions March 10, opening day of the CERAWeek by S&P Global conference in Houston.

Highlights of coverage by Platts, a part of S&P Global Commodity Insights:

Oil prices

Major oil trader Vitol sees crude oil prices in the $60-$80/b range as fundamentals have weakened somewhat but inventories remain low.

"I don't think we are in for a long, bearish period for oil prices," CEO Russell Hardy said. "But it's fair to say we are in for a slightly lower range than the last three to four years."

Tariffs

The Trump administration's tariff threats are creating uncertainty for businesses that could "do real damage" to US merger and acquisition activity, said Peter Orszag, CEO of global financial services firm Lazard.

"On the energy side, deals will be costly and complicated and there's a disconnect that is occurring over the 'Drill, baby, drill' front, especially if you are talking about oil and not oil equivalent," Orszag said. "It is a tumultuous time."

US LNG exports

US Energy Secretary Chris Wright signed an LNG export permit extension for the proposed Delfin LNG terminal offshore Louisiana, while criticizing the prior Biden administration's halt to LNG export approvals. The Trump administration has yet to resume issuing new LNG export licenses but is expected to soon.

"We're hoping to pick up the pace," Wright said during a press conference. "There's a lot of challenges for American energy and global energy, and this administration is passionate about increasing the availability of energy, the opportunities for American citizens and national security for our country and our allies abroad."

Offshore wind outlook

Wright defended the Trump administration's move to halt federal leasing for offshore wind energy. He said the Department of Energy plans to use billions of dollars in Biden-era loan authority to support new technologies such as advanced nuclear power.

"Offshore wind has been developed for well more than a decade in Europe, and everywhere it's been deployed — everywhere — it's incredibly high prices, incredibly huge investment and a large footprint on the local communities," Wright said.

Gas-powered data centers

Hyperscalers looking to power massive data centers are engaged in an "arms race" with competitors and need off-grid power to reach the market quickly, Chevron CEO Mike Wirth said. Chevron is entering this market because accessing sufficient reliable electricity through the power grid is a major bottleneck for companies building data center facilities to operate artificial intelligence technologies, he said.

"Our approach is to build a different kind of value proposition for a different kind of customer," Wirth said. "It will be behind the meter, not necessarily connected to the grid, at least in the first instance — I think over time it probably will be tied into the grid — but gigawatt-scale generation for a very specific type of customer looking for speed to market, high degree of reliability, scale."

Canadian energy

Any hopes for new Canadian oil pipelines hinge on federal elections in that country later this year, Alberta Premier Danielle Smith said. Her comments came after former UN climate envoy Mark Carney won a March 9 election to lead the Labor Party and become Canada's next prime minister.

"His aspiration has been to keep fossil fuels in the ground, and I don't know if he has changed his tune quickly," Smith said at a press conference. "But he needs to, as the world needs more Alberta oil and gas."