There is little argument among professionals that the energy transition is a necessary reality.
However, whether the transition will be smooth or turbulent remains to be seen. John Hess, CEO of Hess Corp., said he believes oil has a critical role to play in the transition.
Participating in a recent panel at CERAWeek by S&P Global are, from left, Daniel Yergin, vice chairman of S&P Global; John Hess, CEO of Hess Corp.; Jack Fusco, president and CEO of Cheniere Energy; and Tengku Muhammad Taufik, president and group CEO of Petroliam Nasional Berhad.
"To have a smooth energy transition, we need a strong oil industry and a strong gas industry," he said during a panel at CERAWeek by S&P Global. "The U.S. is the largest oil and gas producer in the world. We should be playing to that strength during the energy transition. We should not have govemment officials saying, 'We don't need oil and gas five years from now.' We should not have bankers saying, 'We're not going to invest in oil and gas anymore.' We're starting to see the ruptures in the economic system because we're not investing enough."
Not only does oil and gas play a key role in the U.S., but it's also "a strategic industry" that provides as many as 12 million direct and indirect jobs, Hess said.
"That's more than in the automotive industry or the aviation industry," he said, pointing to the fact that power costs for electricity in the U.S. are three to 10 times less than they are in other parts of the world, including Asia and Europe.
"Most of all, we are energy independent," Hess asserted. "National security is at stake. We are energy secure. In fact, we export 12 bcf per day of natural gas and 3 million bpd of crude oil. Recognizing the strategic role it plays in everybody's lives, it's very important for the U.S. to stand tall here and secure the energy of our country and the world by ensuring a strong oil and gas industry."
Co-panelist Jack Fusco, president and CEO of Cheniere Energy, recalled that in 2018 he announced Cheniere's four climate principles: science, transparency, supply chain and operational excellence. "We have stayed true to those climate principles," he said.
In support of transparency during the energy transition, Fusco said Cheniere is beginning to issue cargo emission tags, which account for the carbon footprint per tanker, specific to its cargo.
"Our plan is to achieve 'actionable' environmental improvements, not 'aspirational,"' he affirmed. "We've put a program together where we are looking at everything - our entire business process, including the upstream and downstream aspects of our product - to make it more sustainable for our customers."
Harvest the 'low-hanging fruit'
While Petroliam Nasional Berhad's (PETRONAS') President and Group CEO Tengku Muhammad Taufik doesn't claim to be the representative spokesperson for Asia or emerging economies, he strongly asserted that the transition "needs to be both just and responsible."
"There is an unfortunate situation right now: For too long, we have allowed 'perfeet' to be the enemy of 'good,'" Taufik said. "There are already available technologies today to deal with the low-hanging fruit. We talk about methane and the electrification of our own operations. PETRONAS has embarked on zero-flaring initiatives, and we're electrifying a number of our LNG facilities. We need to do what is readily doable today. In mapping out the energy transition, regardless of which jurisdiction, geography or market you serve, you must be careful not to trigger unintended consequences."
The entire oil and gas service industry "needs to pivot," he said.
"Imposing standards that inadvertently cause the cessation or non-competitiveness of the industry's entire support ecosystem is going to make energy security even worse," Taufik explained.
