Houston energy expert: How the U.S. can turn carbon into growth

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Greenhouse gases continue to rise, and the challenges they pose are not going away. Photo via Getty Images

For the past 40 years, climate policy has often felt like two steps forward, one step back. Regulations shift with politics, incentives get diluted, and long-term aspirations like net-zero by 2050 seem increasingly out of reach. Yet greenhouse gases continue to rise, and the challenges they pose are not going away.

This matters because the costs are real. Extreme weather is already straining U.S. power grids, damaging homes, and disrupting supply chains. Communities are spending more on recovery while businesses face rising risks to operations and assets. So, how can the U.S. prepare and respond?

The Baker Institute Center for Energy Studies (CES) points to two complementary strategies. First, invest in large-scale public adaptation to protect communities and infrastructure. Second, reframe carbon as a resource, not just a waste stream to be reduced.

Why Focusing on Emissions Alone Falls Short

Peter Hartley argues that decades of global efforts to curb emissions have done little to slow the rise of CO₂. International cooperation is difficult, the costs are felt immediately, and the technologies needed are often expensive. Emissions reduction has been the central policy tool for decades, and it has been neither sufficient nor effective.

One practical response is adaptation, which means preparing for climate impacts we can’t avoid. Some of these measures are private, taken by households or businesses to reduce their own risks, such as farmers shifting crop types, property owners installing fire-resistant materials, or families improving insulation. Others are public goods that require policy action. These include building stronger levees and flood defenses, reinforcing power grids, upgrading water systems, revising building codes, and planning for wildfire risks. Such efforts protect people today while reducing long-term costs, and they work regardless of the source of extreme weather. Adaptation also does not depend on global consensus; each country, state, or city can act in its own interest. Many of these measures even deliver benefits beyond weather resilience, such as stronger infrastructure and improved security against broader threats.

McKinsey research reinforces this logic. Without a rapid scale-up of climate adaptation, the U.S. will face serious socioeconomic risks. These include damage to infrastructure and property from storms, floods, and heat waves, as well as greater stress on vulnerable populations and disrupted supply chains.

Making Carbon Work for Us

While adaptation addresses immediate risks, Ken Medlock points to a longer-term opportunity: turning carbon into value.

Carbon can serve as a building block for advanced materials in construction, transportation, power transmission, and agriculture. Biochar to improve soils, carbon composites for stronger and lighter products, and next-generation fuels are all examples. As Ken points out, carbon-to-value strategies can extend into construction and infrastructure. Beyond creating new markets, carbon conversion could deliver lighter and more resilient materials, helping the U.S. build infrastructure that is stronger, longer-lasting, and better able to withstand climate stress.

A carbon-to-value economy can help the U.S. strengthen its manufacturing base and position itself as a global supplier of advanced materials.

These solutions are not yet economic at scale, but smart policies can change that. Expanding the 45Q tax credit to cover carbon use in materials, funding research at DOE labs and universities, and supporting early markets would help create the conditions for growth.

Conclusion

Instead of choosing between “doing nothing” and “net zero at any cost,” we need a third approach that invests in both climate resilience and carbon conversion.

Public adaptation strengthens and improves the infrastructure we rely on every day, including levees, power grids, water systems, and building standards that protect communities from climate shocks. Carbon-to-value strategies can complement these efforts by creating lighter, more resilient carbon-based infrastructure.

CES suggests this combination is a pragmatic way forward. As Peter emphasizes, adaptation works because it is in each nation’s self-interest. And as Ken reminds us, “The U.S. has a comparative advantage in carbon. Leveraging it to its fullest extent puts the U.S. in a position of strength now and well into the future.”

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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 appeared on LinkedIn.

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A key threshold for limiting global warming will be nearly unavoidable, scientists say. Photo via Pexels

Scientists warn greenhouse gas accumulation is accelerating and more extreme weather will come

Climate Report

Humans are on track to release so much greenhouse gas in less than three years that a key threshold for limiting global warming will be nearly unavoidable, according to a study released June 19.

The report predicts that society will have emitted enough carbon dioxide by early 2028 that crossing an important long-term temperature boundary will be more likely than not. The scientists calculate that by that point there will be enough of the heat-trapping gas in the atmosphere to create a 50-50 chance or greater that the world will be locked in to 1.5 degrees Celsius (2.7 degrees Fahrenheit) of long-term warming since preindustrial times. That level of gas accumulation, which comes from the burning of fuels like gasoline, oil and coal, is sooner than the same group of 60 international scientists calculated in a study last year.

“Things aren’t just getting worse. They’re getting worse faster,” said study co-author Zeke Hausfather of the tech firm Stripe and the climate monitoring group Berkeley Earth. “We’re actively moving in the wrong direction in a critical period of time that we would need to meet our most ambitious climate goals. Some reports, there’s a silver lining. I don’t think there really is one in this one.”

That 1.5 goal, first set in the 2015 Paris agreement, has been a cornerstone of international efforts to curb worsening climate change. Scientists say crossing that limit would mean worse heat waves and droughts, bigger storms and sea-level rise that could imperil small island nations. Over the last 150 years, scientists have established a direct correlation between the release of certain levels of carbon dioxide, along with other greenhouse gases like methane, and specific increases in global temperatures.

In Thursday's Indicators of Global Climate Change report, researchers calculated that society can spew only 143 billion more tons (130 billion metric tons) of carbon dioxide before the 1.5 limit becomes technically inevitable. The world is producing 46 billion tons (42 billion metric tons) a year, so that inevitability should hit around February 2028 because the report is measured from the start of this year, the scientists wrote. The world now stands at about 1.24 degrees Celsius (2.23 degrees Fahrenheit) of long-term warming since preindustrial times, the report said.

Earth's energy imbalance

The report, which was published in the journal Earth System Science Data, shows that the rate of human-caused warming per decade has increased to nearly half a degree (0.27 degrees Celsius) per decade, Hausfather said. And the imbalance between the heat Earth absorbs from the sun and the amount it radiates out to space, a key climate change signal, is accelerating, the report said.

“It's quite a depressing picture unfortunately, where if you look across the indicators, we find that records are really being broken everywhere,” said lead author Piers Forster, director of the Priestley Centre for Climate Futures at the University of Leeds in England. “I can't conceive of a situation where we can really avoid passing 1.5 degrees of very long-term temperature change.”

The increase in emissions from fossil-fuel burning is the main driver. But reduced particle pollution, which includes soot and smog, is another factor because those particles had a cooling effect that masked even more warming from appearing, scientists said. Changes in clouds also factor in. That all shows up in Earth’s energy imbalance, which is now 25% higher than it was just a decade or so ago, Forster said.

Earth’s energy imbalance “is the most important measure of the amount of heat being trapped in the system,” Hausfather said.

Earth keeps absorbing more and more heat than it releases. “It is very clearly accelerating. It’s worrisome,” he said.

Crossing the temperature limit

The planet temporarily passed the key 1.5 limit last year. The world hit 1.52 degrees Celsius (2.74 degrees Fahrenheit) of warming since preindustrial times for an entire year in 2024, but the Paris threshold is meant to be measured over a longer period, usually considered 20 years. Still, the globe could reach that long-term threshold in the next few years even if individual years haven't consistently hit that mark, because of how the Earth's carbon cycle works.

That 1.5 is “a clear limit, a political limit for which countries have decided that beyond which the impact of climate change would be unacceptable to their societies,” said study co-author Joeri Rogelj, a climate scientist at Imperial College London.

The mark is so important because once it is crossed, many small island nations could eventually disappear because of sea level rise, and scientific evidence shows that the impacts become particularly extreme beyond that level, especially hurting poor and vulnerable populations, he said. He added that efforts to curb emissions and the impacts of climate change must continue even if the 1.5 degree threshold is exceeded.

Crossing the threshold "means increasingly more frequent and severe climate extremes of the type we are now seeing all too often in the U.S. and around the world — unprecedented heat waves, extreme hot drought, extreme rainfall events, and bigger storms,” said University of Michigan environment school dean Jonathan Overpeck, who wasn't part of the study.

Andrew Dessler, a Texas A&M University climate scientist who wasn't part of the study, said the 1.5 goal was aspirational and not realistic, so people shouldn’t focus on that particular threshold.

“Missing it does not mean the end of the world,” Dessler said in an email, though he agreed that “each tenth of a degree of warming will bring increasingly worse impacts.”

A new initiative from federal agencies hopes to enhance access to information about greenhouse gas emissions. Photo via nasa.gov

NASA, EPA share plans for greenhouse gas initiative at COP28

need some space

Two of Houston's top industries are in for a collaboration of sorts, according to a recent announcement at the 28th annual United Nations Climate Conference, or COP28.

NASA, the United States Environmental Protection Agency, and other U.S. agencies have unveiled the plans for the U.S. Greenhouse Gas Center, a hub for collaboration for the federal agencies and nonprofit and private sector partners.

“NASA data is essential to making the changes needed on the ground to protect our climate. The U.S. Greenhouse Gas Center is another way the Biden-Harris Administration is working to make critical data available to more people – from scientists running data analyses, to government officials making decisions on climate policy, to members of the public who want to understand how climate change will affect them,” NASA Administrator Bill Nelson says in a news release. “We’re bringing space to Earth to benefit communities across the country.”

NASA is taking the lead implementing agency position for the new center, which will be run by Argyro Kavvada, center program manager, who's based in NASA headquarters in Washington. The EPA, the National Institute of Standards and Technology, and the National Oceanic and Atmospheric Administration will also be involved and provide greenhouse gas datasets and analysis tools.

“A goal of the U.S. Greenhouse Gas Center is to accelerate the collaborative use of Earth science data,” Kavvada says. “We’re working to get the right data into the hands of people who can use it to manage and track greenhouse gas emissions.”

The center’s data catalog will be available online and target three areas: greenhouse gas emissions from humans, naturally occurring greenhouse gas emissions, and large methane emission event identification and quantification from aircraft and space-based data.

According to the release, the center is one piece of the current administration's effort to amplify information on greenhouse gas emissions, as outlined in the recently released National Strategy to Advance an Integrated U.S. Greenhouse Gas Measurement, Monitoring, and Information System.

Lignium combats greenhouse gasses with a green fuel that boasts an enviably low carbon footprint. Photo courtesy of Lignium

Why this growing Chilean clean energy company moved its HQ to Houston

future of farming

In Houston, air pollution is usually more of an abstract concept than a harsh reality. But in parts of Chile, the consequences of heating homes with wet wood are catching up to residents.

“Given all the contamination, there are times kids aren’t allowed to go to school. The air pollution is really affecting people’s health,” says Agustín Ríos, COO of Lignium Energy.

Additionally, the methane and nitrous oxide produced by cattle farming are a problem. But Lignium Energy, an international company started in Chile and now headquartered in Houston’s Greentown Labs, has a solution that can solve both problems by upending the latter.

“There’s a lack of solutions with the problem of manure. Methane gases are destroying our planet,” says CEO and co-founder Enrique Guzmán. He goes on to say that most solutions currently being developed are expensive and complex. But not Lignium Energy’s method, invented by co-founder José Antonio Caraball.

Caraball has patented an extraordinarily simple concept. Lignium separates the solid from liquid excretions, then cleans the solid to generate a hay-like biomass. Biomass refers to organic matter that can be used as fuel. What Lignium makes from the cattle evacuations is a clean, odorless and highly calorific biomass.

Essentially, Lignium combats greenhouse gasses with a green fuel that boasts an enviably low carbon footprint. “Our process is very cheap and very simple. That’s why we are a great solution,” explains Guzmán.

Caraball, an industrial engineer, came up with the idea six years ago, says Guzmán. Five years ago, he began working with the company, one year ago, Guzmán and Ríos picked up and moved to Houston.

“We decided to move out of Chile due to market size,” says Ríos. However, the product is already being sold to consumers in its homeland.

Why Houston? The reason was twofold. As an energy company, Ríos says that they wanted to be in “the energy capital of the world.” But Texas is also one of the largest sites of cattle farming on the planet. Lignium prefers to work with farms with more than 500 head to optimize harvesting the waste that becomes biomass.

With that in mind, Lignium has partnered with Southwest Regional Dairy Center in Stephenville, Texas, a little more than an hour southwest of Fort Worth, a town known as the world’s rodeo capital. The facility is associated with Texas A&M, though Guzmán says Lignium is not officially associated with the university.

Guzmán says that the company is currently hiring a team member to help Lignium figure out commercial logistics, as well as four or five other Houstonians who will help them take their product to market in the United States, and eventually around the globe. For now, he predicts that they will be able to sell to consumers in this country by early next year, if not the fourth quarter of 2023.

“We are very committed to the solution because, at the end of the day, if we do good work with the company, we are sure we can give better conditions to the cattle industry,” says Guzmán. “Then we can make a big impact on a real problem.

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This article originally ran on InnovationMap.

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7+ must-attend Houston energy transition events for August 2026

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Editor's note: The second half of August has a full calendar of large-scale events and exhibitions, annual conferences, and more. Mark your calendars for these top Houston energy transition events taking place in August, and begin registering today.

August 17-20: IMAGE '26

Co-hosted by SEG and AAPG, the International Meeting for Applied Geoscience and Energy event (IMAGE '26) is the world’s premier gathering for geoscientists, energy professionals, and industry leaders to connect and innovate. A global audience from all sectors of geosciences and energy come together in Houston to collaborate and network through a comprehensive technical program with more than 1,100 presentations, engaging panel discussions, hands-on workshops and courses, and a unique exhibition experience.

This event begins August 17 at George R. Brown Convention Center. Register here.

August 18: Real Impact

The Renewable Energy Alliance of Houston for Real Impact 2026, the annual conference bringing together energy industry leaders, policymakers, business professionals, and community stakeholders to discuss the future of clean energy, infrastructure, innovation, and economic growth. This year's keynote speaker is Jason Ryan, executive vice president of regulatory services and government affairs at CenterPoint Energy. The conference concludes with a networking reception providing attendees an opportunity to continue the conversation and build new connections.

This event begins August 18 at 10 am, and space is limited. Register here.

August 18-19: AVEVA Day Energy & EPC

AVEVA Day Energy & EPC brings together 400+ leaders and experts from the oil & gas, energy, chemicals, and EPC industries. Attendees will connect with peers facing similar challenges, learn from real customer stories, and discover how companies are accelerating operations with AI and industrial intelligence.

This event begins August 18 at Westin Houston Memorial City. Register here.

August 26: Global Energy Summit

The fourth annual Global Energy Summit is where geopolitics meets the grid. The summit will feature DNV’s Global Energy Outlook, a long-range global and regional energy forecast shaping the trajectory of markets, security, and sustainability through 2060. These remarks will be followed by three panels covering global energy supply chains, Latin America's rising, and the future of global energy security in the age of AI. Closing remarks will be by Robert Bryce, a veteran author and journalist, who explores the intersection of energy, policy, and innovation.

This event. begins at 1 pm on August 26 at Amegy Bank Tower. Register here.

August 26-27: Texas Energy Forum 2026

Organized by U.S. Energy Stream, the 2026 conference will focuses on the theme, "AI Runs on Texas Energy: How Texas and Alberta Are Powering the AI Revolution." The forum brings together U.S. Senators, members of Congress, senior government officials, and leaders from the energy, technology, manufacturing, and financial sectors for candid discussions on the energy, infrastructure, and technological advancements required to power the AI revolution and strengthen American competitiveness.

This event begins August 26 at the Petroleum Club of Houston. Register here.

August 27: TXOGA Energy Elevated Technology Showcase

This annual event highlights innovative technologies aimed at enhancing efficiency, sustainability, and safety within the oil and natural gas industry. The showcase brings together entrepreneurs, startups, and established companies to present their technologies and solutions that address challenges faced by the energy sector.

This event takes place August 27 at Hyatt Regency Houston. Register here.

August 28: Chevron Innovation Competition- Final Round

The University of Houston presents the 5th Annual Chevron Innovation Commercialization Competition. This dynamic event empowers students to transform their cutting-edge energy research into real-world solutions. The event is sponsored by Chevron and organized by UH Energy.

This event begins August 28 at 2 pm on the UH campus. Register here.

Major Houston-based oil companies report massive profits in Q2 2026

Profit Report

American oil and gas giants raked in massive spring profits while fighting between Iran and the U.S. impeded petroleum shipments and consumers around the world paid more for fuel and confronted shortages.

The conflict, now in its sixth month, halted most shipping through the Strait of Hormuz, a narrow waterway that previously served as a delivery route for a fifth of the world's oil and natural gas. With global supplies constrained, prices for Brent crude, the international standard, soared from about $70 to above $100 a barrel for much of March, April and May, and at one point reached $126.

The money that oil companies accrued between the beginning of April and the end of June could receive extra scrutiny this year. Gasoline, diesel and jet fuel prices climbed sharply during that period, increasing costs for drivers and airline passengers. Supplies ran low in some countries, leading to sporadic fuel rationing in Australia and government office closures in Nepal and Sri Lanka.

Spring, Texas-based Exxon Mobil reported that its second quarter profits doubled to $14.53 billion, boosted by record diesel production. The oil giant brought in $116.02 billion in revenue, up 42%.

Chevron, based in Houston, nearly quadrupled its profits to $12.07 billion and revenue jumped 56% to $70.06 billion.

Six of Europe’s largest oil companies posted combined first-quarter profits of $22 billion, more than 40% higher than last year.

“There are constituencies around the world who are having a very good crisis, and the oil producers are one of them,” said Patrick Galey, fossil fuels lead at Global Witness, a nonprofit organization that investigates environmental issues. “When you compare that to the hundreds of millions of people who are struggling with rolling blackouts, with electricity curbs, rationing, waiting in line for food queues, or the disruption to fertilizers and the potential impact that that has on food prices, we don’t think that it’s a justifiable price for the rest of the world to be paying.”

Lawmakers propose taxing major oil producers for war windfalls

Energy companies such as Exxon and Chevron do not set the price of American oil, which ricocheted from $68 to $115 a barrel during the quarter. It’s driven by supply and demand, and what traders, refiners and other buyers are willing to pay.

Nevertheless, Democrats in Congress introduced bills in March to tax major oil producers for profits they show from 2026 onward and have the tax proceeds redistributed to consumers.

“It’s fair to put a windfall profits tax on inordinate windfall profits rather than cut off children’s food programs,” Sen. Sheldon Whitehouse, a Rhode Island Democrat who introduced the Senate version of the legislation.

Whitehouse's measure and a companion bill introduced by U.S. Rep. Ro Khanna of California would amend the U.S. tax code to impose a per-barrel tax on companies that produced or imported at least 300,000 barrels of oil per day in 2025.

“We cracked $4 again per gallon last weekend in gas stations that I drove by, and that’s a big expense, particularly for families that get their income from driving around from job to job in the work van or the work truck,” Whitehouse said.

The average price for a gallon of regular gasoline in the U.S., which was below $3 before the U.S. and Israel launched attacks on Iran, reached $4.11 Friday, July 31, about $1 more than last year at this time.

The UK and other European countries implemented temporary windfall profits taxes on fossil fuel companies in 2022. The UK extended that to 2030, according to Tax Foundation Europe.

“Penalizing the businesses who stood by those countries and provided that product going forward is very short-sighted,” Exxon CEO Darren Woods said in a call with investors Friday. “We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax.”

Refineries rake in cash while consumers pay more for fuel

Outfits such as Exxon and Chevron, which also own refineries, are in the best position to profit from the current market conditions, said Tom Seng, assistant professor of energy finance at Texas Christian University.

Refineries turn oil into gasoline, diesel, jet fuel and home heating oil. Higher prices for those products meant Chevron’s quarterly refinery profit was six times as big in 2026, despite processing less crude and selling less products.

“The return on refining, on a percentage basis, has skyrocketed,” Seng said. “Oil right now is priced what it is priced because of the Iran war. But in the meantime, the refineries are making money hand over fist.”

The global refining market is under-supplied, and with countries such as Russia and China no longer exporting, companies like Exxon and Chevron have to pick it up, said Rob Thummel, senior portfolio manager at Tortoise Capital. “The world is going to be short jet fuel, diesel and gasoline, so we’ll probably continue to see higher profits there.”

Globally, not all refineries have been able to get the supply of crude oil they need to meet demand since the conflict began, said Timothy Fitzgerald, a University of Tennessee professor of business economics who studies the petroleum industry.

As a result, refineries that have ample oil to work with, including those in the U.S., are turning high profits, particularly when they make jet fuel and diesel, which is priced about 41% higher in the U.S. than before the Strait of Hormuz was blocked.

"If you’re a company that owns a bunch of refinery capacity, things look pretty good," Fitzgerald said.

American refineries are running at near-full capacity and poised to benefit because some refineries in the Middle East and Russia were damaged. And Asia can't get the amount of Middle East oil needed for refining.

“Ultimately, users of the energy services pay,” Fitzgerald said. “Consumers, people like you and me buying retail motor gasoline or diesel fuel or airplane tickets. But it also means that almost everything else we buy has an embedded energy content to it ... and this is where you start to worry about it driving increases in costs.”

Not all oil and gas companies benefit in the same way

In the present geopolitical environment, some companies are winners while others are losers, Fitzgerald said.

“If you’re a company like a U.S. (oil) producer, even a U.S.-based international company like an Exxon or Chevron who’s got lots of production outside the Gulf, things are good. You’re selling your product at a higher price,” he said.

But companies in the Middle East that are not able to benefit from higher prices because they are struggling to get their liquefied natural gas out of the Persian Gulf or have a lot of damaged oil fields or processing facilities have a very different take on recent events, Fitzgerald added.

“Your ability to sell anything and the volume that you may be getting out is so curtailed that your revenues are way down and you’re incurring higher transportation costs and security costs,” he said.

Exxon and Chevron weren’t as profitable in the first quarter due to the way oil is traded; the first real opportunity they had to take advantage of higher prices oil was in April. Companies that had a lot of oil stored in floating tankers and available for spot-market trading, including some European ones, were able to benefit from March’s higher oil prices, Seng said.

Alabama-based renewable fuels company to move HQ to Houston

welcome to houston

An Alabama-based clean tech company is moving its headquarters to Houston.

Alléo Energy announced that it will move its headquarters from Bay Minette, Alabama, to Houston's Ion District. The company develops carbon-negative fuels and renewable commodities through its conversion technology that turns wood waste and cellulosic feedstocks into high-energy, high-yield syngas.

The news comes after Alléo announced the appointment of Benjamin Cowart as its new CEO. Cowart will succeed Alléo founder Simeon Chow, who will serve as president.

“Ben doesn’t need to be sold on carbon-negative fuels; he’s already building in this exact space, and he’s thrived through some of the hardest conditions the industry has faced,” Chow said in a news release. “He knows how to scale and he knows the capital markets that finance them; he turns the hurdles that stall other companies into momentum. Bringing a leader of his caliber in as CEO is a defining, energizing moment.”

Cowart previously founded Houston-based renewables Vertex Energy Inc. The company went public on the Nasdaq exchange in 2009 through a reverse merger. He served as chairman and CEO of the company, which was later taken private by a consortium led by BlackRock.

Cowart also founded EVH Corp., a venture platform focused on building in hydrogen, methanol, sustainable aviation fuel (SAF), and low-carbon marine fuels.

“I’ve spent my career turning advanced process technology into high-performing enterprises that deliver both economic and environmental returns in an industry defined by headwinds,” Cowart added in the release. “The winners in energy transition aren’t the ones with the best headline; they’re the ones that keep their economics intact when subsidies move, feedstock prices swing, and capital gets expensive. Alléo is well-built for that. I’ve rarely seen a technology company this well positioned for what the market is demanding. The science is proven; now it’s about disciplined execution, financing, and building more plants. This is the work I love most.”

Alléo plans to scale its proprietary conversion technology. The company commissioned the first phase of its Alabama facility in 2023, which produced renewable diesel made entirely from wood waste, which could be converted to SAF.

The company says that it has $50 million invested in initial research and development, and that additional facilities are in the planning stages.

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