World Oil
(WO) – As the Baker Hughes Annual Meeting entered its first full day in Florence, Italy, on Monday, the firm’s Chairman, President and CEO, Lorenzo Simonelli (Fig. 1), set out an agenda for what he calls “energizing change,” for both his company and the industry as a whole. “It all begins with people,” quipped Simonelli. “People first; people in this room, people around the energy industry.”
He continued, “how do we galvanize change? Moving from navigating to energizing change.” Simonelli proceeded to talk about his participation in the annual meeting of the World Economic Forum in Davos, Switzerland, earlier this month. At that event, he said, were the results of the “Trust Barometer.” It showed, said Simonelli, “that businesses are the most trusted for driving change and innovation. We, in this room, and around the industry, are the most trusted to drive change.”
Balancing hydrocarbons with climate realities. Over the course of the last 12 months, “we’ve navigated several events,” added Simonelli. “You’ve seen at COP 28, the results showing that decarbonization has to take place. Showing that hydrocarbons have a role to play over the course of the next decades. But, at the same time, we need a just and fair transition globally. And how do we do that? With technology and pledges that have been made. 2023 was the highest year on record for the climate. And then, you can see here today in Florence, we’re all happy and sunny, but it’s abnormally sunny. Climate change is happening.”
He then spoke to technology today, including A.I., and how it’s going to be utilized and how it might impact the energy sector, as well as people’s daily lives. “And the continued new landscape of energy, where one looks at CCUS, geothermal and hydrogen; the evolving energy mix of the future that continues to occur.”
Three hard truths. Simonelli went on to describe a constant piece of operational philosophy at his firm. “At Baker Hughes, we’ve held three hard truths for some years. Those continue to be foundational to the energy transition. The first is that we need to scale technology that’s available today, to reduce and abate emissions. We need to move faster with the technologies that are capable of having an impact today. Secondly, there is no world without the use of hydrocarbons over the next few decades. It’s not about the fuel source, it’s about the emissions. Gas is both a transition and a destination fuel. And it’s important that we continue to advocate for the displacement of coal, as we move towards a cleaner energy system. And the third truth is that this requires all of us together.”
Making progress to 2030. With all that said, Simonelli it’s clear that by 2030, “we’re going to need to decarbonize. Projects will need to have decarbonization as a theme. It is not about 2050, it is about the next decade, and what we do between now and 2030. It is very much about a sustainable energy development for this decade. What does sustainable energy development mean? [It means] growth that meets our needs without compromising the ability of future generations to meet theirs. Providing the energy we need today and allowing that energy to be there for future generations.”
Mature assets. On some other, related subjects, he mentioned improving efficiencies of existing operations in the field, using mature asset solutions. This need, he said, could be met with a variety of existing technologies that Baker Hughes has to offer.
The role of gas. In addition, noting his firm’s “second truth” about the world still needing hydrocarbons, Simonelli said, “gas plays a big role. In fact, gas is as much a destination as a transition fuel. And it continues to be a big factor for many nations. And I’m pleased to announce today the largest single equipment order for Baker Hughes in the Kingdom of Saudi Arabia, to support them in [their] gas system. The development of gas in the Kingdom is continuing to score lower, cleaner emissions energy.“
A rebuke to Biden policy. Simonelli also had some carefully chose words about a recent Biden administration energy move. “Now, some of you may have seen the announcement a few days ago within the United States, placing a pause on the granting of licenses for exports of LNG,” observed the chairman. “We don’t agree with that. We think that gas is central to the energy mix going forward. And we think it’s vital to continue to promote and support gas and LNG as a displacement to coal in the future.”
It should be noted that early in his remarks, Simonelli noted that this year’s Baker Hughes annual meeting is the largest one that the company has held, in terms of not only its own employees attending, but also invited guests and media being present.
