The Growing Demand For Affordable, Secure, Resilient, And Low-Carbon Energy

Forbes

28-04-2025

Last week I attended Semafor's 'World Economy Summit 2025' held on April 23-25. I learned about this event from Andrew Edgecliffe-Johnson who joined Semafor late last year as their CEO editor and author of the CEO Signal newsletter after spending 20 years at the Financial Times, mostly recently as U.S. News Editor. Semafor is a fascinating new publication started less than three years ago, and you can subscribe to for free. They put on a three-day conference that is the best one I've ever attended. You can see why by checking the agenda to see what an incredible and wide-ranging list of people (e.g., from Steve Bannon to Senator Chuck Schumer) who were interviewed by a super cast of reporters from Semafor and many other publications. Videos of all of the sessions are available on this link.
On the morning of the first day I attended the 'Reimagining Global Energy' session which included interviews with a number of energy and utility CEOs and the Vice Chairman of Chevron. This session was fascinating both for what was discussed and what was not. In terms of the latter, words that were never uttered include climate change, net zero, Paris Agreement, 1.5C°, 2050 scenarios, climate transition plans, reporting (Scope 1, 2, and 3), divestment, and stranded assets. The overarching narrative was one of aa strong and growing demand for energy that was creating opportunities and challenges. It was not one about the dire consequences of climate change.
Based on this climate activists might conclude that it was a gathering of energy and utility executives who are either climate change deniers or fighting the energy transition with all their might. I did not get this sense from the discussion. Although there was no explicit discussion about the consequences of climate change, moving towards a lower carbon world was seen by all as important. That said, these executives had different views from climate activists on how fast this can happen, how to get there, and how much of a priority this should be vis a vis other energy attributes like affordability, security, and resilience. The general sense was an 'all of the above' approach to energy resources including fossil fuels, renewables, biofuels, hydrogen, nuclear, and geothermal. The conversations I listened to can be summarized into five main themes: (1) Growth in Energy Demand, (2) The Need for Balance, (3) Infrastructure and Permitting, (4) the Electrical Grid, and (5) Artificial Intelligence.
The session began with the 'Partner Interview: View from Chevron' between Chevron's Vice Chairman Mark Nelson and Justin Smith, the Co-Founder and CEO of Semafor. Nelson observed that energy demand would grow due a population increasing from 8 to 10 billion (a figure also cited by Mike Henry, the CEO of mining company BHP in the session 'Meeting the Demand for Critical Minerals' with Tim McDonnell, Climate and energy editor at Semafor), the need to eliminate energy poverty (two billion people prepare their meals over stoves using unhealthy materials like biomass and 750 million people still lack access to electricity), and the energy demands to serve data centers for artificial intelligence (AI) applications. In his interview 'Fueling Market Dynamics' with Charlie Gasparino, Senior Correspondent FOX Business Network, Domenic Dell' Osso, Jr., President and CEO of natural gas company Expand Energy stated that AI and cryptocurrency would increase the daily demand for natural gas of 105 billion cubic feet (BcF) by five billion BcF. But he also noted that the export growth potential for natural gas was three times that.
Another major factor driving the growth in energy demand is electrification of the grid. In 'Turn on the Bright Lights: Building a Resilient Grid' Tim Cawley, the CEO of utility company Consolidated Edison which serves New York City, also cited AI but for his customer base even more important was the growing use of heat pumps, electric vehicle charging, and that new buildings needed to be powered by electricity.
All of the above speakers, as well as Calvin Butler, President and CEO of utility company Exelon, in his interview 'The Path Toward Energy Security' with Vijay Vaitheeswaran Global Energy & Climate Innovation Editor, The Economist, spoke of the need to decarbonize and how this could be done through renewables, biofuels, hydrogen, nuclear, geothermal, greater energy efficiency, and technologies such as carbon capture storage and utilization. But in striking contrast to climate activists, he and the other executives did not make reducing carbon emissions the top priority although they all noted its importance. For example, Dell' Osso mentioned his company's commitment to carbon neutrality and how is product of dry gas can be produced in a very low carbon way. Nelson talked about the multiple objectives of ending energy poverty, contributing to economic prosperity, ensuring energy security, and protecting the environment. He also mentioned that Chevron is the Number 2 producer of biofuels and has a fund for investing in new low carbon technologies. Noting the ambitious climate goals set by New York State, Cawley said that climate, resiliency, security, and affordability were all important. Cawley also admitted that New York State's goal to have renewable energy go from for 30% to 70% by 2030 was unrealistic.
The need for more infrastructure in terms of mining for critical minerals (Henry noted there have only been three or four new copper mines in the U.S. in the last 25 years), natural gas pipelines (Dell' Osso), transmission lines (Butler), and substations (Cawley) was a major theme. Tied to that was the need to reduce the burden of the permitting process. Vaitheeswaran joked that constraints on permitting have created a banana (Build Absolutely Nothing Anywhere Near Anybody). Delays in permitting were making projects uneconomical and preventing getting the critical minerals from secure sources (e.g., not China) necessary for renewable energy, batteries, building out the grid, and electrification. Speeding up the permitting process, while still adhering to good environmental standards, was considered to be an issue that could obtain broad bipartisan support.
I have written about the International Institute of Finance's challenge to the 'finance-centric theory of change (FCTC).' It remains the dominant narrative, as reflected in the words I noted were missing in the sessions I attended, although it is losing its authority and being replaced, albeit on a piecemeal basis, with work being done in the Ecoright. One thing notably missing in the FCTC is any robust discussion of the grid other than the call it must be fed by renewable energy. Cawley stated that 'Utilities are at the center of the energy transition.' In order to ensure a safe, reliable, resilient, and affordable grid, Butler pointed out that investor owned utilities will invest $200 billion this year and Exelon will be investing $38 billion over the next four years. Utility companies are all regulated, and investments must be approved by the regulator. This requires consultation with all their stakeholders. Affordability to their customers is paramount. Butler also noted that people aren't interested in clean energy if they can't afford it. Ensuring there is sufficient grid capacity and stability in order to accommodate the energy demands of hyper- data centers and feeding in new renewable energy resources requires careful planning and intelligent capital allocation.
This planning and many other aspects of managing the grid are aided by AI. Nelson noted the two sides of AI—it both demands a significant amount of energy, but it can contribute to the energy challenge in many ways. He cited examples regarding oil and gas exploration at Chevron. Henry noted the same thing for finding new copper reserves, as happened in Australia, and improving yields of existing copper reserves. He pointed out that copper supply is going to have to grow by 70% over the next 25 years and that it is getting harder to find and get out of the ground. AI came up in virtually every discussion and the enthusiasm for its potential was palpable, with the executives feeling that we've only scratched the surface on this technology.
I am well aware that climate activists would find much to challenge and disagree with in the comments made by these CEOs. Having a healthy debate is important for getting to long-term, bipartisan solutions for meeting the growing demand for energy while also addressing climate change. This is something desired by all of these executives and it was noted several times how unhelpful it is when policies swing dramatically with changes in administration from one party to the other.
But this debate can't be had and these bipartisan policies achieved if the climate activists simply discount the views on ideological grounds of these and their peer CEOs. The reality is that oil and gas companies, mining companies, and electric utility companies all have an essential role to play in ensuring secure, resilient, and affordable energy which is as low in carbon as possible given current economics, technologies, and policies. Being adversarial and combative may play to one's crowd, but in the end, it is simply performative and will not make a substantial contribution to addressing climate change. Hard as it may be for some people, it is important to recognize that decarbonization must be done in the broader context of addressing energy poverty, growing energy demand, and ensuring energy resilience, security, and affordability.