Artemis Energy Partners CEO Bobby Tudor currently serves as Chairman of the Houston Energy Transition Initiative, a consortium of Houston’s leading energy companies working to shape the region’s energy strategy for the decades to come. Tudor was the keynote speaker of Womble Bond Dickinson’s “Navigating the Complexities of Energy Transition: Balancing Energy Security with Net Zero Goals.” This article is based on that presentation.
No doubt, the energy sector is at a point of transition, as governments and private businesses alike are pushing for carbon neutrality by 2050 and a greater shift toward green, renewable energy. The share of renewables is expected to more than double to 31 percent of global energy consumption by 2050, compared to 15 percent today.
Such a transition could lead to tremendous upheaval in the traditional energy sector. This could spell trouble for Houston if no actions are taken to respond to the changing energy landscape. Houston, a global nexus for the energy sector, currently has more than 1.1 million jobs in or closely connected to the energy sector. That is 40 percent of all jobs in the region.
But that number could drop to below 500,000 by 2050—and total GDP losses could amount to between $35 billion to $85 billion—as global energy demand gradually shifts from traditional to renewable sources and improved technology means fewer people are required to produce the same amount of oil and gas. This drop is potentially compounded by the loss of high-paying hydrocarbon energy jobs which pay, on average, a wage 36 percent higher than the national median wage.
Again, however—this worst-case scenario only happens if Houston doesn’t take action. And that action already is underway, Tudor said.
“Our Houston companies are right in the middle of this. With decisive action to lead in the energy transition, Houston could gain 600,000 additional jobs,” he said. The corresponding GDP gains could amount to $70 billion to $160 billion.
“Our Houston companies are right in the middle of this. With decisive action to lead in the energy transition, Houston could gain 600,000 additional jobs.”
- BOBBY TUDOR, ARTEMIS ENERGY PARTNERS CEO AND CHAIRMAN OF THE HOUSTON ENERGY TRANSITION INITIATIVE
One key factor Houston has working in its favor is its massive, experienced talent pool. The market is full of energy sector leaders and talented professionals who can design and implement a successful energy transition plan. For example, Tudor said Houston is home to more Ph.D. chemists per capita than any other major city in the world.
Many of these leaders and professionals have joined together to form the Houston Energy Transition Initiative (HETI).
“I grew up in the oil and gas business and I love it—it’s one of the great industrialization success stories,” Tudor said. “But it was clear to me that the energy industry was changing and changing rapidly, and that has large implications for us here in Houston.” The market is home to 25 Fortune 500 companies—and 19 of those are in the traditional energy (fossil fuel) sector.
“I grew up in the oil and gas business and I love it—it’s one of the great industrialization success stories. But it was clear to me that the energy industry was changing and changing rapidly, and that has large implications for us here in Houston.”
- BOBBY TUDOR
HETI’s role is to help Houston manage that evolution and to that end, the organization has produced a strategic plan to guide the region’s energy sector through the changes that the next three decades promise to bring.
The HETI plans call for action in three key areas:
- Jumpstarting emerging sectors where Houston has a distinct advantage. These include CCUS, hydrogen, plastics (circular economy), and battery manufacturing/energy storage solutions.
- Attracting and supporting companies in established “new energy” industries, such as renewables (solar and wind), renewable natural gas, low-carbon LNG and biofuels.
- Deploying cross-cutting initiatives to attract and grow companies in all energy value chains. These efforts include energy efficiency, natural gas and oil, petrochemicals, carbon trading, electric/fuel cell vehicles, nature-based solutions, advanced materials, geothermal and others.
To execute this vision, Tudor said Houston, as a community, needs a collective effort from government, industry, philanthropy and academia. He said this effort should focus on seven core pillars:
- Bold innovation and cross-industry pilots to test and scale new technology in emerging sectors and industries.
- Attracting leading energy companies and startups across all energy value chains. The goal should be to create an optimal ecosystem for smaller companies to succeed.
- Branding and urban infrastructure to raise the profile of Houston as an attractive and sustainable urban destination (and deliver on that perception).
- Rapidly secure sufficient funding for the Energy Transition platform and all initiative needs. This also involves clearly defining funding and risk models.
- Cross-sector thought leadership; convening the right stakeholders to collectively push the thinking on energy transition.
- Talent reskilling, ensuring Houstonians are trained for in-demand skills need in new energy industries.
- Policy solutions in which Houston actively participates in policy debate and shapes policy to boost new industries.
The energy transition represents a chance for the traditional oil and gas sector to lead. In fact, Tudor said this transition cannot happen without leveraging the expertise, technology and resources already in Houston’s traditional energy sector. The dual challenge is to both drastically reduce CO2 emissions while providing a reliable, affordable supply of energy to consumers. Thankfully, Tudor said both goals are achievable.
“We have an opportunity—and a responsibility—to be a leader on this issue,” he said. “It’s an exciting time to be in Houston.”