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Houston expert: When it comes to the future of energy and climate, think 'all of the above'

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There's no silver bullet for clean energy. We need an all-hands-on-deck approach, writes Scott Nyquist. Photo via Getty Images

People in the energy industry don’t have the Oscars. For us, the big event of the year is CERAWeek — a conference stuffed with CEOs, top policymakers, and environmental and energy wonks held annually in March.

CERAWeek 2022, with the theme“Pace of Change: Energy, Climate, and Innovation," meant the return of in-person activations, panels, and networking. Walking and talking between sessions and around the coffee table, it occurred to me that the unofficial theme of the event was “Maybe now we can find middle ground on energy.” This idea came up time and time again, from all kinds of people.

As with too many other issues, the discussion of the future of US energy has become polarized. On one end of the spectrum are those who want everything renewable and/or electrified by ….. last week, whatever the cost. Their mantra for fossil fuels: “Keep them in the ground.”

On the other end, are those who dismiss climate change, saying we can always adapt and that it doesn’t much matter, anyway. Just keep digging and drilling and mining as we have always done. And in the middle are the great majority of Americans who are not passionate either way, but want to be responsible consumers, and also to be able to visit grandma without breaking the bank.

I believe that the transition toward an energy system that is cleaner and less reliant on fossil fuels is realand will ultimately bring substantial benefits. At the same time, I believe that energy security and economics also matter. At a time when inflation was already running high, paying an average of $4.25 a gallon at the pump is piling pain on tens of millions of US households. Ultimately, over decades, the use of electric vehicles will reduce the need for oil and that lower-emissions sources, including renewables, will provide a larger share of the power supply, which today depends largely on gas and coal. But that moment is not now, or next week. Indeed, fossil fuels continue to account for almost 80 percent of US primary energy consumption, and a similar figure globally.

Here is one way to think about the interplay between the energy transition and energy security: “We need an energy strategy for the future—an all-of-the-above strategy for the 21st century that develops every source of American-made energy.” No, that isn’t some apologist for Big Oil; it was President Obama. In 2014, the Obama White House also noted the role of US domestic oil and gas production in enhancing economic resilience and reducing vulnerability to oil shocks. In short, the White House argued, US oil and gas production can bring real benefits for the country. I think that is still true.

Does that mean throwing in the towel on the energy transition and climate change? Absolutely not. There are a variety of ways to pursue the goal of reducing emissions and eventually getting to net-zero emissions. I’ve touched on many of them in previous posts—including reducing methane emissions,pricing carbon, hydrogen, renewables, electric vehicles, urban planning, carbon capture, and negative emissions technologies. In other words, an “all of the above strategy” makes sense in this regard, too.

I don’t know how, or if, a middle ground can be captured. But from what I heard at CERAWeek last year, from people of otherwise widely divergent views, there just may be momentum to get there. A middle-ground consensus rests on three premises. First, we need fossil fuels for energy security and reliability now and until the time when technologies are in place to secure the energy transition. Second, at the same time, we need to be investing in the energy transition because climate change is real and matters. And third, for sustained and systematic progress, government and industry need to work together.

Or, in a phrase, “all of the above.”

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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.

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California geothermal co. grows C-suite, grows presence in Houston

making moves

A geothermal company with its headquarters in Palo Alto, California, has named new members of its C-suite and, at the same time, has expanded its operational footprint in Houston.

XGS Energy promoted Axel-Pierre Bois to CTO and Lucy Darago to chief commercial officer. Darago is based in Austin, and Bois, from France, lists his role as based in Houston on LinkedIn. Both have worked at XGS since February of last year.

“Axel and Lucy’s proven operational excellence and technical knowledge has helped propel XGS forward as we enter our next phase of growth,” Josh Prueher, CEO of XGS Energy, says in a news release. “I’m thrilled to have them both join XGS’ C-suite and have their support as we continue to grow our team, further advance our next-generation geothermal technology, and invest in our multi-gigawatt project pipeline.”

The news coincides with XGS's recent lease of over 10,000 square feet of office space in Memorial City. The company reports it plans to continue growth in the Houston region, "leveraging the region’s leading engineering and operational workforce and intensifying energy transition activity," reads the statement.

Bois was promoted from senior vice president of technology and has over 30 years of experience in geomechanics, wellbore integrity, completions design, and cement and rock testing. He previously founded and served as CEO of CURISTEC, a technical advisory firm providing services in oil and gas, geothermal, and geologic storage industries.

“We have developed a unique and proprietary approach to boosting the heat-harvesting potential of geothermal wells that is ready for commercial deployment in a range of environments today. I am excited to continue to grow our incredible team of scientists and engineers working on this important technology,” Bois says in the release. “We’re at the beginning of what this technology can unlock when it comes to supplying reliable, clean, and affordable geothermal energy globally.”

In her previous role as vice president of strategy, Darago led XGS’s financing strategy, which included a $20 million Series A expansion announced earlier this year. As CCO, she will oversee XGS’ global project development and will maintain a leading role in corporate affairs.

“It’s an exciting time to bring XGS’ technology to market. Demand for carbon-free baseload energy is at a record high, and the XGS system’s ability to unlock geothermal in more places, in a predictable and bankable way, is tailor-made for this moment,” Darago adds. “I am honored by our team and Board’s trust and look forward to helping drive the next stage of growth for XGS.”

XGS Energy promoted Axel-Pierre Bois to CTO and Lucy Darago to chief commercial officer. Image courtesy of XGS

Investor acquires majority stake in Houston energy storage, CCS co.

here's the deal

Investment firm Sixth Street has purchased a majority stake in Houston-based Caliche Development Partners, which focuses on buying, developing, and operating natural gas and gas storage facilities along with carbon sequestration projects.

Financial terms weren’t disclosed.

The deal includes Caliche’s Golden Triangle Storage facilities and carbon sequestration project in Beaumont, and its Central Valley Gas Storage facilities in Princeton, California.

Caliche says Sixth Street’s backing will enable it to expand its Golden Storage Triangle complex, including the addition of two natural gas caverns.

Caliche’s leadership will continue to oversee day-to-day operations and remain investors in the company. All employees in Caliche’s Texas and California offices and at its facilities are staying aboard.

“We continue to meet the growing demand for the storage of natural gas and industrial gasses, including helium and hydrogen, and provide the infrastructure for lower environmental impact forms of energy through our commitment to safety, deliverability, [and] asset integrity,” Dave Marchese, CEO of Caliche, says in a news release.

Richard Sberlati, a partner at Sixth Street, which has an office in Houston, says Caliche’s success “comes from a combined 65 years of collective storage experience, and we look forward to partnering with the company’s management as they further grow the business.”

Sixth Street’s acquisition of Caliche’s Texas business operations is expected to close in late 2024, and its acquisition of the California business operations is set to close in mid-2025.

Founded in 2016, Caliche announced in 2020 that it had arranged a $150 million debt facility with Houston-based investment firm Orion Infrastructure Capital. Two years later, Caliche gained $268 million in funding from Orion and Chicago-based asset management firm GCM Grosvenor.

What Houston energy companies can learn from a new workforce development program

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In Appalachia, a region known for its economic highs and lows, CNX is redefining what success looks like for the region. Through its Mentorship Academy, CNX is not just filling jobs, but creating meaningful careers that keep young people rooted in their communities. This program, designed to bridge the gap between education and the workforce, has been a game-changer for students who might otherwise not come across the same opportunities.

For those of us in Houston and across Texas, the CNX Mentorship Academy offers a powerful blueprint that could be replicated in our own communities. The challenges faced by young people in Appalachia — limited career options, economic downturns, and the pressure to leave home in search of better opportunities — are not unique to that region. Here in Texas, particularly in our rural areas and economically challenged neighborhoods, many young people face similar hurdles. But what if we could offer them the same kind of opportunities that CNX is providing in Appalachia?

At a recent graduation event held at PNC Park in Pittsburgh, the impact of the CNX Mentorship Academy was evident. The students who graduated that day were not just receiving diplomas; they were stepping into new careers and brighter futures. These young people, who had once been uncertain about their paths, are now equipped with the skills and confidence to succeed in high-paying jobs within their own communities.

One of the key takeaways from CNX’s approach is the importance of exposure. In many cases, students simply aren’t aware of the opportunities that exist in their own backyard. As industries like coal and automotive have declined in Appalachia, many young people believed their only option was to leave the region or settle for low-paying jobs. The shale revolution, however, has brought new life to the area, particularly in the energy sector. CNX recognized this and decided to use it as a platform to uplift the next generation.

The Mentorship Academy targets students who might not be on the traditional college-bound track. These are the kids who show up to school every day but don’t necessarily have a clear direction. This approach has allowed the program to tap into the potential of students who might otherwise be overlooked.

What truly sets the CNX Mentorship Academy apart is its hands-on approach. The students don’t just learn about career opportunities; they experience them. Whether it’s through site visits, internships, or working directly with mentors from companies like Evolution and CNX, these young people are getting a real taste of what their future could look like. “It's all about exposure. Like, you know, we can pour all the money into the schools you want... but if they don't have the opportunities to actually see it for themselves, experience it for themselves, it doesn't stick,” another speaker emphasized at the event.

The success stories coming out of the CNX Mentorship Academy are inspiring. One graduate, who initially entered the program disengaged and uncertain, has since become one of its biggest advocates. After securing a job with his preferred company, he’s now leading the charge in getting other students involved, showcasing his newfound leadership skills. “You can have multiple dreams... It's just, you know, being willing to take a risk, step outside and try something new,” he said, reflecting on his journey.

For Houston and Texas as a whole, the CNX Mentorship Academy offers a model worth emulating. The program’s success lies not just in its ability to place students in jobs, but in its focus on preparing them for careers that provide stability and growth. By connecting students with local industries and giving them the tools they need to succeed, CNX is helping to ensure that the next generation of workers is both capable and motivated.

The best part? The CNX Mentorship Academy’s blueprint is open-source, designed to be replicated in other regions. “There is no secret sauce. Everything is wide open... So this can be copied and scaled in Colorado or in Texas or anywhere else where you would want to duplicate this,” the program leaders shared.

As Houston continues to grow and evolve, programs like the CNX Mentorship Academy offer a valuable lesson: success isn’t just about getting a job; it’s about building a career and a future that benefits both the individual and the community. By adopting and adapting this model, we can create similar opportunities for our own youth, ensuring that they too have the chance to stay and thrive in their own backyards.

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Julie McLelland is co-founder and head of product at Digital Wildcatters, a Houston-based company creating and cultivating a community for the next generation of energy professionals.

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