Oil executives: Time for Houston to embrace clean energy

Houston’s position as the energy capital of the world is based on fossil fuels, but the nation’s fourth-largest city must embrace new technologies and cleaner energy if it wants to lead the way for decades to come, energy executives said Thursday at the first Houston Low-Carbon Energy Summit.

Executives from Royal Dutch Shell, BP, Houston’s Occidental Petroleum and others said Houston and local industry have the opportunity to drive the energy sector forward, not by abandoning oil and gas, but by embracing stricter environmental policies, emission-reduction technologies and other measures.

As increasingly diversified as the Houston economy has become, eleven out of Houston’s top dozen public companies by revenue are still in the energy sector. But too often, people in Houston energy are afraid to even publicly discuss the real existential crisis from climate change, said Jason Klein, Shell’s vice president for U.S. energy transition strategy.

That’s not how you attract young people and top talent to the industry, Klein said. That’s not how you evolve.

“If we don’t even want to talk about climate change, they’re not going to come here. They’re going to go to San Francisco,” Klein said at the summit, organized by the Center for Houston's Future. “As a community, we need to embrace the future and not be afraid of it.”

The reality is the world isn’t even close to being on track to meet the Paris climate agreement goal of keeping a global temperature rise below 2-degrees Celsius by 2100. In order to do so, Shell estimates global oil demand would need to peak as soon as 2025.

Opportunity knocks

Executives promoted ideas to slow climate change such as Houston turning more to electric or hydrogen-fueled buses and more public transportation as opposed to constantly building new highways. Industry and government could commit the research and dollars for carbon-capture projects along the Gulf Coast corridor of refineries, petrochemical plants and power plants to reduce greenhouse gas and other emissions.

“Houston has the opportunity to really shape what that world looks like (in 2050),” said Randolph Bell, director of the Atlantic Council think tank. “If it (the energy transition) takes a long time, Houston is going to be more exposed to sea-level rise and more extreme weather.”

Occidental Petroleum is investing in technologies for emission-free power plants and for a so-called direct air capture plant in the booming Permian Basin that would suck carbon dioxide out of the sky, allowing Oxy to inject the CO2 in the ground to help it pump more oil and gas from the earth.

“It’s going to take many, many technologies moving rapidly (to meet the Paris goals),” said Charlene Olivia Russell, Oxy’s vice president of low carbon strategies. “Everyone in our organization is looking at how do we reduce emissions in this process and that process.”

The United Kingdom’s BP was the first Big Oil company to try to go greener with its “Beyond Petroleum” campaign in the beginning of this century, but the effort failed. BP was inexperienced in wind power and the technology had yet to prove itself profitable. The 2010 Deepwater Horizon disaster in the Gulf of Mexico put to stop anything that was left of the branding effort.

Now, rather than try to build much more of its own renewable power, BP has focused on investing in startups developing clean energy technologies and reducing its greenhouse gas emissions.

Not there

While renewable power is quickly growing worldwide, it’s not feasible to abruptly shift everything to wind and solar energy, said Cindy Yeilding, BP America senior vice president. The aim is instead to embrace the Paris climate goals and support renewables while working to rapidly cut the emissions from oil, gas and refined fuels, she said.

“We really want to be producing energy from sunshine, rainbows and unicorns right now, but we’re not there,” she said. “We continue to focus on the here and now while we build our portfolio for the energy transition.”

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