U.S.-based capital markets will fuel the private investment needed to grow the nation’s energy grid to build out an electrifying digital economy, BlackRock cofounder, Chair, and CEO Lawrence Fink told energy corporation leaders and innovators Monday.
President Donald Trump’s drive to dramatically scale back the nation’s federal workforce, however, could backfire by delaying approvals for projects and innovations financed by private sector investors, he said during the 43rd annual CERAWeek by S&P Global conference at the Americas Hilton-Houston.
“The only way we can navigate this” need to scale up the nation’s electrical capacity “is not by cutting, because cutting is going to destroy the economy,” Fink said.
“We must grow the economy,” he continued. “We have to encourage more and more private capital. And this is why, if we can reduce the timing of permits, reduce the regulatory [requirements], we have a little opportunity” in the next few years that could be squandered if key agencies are understaffed and in disarray.
Fink shared numerous insights during a 75-minute one-on-one interview with S&P Global Vice Chair Daniel Yergin during the opening day of the five-day CERAWeek conference, a premier annual gathering of energy leaders with more than 8,000 attendees, including at least 450 energy corporation CEOs and energy officials from more than 80 countries.
U.S. Energy Secretary Chris Wright delivered the keynote address Monday. Interior Secretary Doug Burgum, who was also at the conference, will speak Wednesday.
annual gross domestic product (GDP) to chip away at the nation’s $37 trillion deficit; that the U.S. faces a short-term worker shortage but, as artificial intelligence (AI) advances, long-term job “deflation”; and that preparing workers for retirement is “the great crisis of America that nobody wants to talk about.”
And no, he added, BlackRock “did not buy the Panama Canal,” referring to its March 4 $22.8 billion acquisition, with other investor groups, of 44 ports in 32 countries owned and operated by Hong Kong-based CK Hutchison.
“This is something we’ve been working on with the seller, Hutchinson” during “a very concentrated period of two weeks, really. They’ve been faced with a very poor stock price for some time. From our estimates, Hutchinson was trading at 30 percent and they decided, after much deliberation, to see what the market would take related to selling” dozens of ports, including six in the Suez Canal, Fink said.
BlackRock now owns or has majority interests in 100 ports, he said.
“Unfortunately,“ Fink said, ”the far left and the far right didn’t mention that we bought 44 ports. They mentioned we bought two.”
BlackRock, with more than $11.5 trillion in its investment portfolio, is the world’s largest asset manager, according to the U.S. Securities and Exchange Commission.
Fink was among co-founders who created the Manhattan-based firm “in a one-room office in 1988” that went public in 2000. “I did my 100th earnings call this last January,” he said.
As the acquisition of 44 Hutchinson ports indicates, he’s bullish on the global economy and remains staunchly “optimistic that U.S. exceptionalism will continue” into the foreseeable future.
“We have to think about power and energy in a pragmatic way,” he said, adding that while “we’re going to have to focus on decarbonization” until breakthrough technologies, including nuclear power, are commercially affordable, an “all of the above” energy policy is the key to growing the grid to meet growing demand.
“Everyone talks about the opportunity with hydrogen. Well, we can have green hydrogen and blue hydrogen, but is anybody willing to pay the cost?” Fink asked.
In speaking with “hyper-scalers” that need massive electrical loads, there’s been a shift from what they want to what they can get, he said.
“Four years ago, they would say, ‘If we’re building a data center, it must be renewable’ energy,” Fink said. “Two years ago, they said, ‘We prefer renewable,’ and today, they care about power.”
Biomass, or “vegetable power,” is among under-tapped power sources that are coming to the fore, he said. “There are many opportunities in working side-by-side to try to work this out. I talk about ‘practicalism’—it’s how to solve these problems in a holistic way.”
Fink said inflation and a labor shortage in key industries are quickly emerging as major issues.
“Over the course of the next six to nine months, we’re going to see embedded inflation” aggravated by the Trump administration’s “deportations and speed at which it is happening,” he said.
The administration’s immigration policies will have a “severe impact” on the nation’s agricultural and construction sectors, Fink said.
