Houston energy leader on why the future of fuels is more than electric vehicles

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The future of transportation fuels will be shaped by a mix of innovation, government policies, and what consumers want. Photo by Engin Akyurt/Pexels

Gasoline, diesel, bunker fuel, and jet fuel. Four liquid hydrocarbons that have been powering transportation for the last 100-plus years.

Gas stations, truck stops, ports, and airport fuel terminals have been built up over the last century to make transportation easy and reliable.

These conventional fuels release Greenhouse Gases (GHG) when they are used, and governments all over the world are working on plans to shift towards cleaner fuels in an effort to lower emissions and minimize the effects of climate change.

For passenger cars, it’s clear that electricity will be the cleaner fuel type, with most countries adopting electric vehicles (EVs), and in some cases, providing their citizens with incentives to make the switch.

While many articles have been written about EVs and the benefits that come along with them, they fail to look at the transportation system as a whole.

Trucks, cargo ships, and airplanes are modes of transportation that are used every day, but they don’t often get the spotlight like EVs do.

For governments to be effective in curbing transportation-related greenhouse emissions, they must consider all forms of transportation and cleaner fuel options for them as well.

43 percent of GHG emissions comes from these modes of transportation. Therefore, using electricity to reduce GHG emissions in light duty vehicles only accounts for part of the total transportation emissions equation.

The path to cleaner fuels for these transportation modes has its challenges.

According to Ed Emmett, Fellow in Energy and Transportation Policy at the Baker Institute Center for Energy Studies (CES);

"Airplanes cannot be realistically powered by electricity, at least not currently, and handle the same requisite freight and passenger loads"
"The long-haul trucking industry [...] pushed back against electrification as being impractical due to the size and weight of batteries, their limited range, and the cost of adoption"
"Shipowners have expressed reluctance to scrap existing bunker fueled ships for newer, more expensive ships, especially when other fueling options, e.g. biofuels and hydrocarbon derivatives-for fleets can be made available"

Finding low-cost, reliable, and environmentally sound fuels for the various segments of transportation is complex. As Emmett suggests in his latest article;

"Hovering over the transition to other fuels for almost every transportation mode is the question of dependability of supply. For the trucking industry, the truck stop industry must be able to adapt to new fuel requirements. For ocean shipping, ports must be able to meet the fuel needs of new ships. Airlines, air cargo carriers and airports need to be on the same page when it comes to aviation fuels. In other words, the adoption equation in transitions in transportation is not only a function of the availability and cost of the new technology but also a function of the cost of the full supply chain needed to support fuel production and delivery to the point of use. Going forward, the transportation industry is facing a dilemma: How are environmental concerns addressed while simultaneously maintaining operational efficiency and avoiding unnecessary upward cost shifts for moving goods and people? In answering that question, for the first time in history, modes of transportation may end up going in multiple different directions when it comes to the fuels each mode ultimately chooses."

This is why many forecasts predict that hydrocarbon demand will continue through 2050, despite ambitious aspirations of achieving net zero emissions by that year. The McKinsey "slow evolution" scenario has global liquid hydrocarbon demand in 2050 at 92mmb/d versus 103 mmb/d in 2023. With their "continued momentum" scenario, oil demand is 75 mmb/d. Proportionally, global oil demand related to GHG emissions from transportation would decline 11-27 percent. The global uptake of EVs is the primary driver of uncertainty around future oil demand. In all the McKinsey scenarios, the share of EVs in passenger cars sales is expected to be above 90 percent by 2050.

The Good News

Despite the relatively slow progress expected for reducing GHG emissions in the global transportation sector, there are solutions emerging that lower the carbon footprint tied to traditional petroleum-based fuels. Emmett highlights some of the methods under study, noting that "sustainable biofuels sourced from cooking oils, animal fats, and agriculture products, as well as hydrogen, methanol, ammonia, and various e-fuels are among the options being tested. Some ocean carriers are already ordering ships powered by liquified natural gas, bio-e-methanol, bio/e-methane, ammonia, and hydrogen. Airlines are already using sustainable aviation fuel as a supplement to basic aviation fuel. Railroads are testing hydrogen locomotives. The trucking industry is decarbonizing local delivery by using vehicles powered by electricity, compressed natural gas, and sustainable diesel. Long-haul trucking companies are considering sustainable diesel as a drop-in fuel for existing equipment, and fuel suppliers are researching new engines fueled by hydrogen and other alternative fuels."

Most of these options will require a combination of increased government incentives, along with advancements in technology and cost reductions.

McKinsey's "sustainable transformation" scenario, which considers potential shifts in government regulations as well as advancements in technology and cost, suggests there is moderate growth in alternative fuels alongside growth in EVs. Mckinsey projects;

EV demand could grow to over 90 percent of total passenger car sales by 2050
EVs to make up around 80 percent of commercial truck sales by 2050
In aviation, low carbon fuels such as biofuels, synfuels, hydrogen and electricity are projected to grow to 49 percent by 2050.

According to McKinsey, the combination of these alternatives along with demand changes in power and chemicals could reduce global oil demand to 60 mmb/d in 2050. The shift to cleaner fuels, for modes of transportation other than EVs, is underway but the progress and adoption will take decades to achieve according to McKinsey’s forecasts.

Looking more closely at EVs, the story may not be as dire globally as it seems to be in the West. While the U.S. appears to be losing momentum on electric vehicle adoption, China is roaring ahead. New electric car registrations in China reached 8.1 million in 2023, increasing by 35 percent relative to 2022. McKinsey’s forecasts have underestimated global EV sales in the past, with China surpassing their estimates, while the U.S. lags behind. It’s clear that China is the winner in EV adoption; could they also lead the way to adopt cleaner fuels for other modes of transport? That is something governments and the transportation industry will be watching in the years ahead.

Conclusion

While we are not on a trajectory to meet the aspirations to reduce global GHG emissions in the transportation sector, there are emerging solutions that could be adopted should governments around the world decide to put in place the incentives to get there. Moving forward, the future of transportation fuels will be shaped by a mix of innovation, government policies, and what consumers want. The focus will be on ensuring that the transportation sector remains reliable, secure, and economically robust, while also reducing GHG emissions. But, decarbonizing the transportation sector is much more than just EV's – it's a broader effort that will require continued global progress in each of the multiple transportation segments.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn on October 9, 2024.

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ExxonMobil and Mitsubishi are still working out details of the arrangement, such as equity participation in the project and use of the low-carbon ammonia. Photo via exxonmobil.com

Mitsubishi, ExxonMobil announce low-carbon ammonia production partnership in Baytown

dream team

Spring-based ExxonMobil has teamed up with Japan’s Mitsubishi to potentially produce low-carbon ammonia and nearly carbon-free hydrogen at ExxonMobil’s facility in Baytown.

ExxonMobil and Mitsubishi are still working out details of the arrangement, such as equity participation in the project and use of the low-carbon ammonia.

“We look forward to furthering our leadership position, alongside Mitsubishi Corporation, to advance low-carbon hydrogen and ammonia globally, helping the world achieve a lower emission future,” Dan Ammann, president of ExxonMobil Low Carbon Solutions, says in a news release.

The ammonia would be shipped to Japan for power generation, process heating, and other industrial purposes. In conjunction with this project, Mitsubishi would convert part of a liquified petroleum gas (LPG) terminal into an ammonia terminal. The Japanese conglomerate plans to partner with Japanese petroleum company Idemitsu Kosan for ammonia purchases and a joint equity stake in the Baytown project.

The Baytown project is expected to generate as much as one billion cubic square feet of low-carbon hydrogen per day and more than one million tons of low-carbon ammonia per year.

A financial decision on the project is set for 2025, with the project coming online in 2029.

“We are excited to be closely collaborating with ExxonMobil to develop low-carbon hydrogen and ammonia supply chains that will bridge the United States and Japan,” says Masaru Saito, CEO of Mitsubishi’s Environmental Energy Group. “Together, we will lead this joint initiative to assist in the acceleration of the hard-to-abate sectors’ transition to clean energy.”

The project’s first phase is targeted to produce more than 1.1 million tonnes per annum of low-carbon ammonia by the end of 2027. Photo via Houston.org

4 energy companies join forces on low-carbon ammonia project on the Houston Ship Channel

team work

Four companies from all around the world have agreed to work on a large-scale, low-carbon ammonia production and export project on the Houston Ship Channel.

Tokyo-based INPEX Corporation, Paris-based Air Liquide Group, Oklahoma City-based LSB Industries Inc., and Houston-based Vopak Moda Houston LLC have agreed to collaborate on the project, which is expected to deliver its first phase by the end of 2027 with the production of more than 1.1 million tonnes per annum (MTPA) of low-carbon ammonia.

“As we approach the achievement of our net zero target by 2050, the unveiling of our low carbon ammonia project in Texas, USA, stands as a momentous testament to INPEX's strong commitment to environmental leadership," INPEX President and CEO Takayuki Ueda says in a news release. "This innovative endeavor marks a significant milestone to create a clean fuel supply chain for a sustainable future.

"By harnessing the power of cutting-edge technologies and collaborative partnerships with Air Liquide, LSB and Vopak Moda, we are accelerating the transition to a low-carbon world, while solidifying our position as a pioneer in energy transformation and a responsible global energy player,” he continues.

Earlier this year, the project completed a feasibility study. Each of the companies will collaborate in various capacities, according to the release, including: Air Liquide and INPEX partnering on low-carbon hydrogen production with their respective technologies; LSB and INPEX collaborating on low-carbon ammonia production, with LSB selecting the ammonia loop technology provider, the pre-FEED, and the engineering, procurement and construction of the facility and LSB overseeing day-to-day operations; INPEX and LSB would sell the low-carbon ammonia and finalize off-take agreements; and Vopak Moda, which currently operates ammonia storage and handling infrastructure, will maintain its ownership of the existing infrastructure and future storage built.

“This project is well aligned with our strategy to become a leader in the global energy transition through the production of low-carbon ammonia,” Mark Behrman, LSB Industries president and CEO, says in the statement. “As a long-standing, highly experienced nitrogen producer and developer of nitrogen production facilities, we are uniquely positioned to play a key role in a critical element of this project by overseeing the design, construction and operation of the ammonia loop."

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Houston energy firm to develop data center projects in Matagorda County

data center developments

Houston-based Barrio Energy will develop two new projects for 10-megawatt data center sites in Matagorda County.

Located in the ERCOT South Zone, the projects will assist in powering advanced computing operations, modular data centers and cryptocurrency mining, according to a news release.

Barrio Energy is a provider of energy infrastructure solutions for computing and data centers, and its new locations will build on its existing Texas sites in Monahans, George West, Lolita and Tyler. The Tyler location, a 12-megawatt data center connected to the ERCOT grid, opened in 2024.

“The ERCOT South Zone’s strong infrastructure and access to abundant power make it an optimal location for next-generation computing,” Ivan Pinney, CEO of Barrio Energy, said in a news release. “These developments expand our portfolio and contribute to local economic growth through job creation and technological innovation.”

Operations at the first of the two sites are expected to commence in Q4 2025, with the second site following in Q1 2026.

“We are excited to advance these two high-potential 10MW sites in Matagorda County, which perfectly align with our mission to provide scalable, efficient energy solutions for our clients,” Pinney added in the release.

Expert: 6 solutions to address the energy industry’s talent shortage

Guest Column

Across the energy sector, companies are facing the growing challenge of finding skilled workers. In fact, 71% of energy employers say they are struggling to fill open roles. What is causing the shortage? A mix of factors, including an aging workforce, outdated perceptions of the industry and a rising global demand for energy.

This talent gap threatens progress on big goals like transitioning to cleaner energy, upgrading infrastructure and driving innovation in renewables. Solving the problem isn’t simple, but it is possible. It is going to take a coordinated, long-term approach that includes education, recruitment, training, retention and supportive policies. Let’s explore some practical solutions.

1. Build a strong foundation through STEM and career pathway awareness

Solving the workforce shortage starts well before college or the first job offer. We need to reach students early, with STEM education, career exposure and clear pathways to energy careers. Elementary, middle and high school programs that connect science and math with real-world energy applications can spark curiosity and show students the range of opportunities available in the energy industry.

Organizations like the Energy Education Foundation are helping by partnering with educators and employers to align curriculum with real industry needs and bring energy topics to life in the classroom. We also need to ensure students understand the full range of energy systems, from traditional oil and gas to renewables like wind and solar, as well as nuclear, hydrogen and other emerging technologies. A broad, well-rounded understanding of the entire energy value chain will better prepare them for the future of work in this dynamic industry.

As technologies evolve, so must the systems that prepare people to work with them. Energy companies can collaborate with universities, trade schools and community colleges to design programs that match today’s job requirements through hands-on apprenticeships, industry-recognized certifications and digital skills training.

Affordability can also be a barrier for many students who are interested in energy careers but face financial obstacles to higher education. While four-year degrees are important for some roles, they are not the only path into the industry. Trade schools, community colleges and certificate programs offer fast, affordable routes into high-demand jobs, often with strong earning potential right out of the gate. The industry can do more to elevate these options by promoting offshore, field and technical roles as innovative, high-impact careers.

2. Help today’s workforce learn new skills

As more energy companies adopt digital tools like automation, artificial intelligence and data analytics, there is a growing need for employees with the tech skills to match. But right now, there is a shortage of those skills across the board. That is why upskilling and reskilling current employees is so important. Companies can create internal training platforms, offer recognized certifications and explore immersive tools like virtual reality to simulate real-world scenarios. Cross-training employees to understand both traditional and renewable energy systems can also help build more flexible, future-ready teams.

3. Open the doors to broaden and diversify talent

The energy industry, being a global enterprise, has much to gain from embracing diversity across various dimensions, including cultural backgrounds, languages, work styles and time zone considerations. Research shows that culturally diverse companies are 33% more likely to out-innovate their competitors. These organizations are better equipped to generate a wide range of ideas and transform them into valuable products or services. The most successful firms offer equitable advancement opportunities, paid time off, family leave, mentoring and sponsorship programs and environments grounded in respect and fairness. These practices make a big difference not just in attracting talent, but in keeping it.

4. Use technology to support, not replace, people

From exploring new energy sources to managing the grid and storing power, technology is transforming the industry. But instead of replacing jobs, tools like AI and automation can be used to make work safer, smarter and more efficient. For instance, smart grid systems and AI-powered planning tools can cut downtime and boost productivity, freeing up skilled employees to focus on more strategic and creative tasks. When used thoughtfully, technology becomes an ally that helps teams do their best work.

5. Strengthen retention through purpose

While offering competitive salaries is important, it’s only one part of the equation. Many energy companies face challenges in areas such as career development, workplace culture and building trust in leadership. These elements play a significant role in shaping the employee experience and can strongly influence retention.

For younger professionals, particularly millennials and Gen Z, the opportunity to address sustainability challenges is especially compelling. A 2024 survey revealed that nearly 90% of respondents in these groups believe it’s essential for their work to make a difference, with 88% stating that their job should align with their personal values. Clean energy careers strongly align with these expectations. In fact, 81% of surveyed individuals see the clean energy sector as a promising career path. Among the top reasons cited were the sector’s positive environmental impact and the opportunity to be part of something larger than themselves. Even among those currently employed in unrelated fields, 65% expressed a willingness to pivot to a clean energy role, underscoring the growing demand for purpose-driven careers. People want to feel like their work matters and that they are growing. In a fast-evolving sector, building a strong team is about offering purpose, not just perks.

6. Embrace collaboration

No single company can solve the energy workforce shortage on its own. This is a shared challenge, and it needs a shared solution. That means governments, schools and businesses need to collaborate on everything from education to job training. As an example, it is critical to align training programs with real workforce needs. That means sharing data across sectors to understand where demand is heading and making sure employees are trained for the jobs of the future.

The energy sector is at a turning point. As we continue to embrace energy expansion, we need a workforce that can make it all happen. That requires more than quick fixes. It takes a long-term, inclusive approach that supports talent at every stage, from early education to career advancement. By investing in people as intentionally as we invest in technology and infrastructure, we can close the talent gap and build a workforce ready to power a stronger energy future.

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Kristen Barley is the executive director of the Energy Education Foundation, a nonprofit dedicated to inspiring the next generation of energy leaders by providing comprehensive, engaging education that spans the entire energy spectrum.

Houston energy hub announces first cohort for new accelerator

green team

Energytech Nexus, a Houston-based hub for energy startups, has named its inaugural cohort of 14 companies for the new COPILOT accelerator.

COPILOT partners with Browning the Green Space, a nonprofit that promotes diversity, equity and inclusion (DEI) in the clean energy and climatech sectors. The Wells Fargo Innovation Incubator (IN²) at the National Renewable Energy Laboratory backs the COPILOT accelerator.

The eight-month COPILOT program offers mentorship, training and networking for startups. Program participants will be tasked with developing pilot projects for their innovations.

Two Houston startups are members of the first COPILOT class:

GeoFuels, housed at Houston’s Greentown Labs, has come up with a novel approach to hydrogen production that relies on geothermal power and methane decomposition.
PolyQor, which converts plastic waste into eco-friendly construction materials. Its flagship EcoGrete product is an additive for concrete that enhances its properties while reducing carbon emissions. PolyQor’s headquarters is at Houston’s Greentown Labs.

Other members of the COPILOT cohort are:

Birmingham, Alabama-based Accelerate Wind, developer of a wind turbine for commercial buildings.
Ann Arbor, Michigan-based Aquora Biosystems, which specializes in organic waste biorefineries.
Phoenix-based EarthEn Energy, a developer of technology for thermo-mechanical energy storage.
New York City-based Electromaim, which installs small hydro-generators in buildings’ water systems.
Chandler, Arizona-based EnKoat, an advanced materials company whose flagship product, the IntelliKoat System, is a patented two-layer thermal and weather barrier roof coating for flat and low-slope commercial buildings.
Calgary, Canada-based Harber Coatings, which manufactures electroless nickel coating and electroless nickel plating.
Dallas-based Janta Power, which designs and makes 3D solar towers.
Miami-based NanoSieve, a developer of gas remediation technology.
Palo Alto, California-based Popper Power, which has developed a platform that turns streetlight networks into resilient, maintenance-free distributed charging infrastructure.
Buffalo, New York-based Siva Powers America, developer of small wind turbines for farms, utility companies and others with annual energy needs of 300,000 to 2 million kilowatt-hours.
Los Angeles-based Thermoshade, which specializes in cooling panels for outdoor environments.
Waukesha, Wisconsin-based V-Glass, Inc., developer of a vacuum-insulated glass for affordable high-efficiency windows.

“These startups reflect the future of energy access and resilience innovation,” said Juliana Garaizar, founding partner of Energytech Nexus. “By connecting them directly with partners through

COPILOT, we’re helping them overcome the ‘pilot gap’ to build solutions that scale.”

The startups will run pilot projects along the Gulf Coast for their inventions.

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