CERAWEEK HIGHLIGHTS: Executives call for permitting reform, weigh rising US power demand

Breaking through permitting delays and building out all sources of electricity to meet the rapidly rising US power demand from data centers came into sharp focus at the CERAWeek by S&P Global conference on March 10 and 11.

Highlights of coverage by Platts, part of S&P Global Commodity Insights:

Permitting reform

Washington needs to find ways to streamline permitting and shorten timelines for building needed energy infrastructure, said Ryan Lance, chairman and CEO of ConocoPhillips.

"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."

AI as a catalyst

The prospect of the US losing ground in the global artificial intelligence race could prove a catalyst for Congress to pass legislation to streamline the process for building energy-related infrastructure, other panel speakers said.

"I think it's interesting that if there's one thing that might get us permitting reform, it's the fear of falling behind on AI," said Salim Samaha, global head of energy at BlackRock's Global Infrastructure Partners.

Tapping AI for oil

AI will be the next big way to improve productivity in the oil patch, said Murray Auchincloss, CEO of BP. AI tools allow the driller to design hundreds of well trajectories in days, whereas once 10 engineers and 10 contractors needed six months to design three options for a well, he said.

"So it's just a material step change in productivity," Auchincloss said. "And if you can do it in well design and high-pressure, high-temperature wells, you know, you can pretty much do it with anything," he said.

Next, BP plans to use AI to optimize its refineries, he said.

Role of renewables

Renewable energy is essential to meeting the 55% increase in US power demand expected in the next 20 years, said John Ketchum, CEO of NextEra Energy, the country's largest wind and solar company in the US as well as the most prominent utility as owner of Florida Power and Light.

"When you think about the demand that we have in the power sector, it's unlike anything we've seen in the past," Ketchum, chairman, president and CEO of NextEra, said March 10 at CERAWeek. "We are expecting a six-fold increase in power demand over the next 20 years compared to what we saw over the prior 20 years. And so over the next 20 years, about a 55% increase in power demand, and we're going to have to be really smart in terms of how we adapt our energy policy to meet that demand."

Data center impact

Meeting that rising power demand is achievable, said Constellation President and CEO Joseph Dominguez, who acknowledged the view was "a little bit upside down" compared to others in the industry.

While many in the industry are panicked by the combination of hyperscalers and load growth, an underlying consideration is that about 80% of the time, one-third of the generation capacity on the electric grid is sitting on the sidelines and not being operated, Dominguez said.

"Most of the time we don't use nearly all of its capacity," Dominguez said. "That means we could add data centers for most hours, and they're going to have a de minimis impact on the grid."

New nuclear prospects

Nuclear fusion is nearing commercial scale with the first facility supplying power to the PJM Interconnection in the early 2030s, said Bob Mumgaard, cofounder and CEO of Commonwealth Fusion Systems. The initial levelized energy cost would be $100-$150/MWh, "which is pretty good," he said.

"At the end of the day, fusion is a boiler, the same way that a nuclear power plant is a boiler or a coal plant is a boiler -- it's just a boiler that doesn't use gas," Mumgaard said.