For years, Mark Brownstein of the Environmental Defence Fund felt a little foreign at Houston’s big energy conference, where fossil fuels were king and conversations about climate change and clean energy were largely whispers in the hallways.

“Now, it is the main stage,” said Mr Brownstein, who has participated in the CERAWeek by IHS Markit conference since 2003. “Now, you’re talking about renewables and batteries and vehicle electrification.”

This year’s CERAWeek is all about topics like carbon capture and investing influenced by ESG, or environmental, social and governance factors — a sign of how swiftly the energy industry is being buffeted by the world’s quickening transition to cleaner energy sources.

The influential gathering of global energy leaders, which began Monday and is being held virtually this year due to the pandemic, is a succession of CEOs and government officials detailing efforts to reinvent themselves for a lower-carbon world.

Microsoft Corp. co-founder and philanthropist Bill Gates touted investments in clean-tech start-ups and carbon capture technologies to make the world greener. Andy Jassy, the incoming CEO of Amazon.com Inc., outlined the retail giant’s push to power its operations with renewable energy. The heads of some of the world’s biggest oil companies detailed how they were trying to turn into green giants to contribute to a cleaner future.

Bernard Looney, chief executive of BP, said the world is running out of time to cut carbon emissions, but that his company has recognised “an enormous business opportunity” in upgrading the global energy system, which will require trillions of dollars of investment.

Mr Looney said BP would pivot over the next decade by lifting spending on low-carbon technologies and renewable power generation and cutting fossil fuels production 40 per cent by 2030. Those efforts, he said, will cut BP’s greenhouse gas emissions between 30 per cent and 40 per cent.

“We’ve been an oil-and-gas company for 112 years and I think this is a moment where we have to reinvent the company,” Mr Looney said.

The conference’s agenda underscored the new terrain the energy industry is navigating, as once-peripheral issues have become central considerations for its future.

Goals to reduce net carbon emissions to zero by 2050 have become a benchmark, not only for policy makers but also for companies and investors’ strategies, said energy historian and expert Daniel Yergin, vice chairman of IHS Markit, who leads the CERAWeek conference.

CERAWeek also marked one of the first encounters between oil executives and the new Biden administration. White House officials participating in the event said President Biden would resume US collaboration with other countries to curb greenhouse gas emissions, and that financial regulators are beginning to seek input from companies as they work to set new standards for climate-risk disclosures.

On Tuesday morning, John Kerry, the Biden administration’s climate envoy, said oil companies need to move faster on becoming greener energy companies and moving away from fossil fuels, both to save the planet and their bottom line. He added that people want electric cars over gasoline-powered cars.

“Where’s the revenue going to come from? [Oil companies] don’t want to be sitting there with stranded assets,” he said. “That fight is useless. You’re going to end up on the wrong side of this battle.”

Mr Jassy said Amazon, which has pledged to power itself with renewable energy by 2030, is on pace to beat that goal at data centres across its operations five years ahead of schedule. On a panel called Reinventing Energy with Mr Looney, the CEO of BP, Mr Jassy said companies looking to reinvent themselves are better off helping to shape that change than wishing it away.

“They have to avoid fighting gravity,” he said.

Scott Sheffield, chief executive of Texas shale producer Pioneer Natural Resources Co., said during the conference that the company is set to deploy its first electric-powered drilling rig soon, but it will take years for technology to advance enough to electrify all of its oilfield equipment. Moving rigs and fracking equipment to the grid will ultimately curtail its carbon footprint further as the amount of fossil fuels powering the grid declines in coming years.

Meanwhile, investors have peppered the company’s executive with questions about its ESG efforts, Mr Sheffield noted in an interview this week.

“On a fifty-minute phone call with an investor, they probably spent 10 minutes of that phone call on ESG questions,” he said.

Investors are still in the early days of defining what ESG means for American shale companies, or nearly everything else for that matter. But companies that can show that they are among the most thoughtful on environmental metrics can still attract capital in coming years, albeit at a higher cost than during the shale revolution, said Brian Singer, an analyst at Goldman Sachs.

The transition to cleaner energy will require the participation of old-school oil companies and up-and-coming energy firms alike, said Maynard Holt, chief executive of Houston investment bank Tudor, Pickering, Holt & Co.

Even the city of Houston, long known as the US oil-and-gas hub, is now reinventing itself to focus on other segments of the energy sector as well, he added.

“It’s going to surprise everyone how old dogs might learn new tricks,” Mr Holt said.

Extracted in full from: https://www.theaustralian.com.au/business/the-wall-street-journal/houstons-big-oil-conference-goes-green-as-energy-transition-accelerates/news-story/0d252f45192de3cd5021dd767a40fdce