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4 Houston energy execs sound off on future workforce, collaboration, and more at OTC

overheard

In a series of fireside chats, Houston energy leaders took the stage at OTC to discuss what their companies are doing in the energy transition space. Photo via LinkedIn

In addition to the massive exhibit floor, networking, and panels, the 2024 Offshore Technology Conference hosts thoughtful fireside chats with energy leaders throughout the ongoing conference taking place in Houston this week.

Four energy leaders from Houston took the stage to discuss what their companies are doing within the energy transition. Take a look at what topics each of the conversations tackled.

Chris Powers, vice president of CCUS at Chevron New Energies, on energy evolution and collaboration

Chris Powers introduced Chevron New Energies, an organization within Chevron that launched in 2021, to the crowd at OTC, describing the entity's focus points as CCUS, hydrogen, offsets and emerging technology, and renewable fuels — specifically things Chevron believes it has the competitive advantage.

One of the things Powers made clear in his fireside chat is that it's not going to be one, two, or even three technologies to significantly move the energy transition along, "it's going to take all the solutions to meet all the growing energy needs," he said.

And, he continued, this current energy transition the world is in isn't exactly new.

"We've been evolving our energy supply since the dawn of man," he said. "Our view is that the world has always been in an energy evolution."

"Hydrocarbons will continue to play a huge role in the years to come, and anyone who has a different view on that I think isn't being pragmatic," he continued.

Chevron has played a role in the clean energy market for decades, Powers said, pointing out Chevron Technology Ventures, which launched in the 1990s.

"No one can do this alone," he said, pointing specifically to the ongoing Bayou Bend joint venture that Chevron is working on with Equinor and TotalEnergies. "We have to bring together the right partners and the right skill sets."

Celine Gerson, group director, Americas, and president at Fugro USA, on the importance of data

Celine Gerson set the scene for Fugro, a geo data and surveying company that diversified its business beginning in 2015 to account for the energy transition. From traditional oil and gas to renewables, "it starts with the geo data," she said during her chat. She said big projects can't map out their construction without it, and then, when it comes to maintaining the equipment, the geo data is equally important.

Another message Gerson wanted to convey is that the skill sets from traditional offshore services translate to renewables. Fugro's employee base has evolved significantly over the past few years, and Gerson said that 50 percent of the workforce was hired over the past five years and 85 percent of the leadership has changed in the past seven.

Agility is what the industry needs, Celine Gerson said, adding that the "industry need to move fast and, in order to move fast, we need to look at things differently.

Attilio Pisoni, CTO of oilfield services and equipment at Baker Hughes, on the future workforce

In addition to the world making changes toward sustainability, the energy industry is seeing a workforce evolution as well, Attilio Pisoni said during his fireside chat, adding that inspiring a workforce is key to retention and encouraging innovation.

"We have a challenge in attracting young people," Pisoni said. "To be successful, you have to have a purpose."

That purpose? Combating climate change. And that, Pisoni said, needs to be able to be quantified. "As a society over all, we need to have a standard of measurement and accuracy in reporting," he said.

To future engineers, Pisoni emphasized the importance of learning outside your specific niche.

"Having seen where the world is now, whatever you study, have a concept and understanding of the system as a whole," he said.

Erik Oswald, vice president of advocacy and policy development at ExxonMobil Low Carbon Solutions, on transferable skills from upstream

When he looks at renewables and new energy, Erik Oswald said he sees a significant similarity for the talent and skill sets required in upstream oil and gas.

"A lot of the same skills are coming into focus" within the energy transition," Oswald said, specifying CCS and upstream.

Even in light of the transferrable workforce, the industry faces needs to grow its workforce in a significant way to keep up with demand — and keeping in mind the younger generations coming onto the scene.

"We're talking about recreating the entire oil and gas industry," Oswald said on preparing the workforce for the future of the energy industry. "We have to do it, it's not an option."

The CERAWeek by S&P Global 2024 programming will reflect on the reality of the energy transition, including its progress in different regions and across industries, technologies, and politics. Photo by Natalie Harms/InnovationMap

CERAWeek 2024 returns to Houston to feature thought leadership on energy transition

coming soon

For the 42nd time, CERAWeek is convening energy leaders from around the world for a conference the week of March 18 — and the action will all take place in downtown Houston.

CERAWeek by S&P Global 2024, with its theme of "Multidimensional Energy Transition: Markets, climate, technology and geopolitics," will zero in on the world's journey to zero-carbon, specifically exploring "strategies for a multidimensional, multispeed and multifuel energy transition," according to a news release. The programming will reflect on the reality of the energy transition, including its progress in different regions and across industries, technologies, and politics.

This year, the event is chaired by Daniel Yergin, vice chairman of S&P Global and author of The New Map: Energy, Climate and the Clash of Nations.

“The increasing focus on energy transition following COP28 coincides with a growing realization of just how complex the road ahead will be,” Yergin says in the release. “Expectations of a linear path to Net-zero are giving way to recognition that this will be a multidimensional energy transition—one that is inclusive of different situations in different parts of the world and takes into account energy security and affordability.

"The reality of a multispeed transition presents both opportunities and challenges," he continues. "Meeting those challenges, and realizing the promise, of the new energy future will be the focus of the world’s energy leaders at CERAWeek 2024 in Houston.”

CERAWeek's key themes this year tackle everything from power markets and minerals to geopolitics and tech and innovation.

The CERAWeek Innovation Agora track, which is the program's deeper dive into technology and innovation will feature thought leadership "ranging across AI, decarbonization, low carbon fuels, cybersecurity, hydrogen, nuclear, mining and minerals, mobility, automation, and more," per the release.

Additionally, the “Agora Hubs,” which are dedicated areas focused on climate, hydrogen, and carbon, have returned to an expanded capacity.

The full list of CERAWeek 2024 speakers is available online, as is registration.

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Constellation and Calpine's $26B clean energy megadeal clears final regulatory hurdle

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Baltimore-based nuclear power company Constellation Energy Corp. received final regulatory clearance this month to acquire Houston-based Calpine Corp. for a net purchase price of $26.6 billion.

The acquisition has the potential to create America’s “largest clean energy provider,” the companies reported when the deal was first announced in January.

The Department of Justice approved the acquisition contingent on Calpine divesting several assets, including one in the Houston area.

The company agreed to divest the Jack Fusco Energy Center natural gas-fired combined cycle facility in Richmond, Texas; four generating assets in the Mid-Atlantic region; and other natural gas plants in Pennsylvania and Corpus Christi, Texas.

The Federal Energy Regulatory Commission, the Public Utility Commission of Texas and the New York Public Service Commission previously approved the deal. The companies can move toward closing the acquisition once the court finalizes the stipulation and order.

"We are very pleased to reach a settlement that allows us to bring together two magnificent companies to create a new Constellation with unprecedented scale, talent and capability to better serve our customers and communities while building the foundation for America’s next great era of growth and innovation," Joe Dominguez, president and CEO of Constellation, said in a news release. "We thank the Department for its professionalism and tireless work reviewing this transaction through these many months. It’s now time for us to complete the transaction, welcome our new colleagues from Calpine, and together begin our journey to light the way to a brilliant tomorrow for all."

Andrew Novotny, CEO of Calpine, will continue to lead the Calpine business and Constellation's fleet of natural gas, hydro, solar and wind generation, according to the company. He will report to Dominguez and also serve as senior executive vice president of Constellation Power Operations.

Constellation is considered one of the top clean energy producers in the U.S. Earlier this month, the company was approved to receive a $1 billion loan from the Department of Energy's Energy Dominance Financing Program to restart its 835-megawatt nuclear reactor in Pennsylvania known as Crane Clean Energy Center.

"Work to restart the reactor comes at a time of unprecedented electric demand growth from electrification and the new data centers needed to support a growing digital economy and to help America win the AI race," a news release from the company reads. "Crane will support grid stability by delivering reliable, around-the-clock electric supply."

States brace for Trump's push to make oil drilling cheap again

Energy news

A Republican push to make drilling cheaper on federal land is creating new fiscal pressure for states that depend on oil and gas revenue, most notably in New Mexico as it expands early childhood education and saves for the future.

The shift stems from the sweeping law President Donald Trump signed in July that rolls back the minimum federal royalty rate to 12.5%. That rate — the share of production value companies must pay to the government — held steady for a century under the 1920 Mineral Leasing Act. It was raised to 16.7% under the Biden administration in 2022.

Trump and Republicans in Congress say the rate reset will boost energy production, jobs and affordability as the administration clears the way for expanded drilling and mining on public lands.

States receive nearly half the money collected through federal royalties, depending on where production takes place. The environment and economics research group Resources for the Future estimates a roughly $6 billion drop in collections over the coming decade.

The stakes are highest in New Mexico, the largest recipient of federal mineral lease payments. The state could could forgo $1.7 billion by 2035 and as much as $5.1 billion by 2050, according to calculations by economist Brian Prest at Resources for the Future.

More than one-third of the general fund budget in the Democratically-led state is tied to the oil and gas industry.

“New Mexico’s impact is way bigger than Wyoming or Colorado or North Dakota,” Prest said, “and that’s just because that’s where the action is on new development.”

The effects will unfold gradually, since federal leases allow a 10-year window to begin drilling and production. Still, state officials say they're already prepping for leaner years.

“It all hurts when you’re losing revenues," said Democratic state Sen. George Muñoz of Gallup, who said lawmakers still hope to invest more in mental health care and support Medicaid, even if federal royalty payments decline. “We’ve learned that until the chicken’s got feathers, we’re not even looking at it."

The higher federal royalty rate was in place for roughly three years while leasing activity was muted, Prest said. New Mexico budget forecasters never tallied the additional income.

New Mexico's nest-egg strategy

A nearly five-fold surge in local oil production since 2017 on federal and state land in New Mexico delivered a financial windfall for state government, helping fund higher teacher salaries, tuition-free college, universal free school meals and more.

The state set aside billions of dollars in investment trusts for future spending in case the world’s thirst for oil falters, including a early childhood education fund to help expand preschool, child care subsidies and home wellness visits for pregnancies and infants.

The state's investment nest egg has grown to $64 billion, second only to Alaska's Permanent Fund. Earnings from the trusts are New Mexico's second-biggest source for general fund spending.

That sturdy financial footing shaped a defiant response to this year’s federal government shutdown, when lawmakers voted to subsidize the state’s Affordable Care Act exchange, cover food assistance and backfill cuts to public broadcasting.

But lawmakers reviewing state finances learned that predictable income fell 1.6% — the first contraction since the start of the COVID-19 pandemic.

Muñoz said matters would be worse if the state had not raised its own royalty rates this year to 25%, from 20%, for new leases on prime oil and gas tracts, while ending a sales moratorium, under legislation he co-sponsored this year.

Encouraged in Alaska

After New Mexico, the states receiving the most federal oil and gas royalties are Wyoming, Louisiana, North Dakota and Texas.

Texas, the nation’s top oil producer, shares the bountiful Permian Basin with New Mexico but has far less federal land and therefore less exposure to changes in royalty policy.

In Alaska, state officials say they are encouraged by the royalty cut, seeing potential for increased development in places like the National Petroleum Reserve-Alaska, where the massive Willow project — approved in 2023 and now under development — is viewed by some as a catalyst for further activity. The reserve is expected to hold its first lease sales since 2019.

“If reduced federal royalty rates stimulate new leasing, exploration and production, that also could increase other kinds of revenue,” said Lorraine Henry, a spokesperson for Alaska’s Department of Natural Resources.

In North Dakota, federal royalties are split evenly between the state and county governments where drilling occurs. State Office of Management and Budget Director Joe Morrissette said the industry’s future remains difficult to forecast.

“There are so many variables, including timing, price, availability of desirable tracts, and federal policies regarding exploration activities,” Morrissette said.

Houston energy tech company breaks ground on low-cost green hydrogen pilot plant

coming soon

Houston’s Lummus Technology and Advanced Ionics have broken ground on their hydrogen pilot plant at Lummus’ R&D facility in Pasadena.

The plant will support Advanced Ionics’ cutting-edge electrolyzer technology, which aims to deliver high-efficiency hydrogen production with reduced energy requirements.

“By demonstrating Advanced Ionics’ technology at our state-of-the-art R&D facility, we are leveraging the expertise of our scientists and R&D team, plus our proven track record of developing breakthrough technologies,” Leon de Bruyn, president and CEO of Lummus, said in a news release. “This will help us accelerate commercialization of the technology and deliver scalable, cost-effective and sustainable green hydrogen solutions to our customers.”

Advanced Ionics is a Milwaukee-based low-cost green hydrogen technology provider. Its electrolyzer converts process and waste heat into green hydrogen for less than a dollar per kilogram, according to the company. The platform's users include industrial hydrogen producers looking to optimize sustainability at an affordable cost.

Lummus, a global energy technology company, will operate the Advanced Ionics electrolyzer and manage the balance of plant systems.

In 2024, Lummus and Advanced Ionics established their partnership to help advance the production of cost-effective and sustainable hydrogen technology. Lummus Venture Capital also invested an undisclosed amount into Advanced Ionics at the time.

“Our collaboration with Lummus demonstrates the power of partnerships in driving the energy transition forward,” Ignacio Bincaz, CEO of Advanced Ionics, added in the news release. “Lummus serves as a launchpad for technologies like ours, enabling us to validate performance and integration under real-world conditions. This milestone proves that green hydrogen can be practical and economically viable, and it marks another key step toward commercial deployment.”

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