eavesdropping in houston

Overheard: Houston energy experts share how tech and startups are affecting the industry

How is technology affecting the energy sector? These experts weigh in. Getty Images

Last week, Houston-based Pink Petro hosted its annual conference — but, quite like other events across the country, it took a very digital approach.

Energy 2.0, formerly called HerWorld, was always going to be streamed from two locations — Denver and Houston — but the conference, which took place from March 9 to 11, likely had more digital attendees than previous years thanks to the rising threat of COVID19, or the coronavirus.

The digital shift was pretty on par with the conversation of the "unconference," as its called. The last panel of March 10 was how tech was rattling the energy industry. Three panelists discussed the effect of technology on the industry, climate change, startups, and more. Here are some of the panelists best points made during this event.

“Technology isn’t new to the energy sector. The energy sector is used to adopting and adapting to new technologies. What we are talking about now is digital technology, and what’s happening there — we are not familiar with that.”

Geeta Thakorlal, president at Worley Digital. It's not innovation that's unfamiliar to energy companies, but the digital aspect, which includes introducing new tech from outside the industry. "When you talk about adoption and use of digital technology, it means different things to different people," she adds.

"We’re taking a look at technology, but also addressing the people [aspect] — looking at what people are doing with technology and how the social issues are impacted by technology."

Jennifer Hohman, CIO and vice president, at Seadrill. The conversation started with a broad scope on how the energy industry is approaching technology, and Hohman cites climate change and sex trafficking — two issues the industry has been affecting.

“As society is changing, we start to worry about people’s safety — that’s very natural in our industry, but moving that into what about social issues or even renewables."

David Reid, CMO of National Oilwell Varco. Reid adds that the energy industry is aware of its role in the world and has a people-centric approach to technology, including being aware of how it affects the people involved in the energy company's supply chain. "I think it all ties together."

“Technology is constantly going to move fast — we have to continue to face that.”

Hohman says on the energy industry adapting to technology, adding that tech allows for more collaboration — something energy companies should be doing, even if it means collaborating with a competitor.

"What the tech sector has done is actually helped energy industry because they challenged all these norms — diversity of thought, fail and fail fast — you don't use that language in the energy sector."

Thakorlal says, explaining that influences from the tech sector have been crucial. Ultimately, big tech companies are looking to small startups for innovation, and energy companies will be doing more of that as well. "The tech companies have had to learn it's not they who has got the solutions, and the energy sector has learned that too."

“We’ve got a world that wants a change, and does not know and understand what we’ve done.”

Reid says on the topic of the energy industry's role in the future of the sector. "What's missing is the potential of our industry to make a difference."

“The biggest barrier to advancing technology is fear — people not really understanding. Fear is a choice.”

Thakorlal says, adding that fear is a choice companies can make — but shouldn't. Instead, they should maintain their business while simultaneously adopting tech that will be key in the future. "We say in our organization that if you talk about energy transition or digital transformation in our sector, it's not an 'either/or' it's an 'and.' We have to keep doing what we are doing and transition that to what we want the future to be."

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Building Houston

 
 

Irving-based ExxonMobil has announced the Houston Ship Channel will be the site of an "innovation zone" for carbon capture and storage. Photo via Business Wire

In a move that would be a gamechanger for Houston, oil and gas giant ExxonMobil envisions creating a $100 billion carbon-capture hub along the Houston Ship Channel.

ExxonMobil foresees the Houston Ship Channel being the site of an "innovation zone" for carbon capture and storage. In a blog post on the ExxonMobil website, Joe Blommaert, the Houston-based president of ExxonMobil Low Carbon Solutions, says Houston would be "the perfect place" for the project because:

  • The ship channel is home to dozens of refineries and petrochemical plants.
  • The geological formations in the Gulf of Mexico could "safely, securely, and permanently" store tons of carbon emissions under the sea floor, according to the blog post. The U.S. Department of Energy estimates the storage capacity along the U.S. Gulf Coast could handle 500 million metric tons of CO2.

Irving-based ExxonMobil, which employs more than 12,000 people in the Houston area, says the project could capture and store about 50 million metric tons of CO2 annually by 2030. By 2040, that number could rise to 100 million metric tons.

"We could create an economy of scale where we can reduce the cost of the carbon dioxide mitigation, create jobs, and reduce the emissions," Blommaert tells the Reuters news service.

In a news release, Houston Mayor Sylvester Turner applauds the ExxonMobil plan.

"This proposal by ExxonMobil is the type of bold ambition and investment we will need to meet our climate goals and protect our communities from climate change," Turner says. "ExxonMobil's proposal represents a significant step forward for the energy industry, and I hope it brings more companies to the table to help Houston lead a global energy transition."

Turner notes that the Houston area is home to some of the largest emitters of carbon in the U.S., adding that everyone has "a responsibility and role to play in decarbonization."

Blommaert says the project would require public and private funding, along with "enhanced regulatory and legal frameworks that enable investment and innovation." According to Politico, ExxonMobil wants the federal government to kick in tax breaks or to set carbon-pricing policies to help get the project off the ground.

Politico reports that the Biden administration isn't considering ExxonMobil's idea as it prepares a climate-change package.

"Meanwhile, environmental groups and many Democrats have slammed carbon-capture proposals as a climate strategy, saying the only way to permanently reduce greenhouse gas pollution is a wholesale switch away from fossil fuels," Politico says.

Meanwhile, the International Energy Agency maintains that carbon capture and storage "are critical for putting energy systems around the world on a sustainable path." Achieving net-zero goals "will be virtually impossible" without carbon capture and storage, the group says.

ExxonMobil announced creation of its Low Carbon Solutions business unit in February as part of its push to invest $3 billion in lower-emission energy initiatives through 2025. Low Carbon Solutions initially will focus on technology for carbon capture and storage. The business unit is exploring opportunities along the Gulf Coast, as well as in Wyoming, Belgium, the Netherlands, Qatar, Scotland, and Singapore.

Last year, ExxonMobil hit the pause button on a $260 million carbon-capture project in Wyoming due to fallout from the COVID-19 pandemic, according to the Bloomberg news service.

In a December report, the Global CCS Institute, a think tank, said 65 commercial carbon-capture projects were in various stages of development around the world.

"Climate ambition, including efforts to decarbonize industry, has not been curtailed despite the adversities faced in 2020," Brad Page, CEO of the institute, says in a news release about the report. "We're continuing to see an upward trajectory in the amount of CO2 capture and storage infrastructure that is being developed. One of the largest factors driving this growth is recognition that achieving net-zero emissions is urgent yet unattainable without CO2 reductions from energy-intensive sectors."

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