CERAWeek in Houston dominated by fears of “uncertainty”

(Houston, Texas) — Markets were rocked by uncertainty and fears of a recession as oil and gas executives gathered at the CERAWeek conference in Houston on March 10th.

U.S. stock indices sold off again, battered by turmoil in the tech industry and rising anxiety about an escalating trade war. The tech-heavy NASDAQ suffered its worst trading day since 2022. Crude oil prices were also dragged down.

In fact, “uncertainty” was a key theme throughout the first day of S&P Global’s CERAWeek conference, one of the largest annual gatherings of the global oil and gas industry.

Despite that unease, the day began with a brash address from U.S. Secretary of Energy Chris Wright, a former oil executive from Colorado, who vowed to “reverse” the Biden administration’s approach to energy and climate, which he said was “myopically” focused on “quasi-religious policies on climate change.”

He minimised the climate crisis, and said it would no longer guide U.S. policy.

“The Trump administration will treat climate change for what it is, a global physical phenomenon that is a side effect of building the modern world,” Wright said.

He announced the approval of a license extension for Delfin LNG, an offshore LNG project near Louisiana. That came a few days after the Department of Energy approved a license extension for Golden Pass LNG.

Many other conference attendees, including those in the oil and gas industry, were more delicate in their remarks, stressing the need to produce energy while also reducing emissions. But they also took satisfaction from the growing trend of governments relaxing their climate targets.

“The transition is a much longer thing than what people thought,” said Kevin Gallagher, CEO of Australia’s Santos.

Europe is “modifying” their climate policies in a “more pragmatic” direction, said Paolo Rocca, CEO of Techint Group, an Argentine-Italian energy conglomerate.

The words “pragmatic” and “realistic” were repeatedly used by top executives to describe the recent shift in the U.S. and Europe towards a more fossil fuel-friendly set of energy and climate policies. The Trump administration is in the midst of an aggressive campaign of deregulation, and the European Union is also easing off of some of its climate policies, although to a much lesser extent.

“We’re seeing massive investment of natural gas infrastructure from around the world,” said Jack Fusco, CEO of Cheniere Energy, the U.S.’ largest LNG exporter.

He said he is “not surprised” that gas used to be called a “transition fuel” and a “bridge fuel,” but is now considered the “fuel of choice.” At a separate panel, Takayuki Ueda, the head of Japan’s Inpex, echoed that framing saying that natural gas will be “used for longer than expected,” so maybe it’s closer to a “destination energy” rather than a transition fuel.

A moderator for one panel even asked gas industry leaders “if decarbonization should still even be a priority?”

Nevertheless, attendees saw no shortage of uncertainty everywhere they look — in financial markets, trade policy, regulatory policy, and future demand.

“Things are moving very fast, and very deep,” Rocca from Techint said. He was referring to the Trump administration’s rapid policy changes that have upended trade relations with allies and foes alike. “It is a concern.” Several panels focused on trade volatility and tariffs.

The war in Ukraine was also a top concern. The three-year war is still raging and recent shifts in U.S. policy have confounded many on both sides of the Atlantic. The Trump administration appears to be almost switching sides, downgrading its support for Ukraine and signalling that a loosening of restrictions on Russia may be drawing near. That has set off a panic in Europe and sparked a push for a massive campaign of rearmament.

Old alliances are giving way to an increasingly transactional world.

“But even in a transaction world — or especially in a transactional world — you still need partnerships and cooperation,” Ditte-Juul Jørgensen, the European Commission’s Director-General for Energy, said at the conference.

She said that U.S. LNG helped Europe get through the energy crisis following Russia’s invasion of Ukraine, and despite President Trump’s seeming efforts to break up the Trans-Atlantic alliance, she said she still sees a way for Europe to rely on U.S. LNG.

“We are confident that we can continue that cooperation,” she said.

Ditte-Juul Jørgensen met with U.S. gas industry officials in early March to discuss the details of how U.S. LNG would comply with EU methane regulations, an issue that has angered the U.S. industry. While the European Commission has indicated it would not repeal the methane regulations or significantly weaken them, there is some talk behind closed doors about tweaking how methane is measured and adjusting the limit on methane intensity, according to Politico.

Lobbyists representing global oil and gas companies are also pressuring Europe to water down methane regulation.

“We’re doing everything to reopen the methane regulation,” François-Régis Mouton, the European director of the International Association of Oil and Gas Producers, told Politico.

At CERAWeek, Jørgensen reiterated that European climate change targets and policies are necessary to provide business certainty, and are all the more important in a world of increasing volatility. And she said because Europe is not a major fossil fuel producer, it must continue to accelerate the energy transition, precisely because it will deliver energy security.

It’s not clear how Europe will resolve these tensions. Support at the EU level for an expansion of LNG purchasing, which is under consideration, could deepen its fossil fuel dependence and also further expose the continent to price risk.

In a seeming concession to criticisms from the U.S. gas industry, she signalled an openness to adjusting some regulations. She didn’t mention methane regulations specifically, but said the European Commission is focusing on simplifying some rules so that gas producers outside of Europe can more easily comply with them.

“Simplification is a key pillar in that competitiveness drive,” she said.

(Writing by Nick Cunningham; editing by Sophie Davies)