Energy Secretary Chris Wright told Goldman Sachs MD Neil Mehta that the world must accept its continued reliance on oil, gas, and coal. Wright said significant investments in electricity have driven prices higher, and that despite trillions spent on solar, it accounts for only 1.2% of global energy. Wright was interviewed at the Goldman Sachs Energy, CleanTech & Utilities Conference in Miami on Wednesday. (Video courtesy: Goldman Sachs Energy Conference)

ENERGY SECRETARY CHRIS WRIGHT: One of the things you never hear about is total primary energy consumption in the United States is now over 72% comes from two energy sources, oil and natural gas, record high market share, in addition to volumes. It doesn’t quite sound like the dying industry I’ve been hearing about for the last 15 years. But if you roll over to the electricity sector, it’s a very different story. In the oil and gas production segment, declining capital intensity, increasing efficiency, surging production. What’s happening in the electricity sector? Surging investments, gigantic amount of monies are flowing in. And what’s been the net result of that? Almost no growth at all in the production of electricity, but significant growth in the price of electricity. If you make electricity more expensive and people don’t know where that policy is going to go, guess what? Energy intensive industry leaves your country. The United Kingdom and Germany are experts at that. And they can tell you. In Germany, they’ve invested a half a trillion dollars, more than doubled the capacity of their electricity grid, and they produce 20% less electricity than they did before the half trillion dollar investment. And they sell it at three times the price. Like that is not a winning model. That is not what the world is going to duplicate. We have just gotten so far off track. Think of our industry, smart, detailed analyzing, physics, numbers, math. But when it comes to climate change, we just check rationality at the door. Forget it. That doesn’t apply over here. It’s only about decarbonizing and claiming we’re in the middle of an energy transition. That’s just, I think we are in the midst of the greatest malinvestment in human history. Ten trillion dollars on a global base has been invested nominally in fighting climate change. What do you get for ten trillion dollars? Well, to be very specific on energy sources, we got solar up to 1.2% of global energy, and wind at 1.4%. Collectively, 2.6% of global energy comes from these sources that ten trillion dollars of investment has gone into, and everywhere the penetration level is high, prices have gone up, and you’ve, as I said, de-industrialized Germany, the United Kingdom, California, and you just move industry. That doesn’t reduce emissions. If you make it so that the factory closes in the Midlands of England, and it moves to Asia, and it runs on coal now instead of natural gas, and you load the goods on diesel ships, that’s not fighting climate change. That’s de-industrializing your nation and having a government pounding the drum on decarbonization, but never doing the math on is it working. A couple other data points. 85% of global energy came from hydrocarbons at the time of the Yom Kippur War. Woke the world up. Oh my God, oil prices tripled. They rose again later that decade. We got to change our energy system. That’s when the energy transition movement started over 50 years ago. 85% from hydrocarbons, today, 85% hydrocarbons. Let’s just engage with reality. Oil, gas, and coal are what run the world. Full stop. We can’t make a wind turbine, or a solar pan, or a nuclear power plant without massive amounts of oil, gas, and coal. That’s how the world works.

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