For the past 26 years, Cambridge Energy Research Associates (CERA) has hosted an annual conference in Houston that is world-renowned for its high-profile speakers and attendees’ willingness to exchange ideas and share industry forecasts. The consensus this year was that the power industry remains strong but market and political forces, often working at cross-purposes, make bringing any new power generation to market more problematic than ever.
Security was tight as oil ministers from the Middle East and CEOs from the largest oil and gas companies and electric utilities rolled into Texas in mid-February to present new ideas, defend agendas, and just mingle. More than 1,200 delegates from 55 countries heard more than 100 distinguished speakers discuss topics ranging from carbon abatement programs and the nuclear renaissance to utility-scale renewable technologies. Undeniably, the market downturn, tight money supply, and its effect on new plant construction was the central theme of the conference, even if the topic wasn’t formally placed on the agenda.
Risk and Reward
The theme for this year’s CERAWeek was "Risk and the Rebuilding of Confidence: Energy Strategies for a Turbulent Economy." The global recession was the uninvited 800-pound gorilla in the room that everyone pointed at and talked about. But no one had any idea how to ask it to leave. Regardless of one’s political stripe or environmental leanings, when money is tight, there can be no advance of any agenda. Utility senior manager uncertainty is the logical result of market and regulatory unpredictability, but now it is exacerbated by global competition for limited supplies of fuel and raw materials.
The first three days of the conference focused on worldwide supply and demand for oil and natural gas. Days four and five were dedicated to electric power, beginning with a keynote address by Fred Krupp, author of Earth, the Sequel: The Race to Reinvent Energy and Stop Global Warming.
Krupp describes himself as a "nonideological environmentalist" who also happens to be president of Environmental Defense Fund and a spokesperson for United States Climate Action Partnership (USCAP, www.us-cap.org). USCAP is an association of 26 large U.S.-based corporations and four environmental groups that have drafted a "blueprint" for federal cap-and-trade reduction of greenhouse gas (GHG) legislation. The USCAP blueprint calls for GHG emissions reductions of 20% from 2005 levels by the year 2050, and intermediate targets as early as 2012, but for reaching those goals in an economically responsible manner.
Krupp acknowledges that coal has a place in the nation’s energy mix going forward but tempers that statement with another: "Until there’s money to be made by keeping CO 2 out of the atmosphere, no one will build CCS [carbon capture and sequestration]."
Krupp went on to state his belief that federal cap-and-trade legislation is inevitable this year and that a proper mix of environmental strategies can lead the nation’s economic recovery. He also believes that "the climate change challenge will create more economic opportunities than risks for the U.S. economy." Not everyone was buying what he was selling.
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