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Headquarters in EaDo is looking for two worthy startups to donate coworking space to. Photo courtesy of Headquarters

A Houston-based commercial real estate company in the historic East Downtown District, is giving away free space to two startups who have been negatively impacted by the COVID-19 crisis.

The Headquarters is currently accepting submissions from startups, founders, and entrepreneurs to be considered for free office space through Friday, October 2, with recipients set to be announced the week of October 5th.

Founded in 2014 by brother and sister duo, Peter and Devin Licata, Headquarters provides flexible office space and suites to startups and young businesses in a variety of industries. Inspired by creative office spaces in Denver and coworking sites to create a completely new way to work.

Devin and Peter Licata founded Headquarters six years ago. Photo courtesy of Headquarters

"For Devin and I being local Houstonians," says Peter. "It was very exciting to bring a product to Houston that we had never seen before in the city. When we started the search for a building, we had a very specific idea of how we wanted it to look and feel, and the amenities we wanted to provide."

The building located on 3302 Canal St, was repurposed from an old warehouse built in the mid 20th century. The Licatas spent about eight months designing the building, which had sat vacant for seven years. The design features, evoke a feeling of a corporate campus but for small business which works perfectly for COVID-19 social distancing measures.

"One of the things we wanted was really wide hallways," says Devin. "Typical hallways here are about seven feet, when we were working with our architect we said, double it. The specific visuals are there to invoke a feeling, with an interior courtyard, and lots of natural light.

"Our architects weren't used to working with clients in commercial real estate who were designing based on an office where we would want to work, instead of a client who wanted to maximize every square footage."

The coworking space is adhering to social distancing recommendations. Photo courtesy of Headquarters

The wide open spaces, with hallways over 13 feet wide, high ceilings about 18 feet tall, and HVAC unit that does not recirculate air, along with the office suites that are on average 2 to 3 times larger than other coworking spaces allows all of their tenants to practice social distancing in a safe environment.

Headquarters is monitoring infection rates locally, while following safety guidelines to operate their facility safely. All guests are required to answer health screening questions upon entry and wear face coverings. They continue to clean all common areas and high touch surfaces with EPA-approved products and provide hand sanitizer at all points of entry.

With 35,000 square feet in total and 45 office suites, the Licatas say they chose the East End as their headquarters because of its close proximity to downtown and renewing growth of the community.

"The East End was an obvious location for us, we had been looking for buildings in the area for other development opportunities," says Devin. "Given it's proximity to downtown and its access to three different freeways, from a commuter standpoint it was really important as well as the community aspect."

Headquarters is located just east of downtown Houston. Photo courtesy of Headquarters

SheSpace is planning to open in a new mixed-use facility just south of Interstate 10 near downtown. Image via shespacehtx.com

For women by women: New coworking space to open in Houston

new to hou

To Stephanie Tsuru, there is strength in numbers — especially, when women are involved.

"Women coming together is powerful," explains Tsuru, the founder of SheSpace, an all-women coworking space coming soon to The Heights that seeks to build a collective community of entrepreneurs and business professionals.

Mentorship and motivation were always part of Tsuru's purpose since the start of her career. Her background in healthcare and rehab gave her insight into how powerful mindset can be in a person's growth.

"I have always been involved and really driven by motivational psychology," she says.

Her affinity for mentorship continued as she went on to coach women in her own life. With her 35 years of life experience, Tsuru feels there is "no substitute for wisdom." Her passion for cultivating relationships and inspiring other women led her to want to create an environment where women could network and learn from mentors and peers.

"I really was passionate about leveraging mentoring on a big scale," she says.

From idea to innovation

SheSpace is run by Stephanie Tsuru and her daughter-in-law Katie. Photo courtesy of SheSpace

After a trip to Israel, Tsuru met two best friends — an Israeli woman and Palestinian woman — who teamed up to help at a local women's center. After touring the space and witnessing the collaboration, she left inspired.

"I was so blown away by what was happening in the center," she muses, "I knew I had to have a space for women."

She partnered with her daughter-in-law, Katie, who has assumed the role of CFO. She compares their relationship to the "Old Masters and Young Geniuses" model, first written about by David Galenson. While Tsuru brings the "life experience and wisdom," her daughter-in-law is the young innovator.

"She just looks at the world a little bit fresher," she admits, "This is the perfect combination."

For women, by women

The space was designed and set up by female professionals. Image via shespacehtx.com

Browse through architectural renderings and you'll find a chic industrial space with pops of color at every turn. An energizing palette of green, pink, orange and yellow effervescently leap from the walls. The space is donned with graphic patterns and motivational virtues that preach collaboration and empowerment. Behind every piece of drywall and design is the work of a woman.

"I started enlisting the best and the brightest females I could find. Now there's a team of about 23 women that have all come together in their various domains to put this together," she explains. From the architect to the drywall company, the soon-to-open space is entirely built by women-led companies.

Finding women in some industries was no easy feat for Tsuru, who was committed to her mission of empowering and collaborating with women for SheSpace's production. From the IT networking to the construction manager, every external and internal working of the company is female.

"I set out doing this not having any idea how hard it is to find women in some of these areas," she explains, "We are so proud to say that it's all women."

Intentionality in design

SheSpace will have a cafe for refueling. Image via shespacehtx.com

Female intentionality doesn't mean an all-pink space—it's designs focused on women to help excel their productivity. From a lactation room to the artwork, women are at the center of the design.

According to the Office on Women's Health, no employer is required to have a lactation room, which is an issue that can plague working moms. From bathrooms to storage closets, women in some companies have had to be creative while the workforce catches up to design needs.

SheSpace created a lactation room, designed with a lock for privacy and individual, portable fridges available for nursing women to store breast milk.

"It's the prettiest room, it's beautiful, calming it's very serene. Women can go in there and just kind of catch their breath and use their breast pump," says Tsuru.

Personal and professional branding has become a central role in business ownership. The influencer space is 77 percent women, and continues to grow with the emergence of platforms like TikTok. SheSpace is equipped with a professional podcast recording room as well as an influencer nook.

The space also exhibits the talents of women by incorporating an book niche featuring all-female authors as well as a "SheShop," a pop-up shop where female-business owners can showcase and sell their products.

The power of female collaboration

SheSpace will have several rooms for different purposes — meetings, podcasting, privacy, etc. Image via shespacehtx.com

Coworking spaces have been on the rise in Houston over the last several years. From popular global brands like WeWork to small startups, the trend has consistently been on the rise.

Rather than compete with to co-ed spaces, Tsuru has kept women in mind from the beginning. "Women tend to dream smaller than men. While we strenuously support small businesses, the trend we see is women often do not aim high enough. When networking with women in positions of power we see a measurable shift in goals," she explains.

The comradery of women working alongside each other is a huge asset in Tsuru's eyes.

"Women understand women. There is an implicit understanding that already exists that you don't have to explain," she explains, noting that shared experienced bring women together.

There's also an understanding that women can be themselves without having to face the judgment of their male peers.

"It's also a comfort level that women can be themselves, that they can act [like] themselves. They don't have to talk a certain way. They don't have to sit a certain way. They find their voice when they're surrounded by women," shares Tsuru.

Tapping into collaboration, Tsuru is most excited for the educational workshops and networking opportunities that will come to the space. From public speaking to organizing finances, the space has an agenda planned for its upcoming launch.

"It's all about building confidence and you're in a nice supported environment. It's the perfect place to do that," explains Tsuru. "With that comes everything else, the networking and the flow of ideas...it's a huge resource center. No matter who you're looking for, we have a resource directory," she continues.

Transitioning amid COVID-19

SheSpace will be opening in Lower Heights, a 24-acre mixed-use district. Image courtesy of Gulf Coast Commercial Group

One of the benefits of being built during a pandemic, is the ability to keep new social distancing rules and considerations in mind. While Tsuru and her team have been able to anticipate life in a COVID-19 world, they've adjusted the space to include features like a lock on the lactation room door and individualized amenities.

As SheSpace has transitioned, so are women going through the pandemic and other phases of their lives. "There are all these women that are now office-less. They couldn't afford the overhead of the big office and where were they going to go?" says Tsuru. Women who want a space outside of their home five days a week can also utilize the vibrant, collaborative space and make it their own.

Above all, Tsuru hopes the space can be an aid to the women of Houston. "We're just in a moment of interruption, just the entire nation. I do think this is going to be a big place of healing for women," she shares.

SheSpace will be located at 2799 Katy Freeway in the Lower Heights district. Follow SheSpace to stay updated on the details of its launch.

Houston-based Sesh Coworking has launched an online platform so that members can work alongside each other. Photo via seshcoworking.com

Houston coworking company launches online portal to connect members working from home

coworking from home

As the COVID-19 pandemic continued to enforce working from home and social distancing earlier this summer, a Houston coworking company knew they needed to find a way to reach professionals and entrepreneurs digitally.

Sesh Coworking launched its Inner Circle membership this week to be a one-stop shop for business, connection, support, and more for members. Last month, Meredith Wheeler and Maggie Segrich began working on the virtual space after discovering the need for this virtual space from their network.

"We talked to a lot of people," Wheeler tells InnovationMap. "We were constantly asking people, 'what do you need right now?' And the resounding answer was for community and connection."

While Sesh reopened its physical space in Montrose on June 1, not all members were comfortable — or even able — to return to Sesh in person. So, the idea was to bring Sesh's culture and mission to them by taking the company's existing member portal and upgrading it with features like video conferencing, chatrooms, and more.

"It's almost kind of like a new age version of AIM chat. You could see who's online and you can chat with them," Segrich says. "You can work alongside with people."

With these new tech capabilities, Sesh can continue some of its events — like coffee and coworking and other networking and social events — virtually. Segrich and Wheeler also say they will be able to create accountability groups since some members have said that this new way of working makes it hard to focus and get stuff done.

The platform will also enable educational and training-based events, and Sesh has already created a kind of catalogue for resources and materials that come out of these events so that all members can have access to that information, not just the ones that were able to log on for the event.

"With business right now, and Maggie and I are feeling this constantly, it's like everyday is a new pivot — a new turn, twist, or adaptation that we're having to create," Wheeler says. "Sometimes, you know what you need to do and you don't know how to do it, but you need to figure it out fast. So, hopefully by having these resources at the tips of their fingers, our members can make those turns quicker."

A major perk for Sesh and its founders is that, now that they have everything set up and launched, their reach expands much further than their Sesh Loft in Montrose.

"This is not just limited to Houston. This can go, and we hope it goes, nationwide. We've had folks from all over the country on our digital events," Wheeler says. "This could be the silver lining from everything that's happening in 2020 — that our authentic digital connection has a much farther way to travel."

The first 30 members of Sesh Inner Circle can get a monthly membership rate of just $5.99. After that, it's $14.99 a month to sign up. Existing members to the physical space have access to the virtual platform, and virtual members can access special rates on booking space in the Sesh Loft. The launch of Inner Circle has also corresponded with the expansion of Sesh's store of locally sourced products. The store is available at the Sesh Loft or online.

Connect online

Photo via seshcoworking.com

The member portal lets Sesh coworkers have a one-stop shop for virtual and in-person engagement.

Innovation leaders have worked hard to advance its innovation infrastructure, and Lawson Gow doesn't want to see COVID-19 hold Houston back. Photo courtesy of The Cannon

Houston's innovation ecosystem can't lose momentum amid COVID-19, entrepreneur says

HOUSTON INNOVATORS PODCAST EPISODE 28

If you would have asked Lawson Gow a few weeks ago how he was feeling about the coronavirus closing down all three of his company's coworking spaces, his answer would have been pretty bleak. But now, as The Cannon has turned its attention to creating crisis-focused programming and digital resources and support for startups, he has a much more optimistic outlook on the future of his company.

What he's worried about now is the city as a whole losing its traction in developing its innovation ecosystem. Pre-COVID-19, the city was on a path to a robust and developing environment for startups and technology. Now, the city's innovation leaders need to stick together to keep from backtracking.

"We've got more momentum than we've ever had before," Gow says on this week's episode of the Houston Innovators Podcast. "What keeps me up at night is trying to consider how we don't lose any of this momentum. We're in a good, exciting spot. It's not an option for us as a city to lose this momentum right now."

While Gow — who is the son of David Gow, owner of InnovationMap's parent company, Gow Media — is optimistic about Houston's future, he notes how there will be a significant shift in the city's developing innovation districts present themselves.

"What's interesting is if you read the academic literature on innovation districts, it talks about density, collisions, interactions, and an ecosystem of swirling hustle and bustle of people interacting with each other," Gow says. "It reads like a how-to manual for how to spread disease."

When it comes to the future of coworking, Gow observes that, after companies have downsized and even let go of some physical space they have, shareable spaces — with the proper precautions — might be even more in demand.

"I think coming out of this, there's going to be a real place in the world for coworking. It's not going away, and, in fact, it's going to be even more necessary than ever," he says. "There's going to need to be policies and procedures that are much more mindful of health and wellness and the spread of infection."

There's still a lot to be determined on how The Cannon will emerge from the shutdown and what sort of new methods of keeping members safe and healthy they will implement — but Gow says knows those days are coming.

"There's a resiliency to the human spirit — and also an insistence on living life uninterrupted," Gow says on the episode. "We will get back to normalcy. I think it'll be gradual."

Gow shares his thoughts on the pandemic, as well as his advice for struggling startups on the podcast. Listen to the full episode below — or wherever you get your podcasts — and subscribe for weekly episodes.


Fuse Workspace is the latest coworking concept for the west side of town. Photo courtesy of Fuse

Dallas coworking company to open its first location in Houston

new to hou

Dallas-based Fuse Workspace is gearing up to open the first of what could be several coworking spaces in the Houston area as various coworking providers ramp up their Bayou City presence.

Fuse will unveil its first Houston location March 2 at CityCentre, a 47-acre, mixed-use development on the former site of Town & Country Mall in the Memorial City district. The grand opening is set for April 30.

Included in the 29,000-square-foot Fuse space, at 12848 Queensbury Ln., will be Houston's first showroom for Varidesk, a Coppell-based provider of standing desks and other office equipment.

John Herring, brand manager and director of operations at Fuse, says Houston, Austin, and Dallas are the company's target markets. A Fuse space is scheduled to open in July in the Austin suburb of Bee Cave.

"We love Houston and see a great future for our brand here, with multiple locations," Herring tells InnovationMap. "We don't have definitive plans to announce yet, but we have several strategic locations in the area that on our list."

Fuse is a division of DPG Partners LLC, a developer, owner, and operator of coworking spaces in Texas, as well as Hilton and Marriott hotels in Texas and Arkansas.

Fuse Workspace is the latest coworking concept for the west side of town. Photo courtesy of Fuse

The Fuse location at CityCentre will feature about 23,000 square feet of Class A office space, along with about 6,000 square feet of outdoor space. Highlights include:

  • 90 private offices
  • Three specialty suites, including one already leased by Varidesk
  • Four terraces
  • Seven conference rooms, including a podcast studio
  • Event space accommodating up to 100 people

"Our goal is to create an outstanding experience in the office through décor, amenities, programming, conference space, and our concierge staff," Herring says.

Fuse is joining a number of coworking providers that have set up shop in and around Memorial City. For instance, Life Time Work, affiliated with a nearby Life Time Fitness gym, opened last year at City Centre. Memorial City also is home to The Cannon, a 120,000-square-foot coworking campus.

Commercial real estate services provider JLL predicts 30 percent of the U.S. office market will be "flexible" space, such as coworking setups, by 2030. That compares with less than 5 percent in early 2019.

In the Houston market, 1.9 percent of office space was considered "flexible" in early 2019, according to JLL, versus 2.8 percent in Austin and 1.7 percent in Dallas.

"Our research, and our conversations with corporate executives across the globe, indicate that flexible work is not just a passing trend — it's woven into the fabric of the future of work," Scott Homa, senior vice president and director of U.S. office research at JLL, said in a 2019 release. "Even though some markets are better positioned for rapid growth, this still leaves significant runway for expansion across all U.S. office markets."

An October 2019 report from Yardi Matrix, a provider of real estate data, shows the Houston market with 113 coworking spaces encompassing more than 2.2 million square feet. By comparison, Dallas-Fort Worth had 159 coworking spaces exceeding 3.5 million total square feet, and Austin had 47 spaces surpassing 1.2 million total square feet.

"The penetration of coworking is highest in markets with new-market economies and tight vacancy rates," the Yardi Matrix report states.

According to JLL, the office vacancy rate in the Houston market stood at 22.8 percent in the fourth quarter of 2019. But office occupancy is improving, according to a JLL report, as more than 1.85 million square feet of space was absorbed in the Houston market during the fourth quarter of 2019. For Houston, that marked a 20-year high for positive net absorption in a single quarter, the report states.
Sesh Coworking is committed to providing quality coworking space for women and by women. Photo courtesy of Sesh

First female-focused coworking space opens in Houston

Calling all women

For so long, women have been influenced on how to behave professionally at work and expected to leave home life at home. But two female entrepreneurs are flipping the switch on that way of thinking with their new coworking space.

"We as women show up in our work lives as a whole person. We don't compartmentalize and forget about all the other things happening in our lives," says Meredith Wheeler, co-founder and chief creative officer of Sesh Coworking. "We wanted a space that reflected that and embraced it."

Sesh officially opened its doors this week at its new 2,000-square-foot space in Montrose (1210 W Clay St #18). Wheeler co-founded the company with Maggie Segrich after hosting coffee and coworking meetups for women around Houston for over two years.

sesh Meredith Wheeler and Maggie Segrich founded Sesh Coworking after years of working from home and feeling the need for a community. Photo courtesy of Sesh

Segrich, who has been a jewelry designer based in New York then Houston, and Wheeler each have a story of working from home and feeling a lack of community. Through the coffee and coworking sessions, the duo realized they weren't alone.

"There has been, in the last four to five years, this rally cry for women to come together and to feel that sense of community, whether that's as mothers, runners, in a gym, entrepreneurs, artists, and makers," says Segrich. "So, for me, starting Sesh is kind of like giving women that space and opportunity to let their guard down, and feel like they can be their actual selves."

While Sesh is open to all, the structure and style of the space is different from other coworking offices. For Wheeler, that's by design. She remembers living in California and checking out a coworking space that had a "bro culture," and while she loved the idea of coworking, she didn't join that space. However, it planted a seed in her, she says.

"We come at the creation of this space and the running of this community from the female experience," Wheeler tells InnovationMap. "Most coworking spaces, when they are run only by men, it's natural that they are coming from their perspective and experience."

Last fall, Sesh hosted a pop-up coworking space in Downtown for nine days. They put on multiple events a day — from career focused to wellness — as a bit of a sample of what they planned for their permanent space. It was stressful and fast moving, but it showed the women what their potential membership wanted.

"Flexibility is kind of the name of the game right now," Wheeler says.

In their permanent space, Sesh plans to offer programming around business career and fitness and wellness, including daily kid-friendly hours.

The office space itself, which was designed by Blue Water Studio's Kimberly Phipps-Nichol, is rentable for events, and members can join and pay monthly or buy packs of day passes. The space features desks and couches, plus a full bathroom with a shower and lockers that are rentable. There is also a meeting room and wellness space that are able to be rented by members.

"We're re-writing the playbook on what your work experience should be," Wheeler says.

Setting up shop

Photo courtesy of Sesh

Coworkers can check in upon arrival and even purchase select items at the front desk.

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East Houston development launches smart city initiative with new hire

smart city

A 4,200-acre master-planned development that's rising on the east side of town has created a new role within their executive suite to drive innovation and a new smart city initiative.

Houston-based real estate developer, McCord, has hired Nick Cardwell as vice president of digital innovation. In the newly created role, Cardwell will be tasked with bringing data-driven solutions, digital transformation, and other smart city innovation to Generation Park.

"Sensor technology, machine learning, and big data capabilities have exploded in the last decade and are rapidly outpacing the built world," says Ryan McCord, president of McCord, in a press release. "Bolting this digital future onto aging cities is no easy task. With Generation Park, we have a once-in-a-lifetime opportunity to start from the beginning and rapidly prove up hardware and software technology solutions, at a massive scale."

Both the size of the development — which is larger than Google's Sidewalk Labs project in Canada and Toyota's Woven City in Japan, according to the release — and location are what provides Generation Park with this opportunity for smart city technology.

"Generation Park, while being physically many times larger than most smart city projects, also benefits from being located in a more physically, socially, and economically diverse test bed of a notoriously low-regulation part of the United States — Houston, Texas," McCord continues.

As the development is currently still being worked on, McCord's current focus right now is tapping into data to drive project and design decisions.

Cardwell has a background in technology and was previously overseeing operations and engineering at Austin-based construction software company, Bractlet.

"McCord's vision for Generation Park is the future of commercial development, pushing digital innovation into the forefront and leveraging cutting-edge technologies throughout their portfolio. I am beyond thrilled to join the McCord team and help make that vision a reality," says Cardwell, in the release. "Through the use of experiences, data, and collaborations, we will accelerate learnings and, in turn, advance resources that will truly improve people's lives."

Nick Cardwell has been hired as vice president of digital innovation at McCord. Photo courtesy of McCord

Houston lab develops game-changing supplement for cell heath

miracle worker

Rajan Shah, an MIT-trained chemical engineer, brought his patented manufacturing process 20 years in the making and from an ocean away to Houston with one goal in mind: to take what he calls the body's "master antioxidant" to market.

Known as Continual G, Shah's product packs the supplement known as Glyteine into a powder form that when mixed with water can be consumed as a citrus-flavored beverage. Glyteine is known to increase cellular glutathione levels in the body, which can boost immunity, support sports activity and recovery, and address a variety of oxidative stressors that impact the body and brain as humans age.

Shah and a team of four at his INID Research Lab in Cypress are the only company in the world producing the dipeptide in this accessible format.

"The fact that the only way to increase cellular glutathione is with Glyteine has been known for almost 40 years," Shah says. "The problem is how to make it in a way which becomes cost effective so that it can be sold and people can afford to buy it."

It was this problem that Shah and a team at the University of New South Wales in Australia spent about 13 years tackling, as the creation the Glyteine — which requires the rare catalyzation of enzymes — would leave researchers with expensive byproduct that would result in high costs for little product. But in 2005, the university was awarded a patent for the manufacturing process the group developed that essentially eliminated waste. Instead, they were able to recycle the by product to create even more of the powerful protein.

"Only when we could solve these problems did it become affordable. Then you are using your raw materials to produce your product and nothing else. We were able to recycle," Shah explains. "That is what took the time and that is what made it affordable cost wise."

Next the group spent years scaling the production of the compound and learning how to best deploy it to a customer base. Initially, the group hoped to simply sell the protein to large supplement companies, such as GNC. But when they were met with reservations due to the product's newness, they pivoted.

Houston's large pool of chemical manufacturing workers and easy access to water (a key ingredient in Continual G's production) attracted the Aussie-based scientist. And in 2017, Shah took the practices from down under to the Bayou City just days before Hurricane Harvey hit.

Today the group is producing about a quarter of a million packets of Continual G each month with the help of an outsourced, Texas-based manufacturer who assists the group of engineers in transposing the compound into a drinkable powder. They operate out of a state-of-the-art, 14,000-square-foot manufacturing facility and hope to scale up again.

"Everyone involved with this endeavor has a heartfelt commitment," Shah adds in a statement. "Glyteine has profound implications for human health. That alone has made it well worth the effort to overcome every challenge we have faced and continue to face."

Energy and the election: What the 2020 outcome means for the future of oil and gas

guest column

The United States Presidential election is at our doorstep. The fossil fuel industry is under significant pressure and the outcome of the election could impact the speed at which exploration and production is impacted. This pressure is financial in nature, but also is operational, technological and all wrapped in physics. A mere 12 to 18 months ago, environmental, social and governance influences and overlays on E&P began and are only accelerating.

My company, Riverbend Oil and Gas, is beginning to see the industry rebound from a significant downturn in revenues, activity, and confidence in 2020 due to the impacts of COVID-19 and the OPEC price war earlier this year. The industry is battling with headwinds, including, lack of access to debt/equity capital, transaction valuations, commodity prices, shale well spacing, and other issues, all impairing market conditions.

At present, there is little to no lubrication in the system. With most talking about an oil and gas market cycle that is driven by supply and demand fundamentals over previous decades, now there is more discussion of a contrarian view of those confident of a demand recovery for oil and gas.

Since the start of energy private equity, funds were raised by general partners to support the small cap E&P space, in the late '80s, private equity became a significant participant in the oil and gas upstream space. Private equity firms became great in number as institutions desired exposure to a growing segment of the market outside of merely investing in the oil and gas public equities. This role, 30 to 35 years later, remains essential, but is currently stifled with thoughts of a declining fossil fuel world and with energy representing only about 2 percent of the S&P 500.

Hydrocarbon outlook

Looming headwinds in the fossil fuel industry include The Green New Deal, an accelerating consciousness of the carbon footprint, the Paris Climate Accord, ESG importance, and the growth of renewables. Additionally, the advent of electric vehicles presents a significant new entrant that is causing a substantial threat to oil's monopoly on the transportation sector. A collision of possible futures exists. Currently, around 1 billion vehicles today are using around 30 percent of the world's oil supply with an estimate of 4 million electric vehicles on the roads globally. Some forecasters predict around 400 million electric vehicles in 2040, decreasing oil supply demand by an estimated 6 percent.

These forecasts of human mobility are driven by the nature of human ambition and worldwide population growth. Africa, China, and India are expected to grow significantly through 2100. Moreover, all persons worldwide strive for a better life for themselves and their families — energy drives these ambitions.

Meanwhile, the capital markets for public fossil fuel companies has declined by over 90 percent from 2016 to 2019 with a continued dismal outcome year-to-date in 2020. The lack of cash flow and capital markets will likely drive less U.S. and non-nationalized produced oil and gas volumes and fewer sustainable companies. Many confident analysts predict a looming oil supply shortage in 2021 driven by these factors along with a federal lands development ban and the possible slowdown of fracking. However, others predict that peak oil demand is now and the need for fossil fuels has already reached a peak.

Assessing the candidates

The results of the election are anticipated to have significantly differing implications (should campaigning be a real signal) for the oil and gas industry. While a Donald Trump win would largely represent a status quo for the environment, a Joe Biden triumph could drive towards changes. Implications are wide ranging across the equity, credit and commodities market energy value chain.

It is important to evaluate who will have control of the House and Senate to pass said legislation. The House is expected to remain with the Democrats, comfortably winning at least 224 of the 435 seats. Recent polls have pointed toward a competitive Senate election cycle. The Republicans currently have a 53-47 Senate majority, but a Democrat favored majority of 51-49 is currently predicted.

The next question is whether the filibuster would be eliminated to push legislation through without a super majority needed; meaning Democrats could drive approvals with a 50-50 tie and Kamala Harris's vote. Although polls are pointing toward a "blue wave" for the Democrats, certain moderate democrats in oil and gas states such as Colorado, New Mexico and Pennsylvania may be swayed against major regulatory or legislative threats to oil and gas exploration and production. Additionally, elected authorities in anticipated Republican states such as Texas, Oklahoma, North Dakota, Utah, and Ohio who are home to industry trade groups and fossil fuel companies will play a significant role.

The Biden Administration has discussed several energy-related policies. These include support for climate-friendly legislation, a ban on federal lands and water permits that represented 21 percent of U.S. oil output in 2019, and an increased investment of $2 trillion over four years in clean energy technologies. To put this investment into perspective, total global energy investment from 2017 to 2019 averaged $2 trillion, and Biden's plan would add $500 billion per year. Biden would target roughly two thirds of U.S. carbon emissions focusing on transportation (40 percent) and electricity production (31 percent).

Broadly, the goal is a nationwide carbon reduction to achieve net-zero emission no later than 2050 and transition to a carbon pollution-free power sector by 2035. In order to achieve the 2050 net zero emissions goal, the world requires 2020 COVID-19 sized reductions (8 percent) every other year for the next 25 years. Throughout this energy transition, energy prices are likely to increase, and as a result, the pace of the energy transition will likely reflect the balance of societal demand to reduce fossil fuel usage and the costs (economic, convenience, speed, satisfaction) of doing so.

Renewables and hydrocarbons

In 2019, the U.S. accounted for 15 percent of global CO2 emissions (5,130 MM metric tons of CO2), down 873 MM metric tons since the U.S. peaked in 2007. The large decrease can be attributed to coal-to-gas switching, while wind generation and solar power installations also aided the decline. From 2018 to 2019 alone, coal-to-gas switching decreased U.S. emissions by 140 MM metric tons, driving the largest decrease for the year. While shifting from one end of the carbon-emitting energy spectrum to another, it is imperative to balance costs, plausibility and expectations.

Hydrocarbons can be stored for less than $1 per barrel of oil equivalent, or BOE, while renewables cost $200 per BOE. Total U.S. renewable storage capabilities can provide two hours of national electricity demand which is stored in the utility-scale batteries on the grid and in the about 1 million electric vehicles on U.S. roads. Storage, physics and costs are major drivers for a hydrocarbon partnership as the U.S. transitions to a less carbon-heavy source of fuel. While costs of wind and solar have been driven down by around 70 percent and 89 percent, respectively since 2009, the Betz Limit and Shockley-Queisser Limit do have a governor on further improvements of the current technology and materials. Similarly, subsurface oil and gas reservoirs have similar boundary conditions of physics involving ultimate recovery of resources through natural production, fracking and/or enhanced recovery techniques.

The goal of providing low cost, reliable energy to consumers, enhancing lives and providing better futures can be reached through utilizing hydrocarbon technologies in tandem with renewable sources. A vast amount of investment, research and development is still required in the renewable world, including battery storage, solar/wind efficiency, electric grid expansion and electric vehicle technology/charging stations.

According to the 2020 IEA Energy Outlook, oil and gas represented 55 percent of global energy demand in 2019 and the agency predicts that oil and gas will comprise 46 percent to 54 percent of the energy stack in 2040. This is a relatively flat market share. Coal, on the other hand, cedes market share to renewables and nuclear power, decreasing from 30 percent to 10 percent. While renewables are vital to reaching the U.S. goals of net-zero emissions, hydrocarbons are essential in backstopping U.S. energy needs and ambitions throughout this energy transition. Additionally, on a global scale, cheaply sourced and stored hydrocarbons are essential for emerging economies to advance through existing carbon-emitting infrastructure, eventually leading to renewable alternatives and global carbon reduction.

We remain encouraged for the next decade of growth and performance as we look to identify unique opportunities in the space. In a dynamic oil and gas market, Riverbend has a high degree of confidence to sustain and thrive due to our culture, performance-based team and systems. Riverbend is anchored by vigorous technical subsurface reserve assessments as well as land, accounting and commercial diligence. Additionally, Riverbend, as an energy company, is investing in the alternatives segment, concentrating on materials and services in the wind, solar and battery portions of the value chain. In a world full of human ambition, we see a need for all energy to support undeveloped nations and economies to access the opportunity of the American Dream, pursuing elimination of a "have" and "have not" world.

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Randy Newcomer is president and CEO of Houston-based Riverbend Oil and Gas, a private equity investment group specializing in the energy industry.