For a week each year, a hotel in Houston, Texas becomes the center of the world of energy. Executives from around the globe as well as top government officials descend on the city for the annual IHS CERAWeek conference, which drew to a close last Friday.
The meeting was a chance for these leaders to grapple with a change few could have predicted at the same event a year earlier — oil prices dropping by more than half and industry layoffs which some estimates put at 75,000 jobs lost so far.
A call to action came from Sen. Lisa Murkowski (R-Alaska) on the first day of the conference. The new chair of the Senate’s Energy and Natural Resources Committee had strong words regarding one of the conditions of a proposed nuclear deal with Iran.
“We shouldn’t lift sanctions on Iranian oil while we are keeping sanctions on American oil,” Murkowski said, referring to a 40 year old ban on exporting American crude oil overseas. The ban, put in place during an oil shortage in the 70s, she feels is deeply outdated in today’s climate.
“It makes no sense,” she said.
Lifting the ban would give oil companies new markets for the crude oil stockpiling in this country. Murkowski said she will be introducing a bill to lift the ban this year. Her clarion call was echoed by many at the event, such as oil giants John Hess, CEO of Hess Corporation and Pioneer Natural Resources CEO Scott Sheffield.
One notable retort came from US Energy Secretary Ernest Moniz. The federal government’s Energy Information Administration ranks the US as the number one oil importer worldwide. Moniz implied while that is still the case, calls to lift the ban may be premature.
“I don’t think an overly compelling argument has been made on the basis of kind of pragmatic economics,” he said.
As big oil wants bans lifted and red tape cut, companies are also looking internally. Harold Hamm is the CEO of Continental Resources, the biggest operator in the Bakken formation of North Dakota and Montana. Hamm said he can focus on efficiencies in a downturn.
“You can only do that in times like this, with everybody running wide open like we were, you know, you couldn’t do it then,” he said, adding his company has cut costs up to 25 percent in the last four and a half months alone.
In between the cocktail parties and keynotes, bomb-sniffing dogs were led around the perimeter of the Hilton and police guarded hallways outside closed-door executive meetings; the trimmings that come with a gathering of billionaires.
Many of the attendees, though, were not there to broker enormous deals or craft game changing strategies. Engineer Katherine Leskin works with a top company, although she was reluctant to say which one.
“It hasn’t been passed through marketing,” she said, “so probably not.”
That company got her a day pass to the conference, and she was enjoying some of the event’s free drinks with college friends, standing near a display of posters showing which drilling regions are not producing the profits they were last year.
Despite falling oil prices and panels focused on coping with change, Leskin felt the core mood was still upbeat.
“Maybe people recognize that the oil and gas industry is cyclical and that there will be peaks and valleys,” she said.
That’s little comfort for the folks in the industry whose jobs are on the line. But for many who attended IHS CERAWeek, job security is probably not an immediate concern.