CERAWEEK: US energy sector faces permitting delays despite competitive advantages

The US has competitive advantages for development compared to other countries, but permitting delays remain a pain point for energy developers, ConocoPhillips Chairman and CEO Ryan Lance said March 11.

Combined-cycle gas-fired power generation is the only way to get dispatchable power to address the AI revolution, Lane said during CERAWeek by S&P Global energy conference in Houston. However, the system around energy development permitting needs to be addressed to make the necessary progress.

"We have to fix the system that we have here in the US," Lance said. "That's probably the biggest impediment to growing the energy system in the United States and it's not just in the oil and gas sector. ... It's high voltage direct current transmission lines, it's oil and gas infrastructure, it's roads, it bridges, it's ports, it's all those things."

The process can take five or 10 years, and in some cases 20 or 30 years, to get infrastructure built, he added.

"We've got to take that process and make it more streamline," Lane said. "There's a lot of activity going on within the House & the Senate right now to think about that, there's an executive order from the president trying to deal with that."

The permitting issue directly affected ConocoPhillips' Willow Project, which is estimated to produce 180,000 b/d at its peak. Project development started during the Obama administration, got permitted in the first Trump administration, faced rejection from the Biden administration, returned to the courts, and was ultimately finalized under Biden, Lane said as an example of a "no brainer" project that took about seven years to get developed.

Gas at forefront

Gas is imported in the US to accelerate more electricity, but there is a need for "all of the above," said Patrick Pouyanné, TotalEnergies chairman of the board and CEO.

"Yes, its gas. Yes, it might be nuclear. But it is also some renewables and battery, which are a way to produce the electricity that the US needs," Pouyanné said.

Years ago, TotalEnergies said it was not investing in the US, but that approach has changed.

"We choose the US because two fundamentals," Pouyanné said about cheap gas and space, in addition to less regulations.

To build a 1-GW solar plant in Texas took TotalEnergies 18 months, which is a big advantage compared to projects in other countries, he added.

US advantages

"We have four competitive advantages as the United States," Lance said about energy security, food security, military might and AI advantage. "To preserve all of that energy plays right at the forefront of all of those. And I think the AI revolution is coming. We can talk about it however we want. It's going to be big and it's going to take a lot of power and the only way you can get dispatchable power to do that is through combined-cycle gas-fired power generation."

The peak capacity in Texas is the same as the peak capacity of New York and California combined, he added.

"In the state of Texas, we have to build the equivalent of the California electrical system by 2030, and that's just here in Texas ... and gas is going to be right at the forefront of driving that power demand," Lance said.