By Peter Duncan
CEO & Founder, MicroSeismic, Inc.
Earlier this month, I was privileged to attend Daniel Yergin’s annual gathering of the world’s energy leaders here at home in Houston, Texas, CERAWeek 2014. CEO’s, Energy Ministers, bankers, lawyers, policy makers, pundits and a few techies like me get together once a year at this first class event to network and to listen to lectures and panel discussions around the state of the world in general and the energy business in particular by people who really do know about the subject. It’s a heady, instructive, insightful and often entertaining event.
The situation in the Ukraine was on everyone’s mind this year and several panels were gathered to help us understand the history and possible future of what is happening there. No simple solutions were offered.
The economics of the oil business are always a subject of interest at this conference and, as usual, provided a platform for many different points of view. Senior executives of North American focused unconventional oil and gas producers bragged that they were reducing drilling times and the costs of shale production, while multi-national major CEO’s complained of rising costs against a stable oil price killing their margins, a situation that called for service companies to cut back on costs at once. There seemed a contradiction there.
Keynote addresses by the likes of John Watson, Chairman and CEO of Chevron and Andrew Mackenzie, CEO of BHP Billiton provided a rousing affirmation of the change in the balance of economic power that shale gale has brought about to the immense advantage of the US and Canada. Speaker after speaker confirmed that these shale resources are real though not without challenges, some technical and some political. Calls for the US to accelerate the approval of LNG export facilities and to end the ban on exporting crude came from politicians and producers while industry leaders like Joe Kaeser, Chairman of Siemens spoke in terms of their increased investment in facilities in the USA to take advantage of cheap energy and plentiful hydrocarbon feedstock.
A humorous counterpoint came from Harald Schwager, an Executive Director of BASF. He told us that a defining difference between the US and Europe is that here we look for energy prices to be low in order to promote jobs, while in Europe they want energy to be expensive to promote conservation. He then commented on the efficiency of Germany, suggesting that with the closing of its nuclear power plants and the banning of unconventional drilling and frac’ing, the country is efficiently marching in “the wrong direction”.
The conference ended with a candid interview with Ben Bernanke, recently retired Chairman of the Fed and arguably the savior of the world economy through the banking crises of 2008 and 2009. His front row seat account of that adventure was fascinating and I believe we were lucky to have him sitting in that seat at that moment. He seemed mildly optimistic that the financial crises are largely behind us for now, although he certainly encouraged ongoing caution and care.
At MicroSeismic, our purpose is to help our customers produce clean, abundant energy through better frac’ing. I heard mention of this as a wider energy industry goal so many times throughout the week, that although I left the conference with a bit of information overload, I was sure of one thing: our daily work here at MicroSeismic is truly helping to advance the industry and meet the needs of all the different stakeholders – something I’m extremely proud of.