BlackRock ready to fund fossil and renewable energy
Both fossil fuels and renewable power still require significant volumes of private capital as the world grapples with increasing energy demand from artificial intelligence development, BlackRock CEO Larry Fink said on Monday.
“Let's be clear, gas is going to play a major role in the United States for tens of years and maybe 50 plus years,” Fink said at the CERAWeek conference in Houston. “We have to think about power and energy in a pragmatic way.”
"Dispatchable" energy – which includes coal and natural gas – is essential to meeting the energy demands of power-hungry AI data centres, while developers are now less concerned about only using renewable power, he said.
Fink’s remarks followed a speech at the conference by Chris Wright, the new US energy secretary, who vowed to reverse former President Joe Biden’s climate policy and boost fossil fuel production nationally.
While maintaining his stance in supporting decarbonisation technologies and carbon capture projects, Fink said many clean energy technologies are “highly inflationary” at the moment due to high costs.
“Everyone talks about the opportunity with hydrogen – but is anybody willing to pay the cost?” he said. "We have to be working side by side in trying to find ways of reducing the cost of wind and solar and other energy sources”.
He also called for a permitting reform to reduce the regulatory burden of infrastructure projects, which he said can generate “low double-digit returns” that would draw a huge pool of long-term capital from pension funds, insurance companies and sovereign wealth funds.
He also cautioned that President Donald Trump's nationalistic and anti-immigration policies could cause labour shortages and inflation in the near term.
"I've even told members of the Trump team that we're going to run out of electricians as we build out AI data centres," he said.
BlackRock will announce a new AI-themed fund in the next few weeks, with 65% of the capital committed to domestic projects. For the remaining global investments, it will work with the US government to secure export permits for advanced technologies, Fink said.
At the end of the panel, Fink showed the host a bracelet adorned with a Trump-inspired catchphrase: “Make energy great again”.