Standing before executives of the largest energy companies in the world, U.S. Energy Secretary Jennifer Granholm made an urgent plea for their help in dealing with the fallout of Russia’s war with Ukraine: Produce more crude and natural gas — now.
“Right now we need oil and gas production to rise to meet current demand, and we are here to work with anyone and everyone ready to take a leap into the future,” she said Wednesday at CERAWeek, the weeklong energy conference in downtown Houston.
Her comments reflected a remarkably different tone than she and officials with the Biden administration have taken toward the fossil fuel industry since Biden was sworn in last year. Rather than focusing on efforts to phase out the use of hydrocarbons and replace them with cleaner fuels, she said near record-high oil and gas prices caused by the Russian invasion of Ukraine will necessitate short-term steps to stabilize energy prices.
Gasoline prices have reached near record levels, with a barrel of West Texas Intermediate settling Wednesday at $108.70 with some predictions that it could rise to $130 a barrel. Granholm said the average price of more than $4 a gallon at gas stations across the country is sending shockwaves through the economy, especially among workers who must drive to or for work.
Before the Russian invasion, Granholm had mostly highlighted the Department of Energy’s efforts to accelerate the energy transition by investing in new energy technologies like carbon capture and hydrogen production. Her first trip outside of D.C., for example, was to visit a hydrogen plant along the Houston Ship Channel to tout efforts to grow that industry.
During her comments on Wednesday, she said the department is still moving forward with those initiatives. She cited $62 billion the department received through the infrastructure bill, which it will use to award competitive grants for new energy technologies and to establish at least four hydrogen hubs across the country.
She said the challenges presented by fast-rising traditional energy prices and climate change present historic challenges for the industry.
“The U.S. government has always partnered with the energy industry in times of need,” she said. “The oil and gas industry has powered our nation and gotten us to where we are today, and we want you to power this country over the next 100 years with zero emissions technologies.”
Daniel Yergin, vice president of S&P Global, organizer of the CERAWeek conference, said that while consumers and government officials have been pleading with oil companies to boost production, investors have largely been silent. He asked what Granholm would tell them in this moment when it comes to investing in more exploration and production, even as shareholders have in recent years clamored for companies to commit to climate goals and larger returns.
“Investors, like every human on the planet, we have to do something. We all have to give,” she said. “I hope investors are listening because we cannot have one element holding back for what we need for the world.”
Granholm said investors and energy companies should take inspiration from Ukrainians fighting for their country.
“The question for us all is what else can we do in this fight. We are on war footing — we are in an emergency,” she said. “We have to increase the short-term supply.”