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Environmental Edge
March 14, 2023

CERAWeek 2023: U.S. Energy Secretary on Energy Transition Investments, Oil and Gas Production, and Energy Security

Environmental Edge: Climate Change & Regulatory Insights

CERAWeek — the annual gathering of chief executives, policymakers, investors, and other global energy leaders — recently concluded in Houston. For the second consecutive year, U.S. Secretary of Energy Jennifer Granholm delivered CERAWeek’s keynote address, discussing the Biden Administration’s energy policies and priorities:

  • Diversifying the Energy Mix. Acknowledging that oil and gas will be part of the energy mix “for years to come,” Secretary Granholm called for a “managed transition” to balance today’s demand while growing more diverse sources of energy for tomorrow.
  • U.S. Will Lead the Energy Transition. Secretary Granholm detailed new funding and projects from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. She stated that the billions of dollars made available through these laws for direct competitive funding, investment and production tax credits, and loan guarantees for made-in-America large-scale deployment make the U.S. “irresistible” for new energy and decarbonization technologies.
  • Pathways to Commercial Liftoff. Secretary Granholm announced a “soft-launch” of the Biden Administration’s "Pathways to Commercial Liftoff” reports that will be released the week of March 13, 2023. This initiative will focus on engaging business to bring four key technologies to commercial liftoff: clean hydrogen, advanced nuclear, carbon management, and long-term storage.
  • $6 Billion for Industrial Decarbonization. Secretary Granholm also announced $6 billion in grants to fund industrial decarbonization. She noted that the grants will not be narrowly prescribed and will focus on funding projects we can learn from, scale, and export.
  • Private Sector’s Role in Energy Transition. Secretary Granholm said that energy transition investments are “private sector-led, government-enabled.” She observed that those in oil and gas have the skillsets and knowledge to build critical technologies in new energies at scale, noting connections between offshore drilling and offshore wind, fracking and geothermal, and natural gas transport and clean hydrogen. She expects that the leaders in traditional energy will be the leaders in new energy.
  • Challenges Ahead. Secretary Granholm cautioned that we have not “vanquished the volatility” in energy markets and face risks of national and economic security and increasing costs of climate change. She called for collaboration in the face of these challenges.
  • The Production Challenge. Secretary Granholm said she was pleased to see oil and gas production at record levels and noted that the production increase stabilized the world.
  • International Counterparts. Secretary Granholm described a new level of “focus” on energy security from her international counterparts, evidenced by a desire to import from a variety of sources and not rely on countries who will “weaponize energy.”
  • LNG. Secretary Granholm noted that Europe is grateful for U.S. LNG exporters, and that European nations are accelerating their own offshore LNG terminals. She noted that European countries recognize that U.S. LNG is cleaner and that they can count on the U.S. to supply it.
  • Energy-Related Supply Chain. Secretary Granholm highlighted improvements in the energy-related supply chain, observing that 111 companies that make batteries or their components have announced that they are opening in the U.S. She sees opportunity here.
  • Permitting. Harkening back to last year’s discussion, Secretary Granholm expressed disappointment that Senator Manchin’s bill on permitting did not pass, but stated that she was hopeful Congress would come forward with a permitting bill. She also said that the Department of Energy would be using its present authority to free up permitting for electricity transmission on public lands.

Arnold & Porter regularly advises companies on the Biden Administration’s regulations and priorities that impact the energy, manufacturing, automotive, and other industries, and helps companies bring market-leading energy projects to life. If you have questions about these topics, please reach out to the authors or your trusted Arnold & Porter advisor.