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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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Chevron eyes $7B Texas power plant for Microsoft data center campus

power deal

Software giant Microsoft is negotiating exclusively with Houston-based oil and gas titan Chevron and investment firm Engine No. 1 about the development of a $7 billion power plant in West Texas that would supply electricity for a Microsoft data center campus.

The proposed natural-gas-fired plant initially would generate 2,500 megawatts of electricity, Bloomberg reports. The plant would be built near Pecos, a Permian Basin city, in an area where Microsoft plans to build a 2,500-megawatt data center campus on a 7,000-acre site.

A deal with Microsoft would secure a long-term customer for the plant’s output and help finance its construction, Bloomberg says. The project, expected to be producing power by 2030, still requires tax and environmental approvals as well an agreement to terms among Chevron, Engine No. 1, and Microsoft.

In a statement issued after Bloomberg reported the news, Chevron acknowledged it was in exclusive talks with Engine No. 1 and Microsoft, but the oil and gas company offered no details.

Chevron says the proposed plant “reflects an emerging shift in how power for AI is being developed, bringing energy supply closer to demand through co-located, behind-the-meter generation to deliver reliability while helping avoid added strain on regional electricity systems. It pairs sustained, always-on demand from advanced computing with proven capability to design, build, and operate large-scale energy infrastructure.”

Development of gas-powered electrical plants for AI data centers represents a new—and potentially lucrative— business line for Chevron. In 2025, Chevron, Engine No. 1 and GE Vernova announced a partnership to produce natural gas for AI data centers in the U.S.

Chevron’s collaboration with Engine No. 1 has already secured an order for seven large natural gas turbines from GE Vernova, according to Bloomberg.

“Energy is the key to America’s AI dominance,” Chris James, founder and chief investment officer of Engine No. 1, said last year. “By using abundant domestic natural gas to generate electricity directly connected to data centers, we can secure AI leadership, drive productivity gains across our economy, and restore America’s standing as an industrial superpower.”

8 CERAWeek 2026 takeaways from a new Houston energy leader

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My first CERAWeek was a blur.

Having top energy executives, policymakers, and technologists all gathered in Houston—over 11,000 of them this year—was both overwhelming and energizing. The theme was “Convergence and Competition: Energy, Technology, and Geopolitics,” and walking through the George R. Brown Convention Center, it was immediately clear that this was no ordinary industry conference.

As a first-timer with a Greentown Labs lens, here’s what really stuck with me.

Disruption is the new normal

CERAWeek 2026 was set against the backdrop of conflict in the Middle East, the continued race to power AI, and a clear throughline: disruption is increasingly the new normal. You could feel it in every hallway conversation. The ongoing conflict in the Middle East, specifically Iran’s attacks on Qatar’s Ras Laffan facility and the closure of the Strait of Hormuz, affected roughly 20% of the world’s liquified natural gas supply, and that was woven into nearly every conversation throughout the week.

Secretary of Energy Chris Wright opened the conference with “Energy is life,” then quickly turned to natural gas. “America’s superpower is natural gas,” he said, pointing to its role in industry, heat, electricity, fertilizer, exports, and leading AI and manufacturing. That set the tone early and it never really shifted.

AI is still everywhere, but the conversation has shifted

No surprise that AI dominated the agenda. But what struck me as a first-timer was how much the conversation had matured. The AI discussion has moved from general enthusiasm to a much more practical focus on real use cases and measurable outcomes.

NVIDIA, Anthropic, and CyrusOne joined the established tech presences of Microsoft, Google, and AWS, occupying the Innovation Agora’s new AI Hub, which displaced the hydrogen hub from prior years. That detail alone tells you something about where the energy conversation has shifted. Annual global investment in data centers reached $771 billion in 2025, nearly on par with oil and gas ($835 billion) and renewable energy ($798 billion). We are not talking about a niche technology story anymore. This is a capital story, an infrastructure story, and an energy story all at once.

The prevailing tone was uncertain; the gap between what is being announced and what can actually be delivered was the subtext of almost every conversation. Transmission takes over a decade to build. The new generation takes five to nine years. AI infrastructure moves on three-to-five-year timelines. The math doesn’t work yet, and everyone is aware.

Pitch competitions still draw crowds

The Energy Venture Day and Pitch Competition at the McKinney Balcony was one of my favorite events of the week. Seeing Greentown members on that stage never gets old, but what really energized me was the broader mix: students, new founders, and veteran entrepreneurs in one space, all talking about how what they’re building is going to impact the world. S&P Global launched the NextGen cohort with 100+ graduate students from around the country getting a front-row seat to the energy sector.

Geothermal may have stolen the show

If I had to pick the most surprising theme of my first CERAWeek, it was geothermal. It drew the most consistent endorsement of the week, with Department of Energy representatives, oil and gas majors, and operators broadly aligned on its potential. Project InnerSpace hosted a dedicated Geothermal House for the first time, launching a standardized resource classification framework with the Society of Petroleum Engineers and an XPRIZE collaboration targeting surface-plant supply chain breakthroughs. For a sector that has lived in the shadows of wind and solar for years, CERAWeek 2026 was geothermal’s time to shine.

Wow, was I impressed with Melanie Nakagawa

Melanie Nakagawa, chief sustainability officer at Microsoft, delivered an impressive keynote during her fireside chat with Brad Burke. Her depth of experience, from the U.S. Department of State and venture capital to her current role at Microsoft, was matched only by her calm, hopeful demeanor. Leaders like her at the helm of climate action inspire genuine confidence in the future.

What about hydrogen?

Hydrogen was notably absent from the main stage. The AI Hub in the Innovation Agora displaced the hydrogen hub that had been a fixture in prior years. Seems like hydrogen still plays a role, but not as quickly or broadly as hoped. Blue hydrogen is moving forward cautiously. It wasn’t gone from the conversation entirely, but it no longer commands the room.

The label problem isn’t going away

Politics continues to polarize the industry. Climatetech, sustainability, cleantech — some labels carry broad objectives, others have become tribal signals. “Energy transition” for some means a replacement of fossil fuels; for others, it means an evolution across multiple dimensions simultaneously. CERAWeek 2026 showed an industry increasingly focused not on feel-good narratives about the future of energy, but on the harder questions of security, buildout, reliability, affordability, and competitiveness. A pragmatic shift may be the best answer to the label problem.

Collaboration isn’t optional—it’s strategic

The energy transition is no longer primarily an environmental story. It has become a technology and national competitiveness story. The problems are too big for any one company, sector, or country to solve alone. From incubators and investors to utilities and hyperscalers, the message was consistent all week: move together or we don’t move. S&P Global introduced “The Bridge,” a new venue specifically for energy-tech crossover conversations: a small but meaningful signal that even the conference organizers recognize that collaboration will get us further.

The scale and the energy in the room (pun intended) are what stood out most from my first CERAWeek. The industry knows what needs to get built. The question now is whether we can work together to build it fast enough.

See you next year, CERAWeek.

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Kelsey Kearns is director of Greentown Houston with more than a decade of experience in the technology sector. She served as director of community strategy for Greentown Houston from September 2025 to February 2026. Before that, she was director of business development for Howdy.com.

Houston nuclear startup launches at CERAWeek, plans Texas facility

going nuclear

A new nuclear energy startup launched last month during CERAWeek in the Bayou City.

FluxPoint Energy, the new Houston- and McLean, Virginia-based company, plans to develop the nation’s first new uranium conversion facility in more than 70 years, an effort CEO and founder Mike Chilton says is critical to unlocking the next phase of nuclear energy growth.

"Policymakers, utilities, and developers increasingly point to fuel availability as a limiting factor for America's nuclear reactors—both present and future," Chilton said in a news release. "Uranium conversion has become an unacceptable chokepoint in a global supply chain still dominated by foreign providers."

Chilton has held leadership roles at Pegasus-Global Holdings and GE Verona Hitachi Global Nuclear Fuels. Rodrigo Gonzalez Arbizu serves as COO and Christopher J. Rimel as chief of staff. The Board of Advisors includes energy leaders, including Jeff Lyash, John Sharp, Jane Stricker, Jennifer Skylakos, Leo Weitzenhoff and Jay Wileman.

FluxPoint’s planned facility will convert uranium oxide into uranium hexafluoride (UF6). Although FluxPoit’s new facility is still far off, the company announced it had secured a site and completed both market and feasibility studies. The specific area has not been revealed, only that it will be in Texas.

Discussions at CERAWeek revolved around securing reliable sources of uranium.

Nuclear energy production has been stagnant or even in slight decline since the 1990s. Concerns about nuclear waste and safety, as well as prohibitive costs, have kept new plants from being built, while the widespread availability of cheap natural gas has made investing in nuclear power less profitable. Many see the technology as dangerous and outdated.

However, as energy crises become more common, companies like FluxPoint are looking to restart the nuclear energy sector. The industry got a boost under the Biden Administration thanks to the Inflation Reduction Act, which set goals of adding 35 gigawatts of new capacity by 2035.

Chilton participated in a panel on the best ways to ensure American nuclear plants have access to uranium, most of which is not mined in the United States.

"America cannot lead in nuclear energy while relying on foreign-controlled fuel processing," Chilton added. "FluxPoint was created to restore a critical piece of our nation's energy infrastructure—ensuring that U.S. reactors have access to a secure, domestic fuel supply. This is about energy security, economic strength, and global leadership."

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