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Oil markets on edge: Geopolitics, supply risks, and what comes next

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What lies ahead over the next year? Photo via Getty Images

Oil prices are once again riding the waves of geopolitics. Uncertainty remains a key factor shaping global energy trends.

As of June 25, 2025, U.S. gas prices were averaging around $3.22 per gallon, well below last summer’s levels and certainly not near any recent high. Meanwhile, Brent crude is trading near $68 per barrel, though analysts warn that renewed escalation especially involving Iran and the Strait of Hormuz could push prices above $90 or even $100. Trump’s recent comments that China may continue purchasing Iranian oil add yet another layer of geopolitical complexity.

So how should we think about the state of the oil market and what lies ahead over the next year?

That question was explored on the latest episode of The Energy Forum with experts Skip York and Abhi Rajendran, who both bring deep experience in analyzing global oil dynamics.

“About 20% of the world’s oil and LNG flows through the Strait of Hormuz,” said Skip. “When conflict looms, even the perception of disruption can move the market $5 a barrel or more.”

This is exactly what we saw recently: a market reacting not just to actual supply and demand, but to perceived risk. And that risk is compounding existing challenges, where global demand remains steady, but supply has been slow to respond.

Abhi noted that U.S. shale production has been flat so far this year, and that given the market’s volatility, it’s becoming harder to stay short on oil. In his view, a higher price floor may be taking hold, with longer-lasting upward pressure likely if current dynamics continue.

Meanwhile, OPEC+ is signaling supply increases, but actual delivery has underwhelmed. Add in record-breaking summer heat in the Middle East, pulling up seasonal demand, and it’s easy to see why both experts foresee a return to the $70–$80 range, even without a major shock.

Longer-term, structural changes in China’s energy mix are starting to reshape demand patterns globally. Diesel and gasoline may have peaked, while petrochemical feedstock growth continues.

Skip noted that China has chosen to expand mobility through “electrons, not molecules,” a reference to electric vehicles over conventional fuels. He pointed out that EVs now account for over 50% of monthly vehicle sales, a signal of a longer-term shift in China’s energy demand.

But geopolitical context matters as much as market math. In his recent policy brief, Jim Krane points out that Trump’s potential return to a “maximum pressure” campaign on Iran is no longer guaranteed strong support from Gulf allies.

Jim points out that Saudi and Emirati leaders are taking a more cautious approach this time, worried that another clash with Iran could deter investors and disrupt progress on Vision 2030. Past attacks and regional instability continue to shape their more restrained approach.

And Iran, for its part, has evolved. The “dark fleet” of sanctions-evasion tankers has expanded, and exports are booming up to 2 million barrels per day, mostly to China. Disruption won’t be as simple as targeting a single export terminal anymore, with infrastructure like the Jask terminal outside the Strait of Hormuz.

Where do we go from here?

Skip suggests we may see prices drift upward through 2026 as OPEC+ runs out of spare capacity and U.S. shale declines. Abhi is even more bullish, seeing potential for a quicker climb if demand strengthens and supply falters.

We’re entering a phase where geopolitical missteps, whether in Tehran, Beijing, or Washington, can have outsized impacts. Market fundamentals matter, but political risk is the wildcard that could rewrite the price deck overnight.

As these dynamics continue to evolve, one thing is clear: energy policy, diplomacy, and investment strategy must be strategically coordinated to manage risk and maintain market stability. The stakes for global markets are simply too high for misalignment.

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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.

U.S. LNG is essential to balancing global energy markets for the decades ahead. Photo via Getty Images

Houston expert: The role of U.S. LNG in global energy markets

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The debate over U.S. Liquefied Natural Gas (LNG) exports is too often framed in misleading, oversimplified terms. The reality is clear: LNG is not just a temporary fix or a bridge fuel, it is a fundamental pillar of global energy security and economic stability. U.S. LNG is already reducing coal use in Asia, strengthening Europe’s energy balance, and driving economic growth at home. Turning away from LNG exports now would be a shortsighted mistake, undermining both U.S. economic interests and global energy security.

Ken Medlock, Senior Director of the Baker Institute’s Center for Energy Studies, provides a fact-based assessment of the U.S. LNG exports that cuts through the noise. His analysis, consistent with McKinsey work, confirms that U.S. LNG is essential to balancing global energy markets for the decades ahead. While infrastructure challenges and environmental concerns exist, the benefits far outweigh the drawbacks. If the U.S. fails to embrace its leadership in LNG, we risk giving up our position to competitors, weakening our energy resilience, and damaging national security.

LNG Export Licenses: Options, Not Guarantees

A common but deeply flawed argument against expanding LNG exports is the assumption that granting licenses guarantees unlimited exports. This is simply incorrect. As Medlock puts it, “Licenses are options, not guarantees. Projects do not move forward if they are unable to find commercial footing.”

This is critical: government approvals do not dictate market outcomes. LNG projects must navigate economic viability, infrastructure feasibility, and global demand before becoming operational. This reality should dispel fears that expanded licensing will automatically lead to an uncontrolled surge in exports or domestic price spikes. The market, not government restrictions, should determine which projects succeed.

Canada’s Role in U.S. Gas Markets

The U.S. LNG debate often overlooks an important factor: pipeline imports from Canada. The U.S. and Canadian markets are deeply intertwined, yet critics often ignore this reality. Medlock highlights that “the importance to domestic supply-demand balance of our neighbors to the north and south cannot be overstated.”

Infrastructure Constraints and Price Volatility

One of the most counterproductive policies the U.S. could adopt is restricting LNG infrastructure development. Ironically, such restrictions would not only hinder exports but also drive up domestic energy prices. Medlock’s report explains this paradox: “Constraints that either raise development costs or limit the ability to develop infrastructure tend to make domestic supply less elastic. Ironically, this has the impact of limiting exports and raising domestic prices.”

The takeaway is straightforward: blocking infrastructure development is a self-inflicted wound. It stifles market efficiency, raises costs for American consumers, and weakens U.S. competitiveness in global energy markets. McKinsey research confirms that well-planned infrastructure investments lead to greater price stability and a more resilient energy sector. The U.S. should be accelerating, not hindering, these investments.

Short-Run vs. Long-Run Impacts on Domestic Prices

Critics of LNG exports often confuse short-term price fluctuations with long-term market trends. This is a mistake. Medlock underscores that “analysis that claims overly negative domestic price impacts due to exports tend to miss the distinction between short-run and long-run elasticity.”

Short-term price shifts are inevitable, driven by seasonal demand and supply disruptions. But long-term trends tell a different story: as infrastructure improves and production expands, markets adjust, and price impacts moderate. McKinsey analysis suggests supply elasticity increases as producers respond to price signals. Policy decisions should be grounded in this broader economic reality, not reactionary fears about temporary price movements.

Assessing the Emissions Debate

The argument that restricting U.S. LNG exports will lower global emissions is fundamentally flawed. In fact, the opposite is true. Medlock warns against “engineering scenarios that violate basic economic principles to induce particular impacts.” He emphasizes that evaluating emissions must be done holistically. “Constraining U.S. LNG exports will likely mean Asian countries will continue to turn to coal for power system balance,” a move that would significantly increase global emissions.

McKinsey’s research reinforces that, on a lifecycle basis, U.S. LNG produces fewer emissions than coal. That said, there is room for improvement, and efforts should focus on minimizing methane leakage and optimizing gas production efficiency.

However, the broader point remains: restricting LNG on environmental grounds ignores the global energy trade-offs at play. A rational approach would address emissions concerns while still recognizing the role of LNG in the global energy system.

The DOE’s Commonwealth LNG Authorization

The Department of Energy’s recent conditional approval of the Commonwealth LNG project is a step in the right direction. It signals that economic growth, energy security, and market demand remain key considerations in regulatory decisions. Medlock’s analysis makes it clear that LNG exports will be driven by market forces, and McKinsey’s projections show that global demand for flexible, reliable LNG is only increasing.

The U.S. should not limit itself with restrictive policies when the rest of the world is demanding more LNG. This is an opportunity to strengthen our position as a global energy leader, create jobs, and ensure long-term energy security.

Conclusion

The U.S. LNG debate must move beyond fear-driven narratives and focus on reality. The facts are clear: LNG exports strengthen energy security, drive economic growth, and reduce global emissions by displacing coal.

Instead of restrictive policies that limit LNG’s potential, the U.S. should focus on expanding infrastructure, maintaining market flexibility, and supporting innovation to further reduce emissions. The energy transition will be shaped by market realities, not unrealistic expectations.

The U.S. has an opportunity to lead. But leadership requires embracing economic logic, investing in infrastructure, and ensuring our policies are guided by facts, not political expediency. LNG is a critical part of the global energy landscape, and it’s time to recognize its long-term strategic value.

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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.

Scott Nyquist on what the path to net-zero will look like. Graphic via mckinsey.com

Column: Houston expert on what the path to net-zero will look like

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The $275 trillion question: What does the road to net-zero look like?

That’s a good question, and McKinsey took a serious stab at providing an answer in a 2022 report, it considers the net-zero scenario described by the Network for Greening the Financial System (NGFS), a consortium of 105 central banks and financial institutions. McKinsey then describes the costs, benefits, and social and economic changes that would likely be required for the world to start, stay on, and finish the pathway described by the NGFS.

Here is what the report isn’t, and what it doesn’t do. It isn’t a roadmap to net zero, and it does not make predictions. Rather, it offers estimates related to one specific scenario. It does not say who should pay. It does not address adaptation. It doesn’t even assume that restricting global temperature rises to 1.5 degrees Celsius by 2050 is achievable. It doesn’t assert that this is the best or only way to of. Indeed, it notes that “it is likely that real outcomes will diverge from these estimates.”

What the report does do is more interesting: with rigor and thoughtfulness, it thinks through what a genuine, global effort to get to net zero would take. Here are a few insights from the report I found particularly noteworthy.

It won’t come cheap. Capital spending by 2050 under the NGFS scenario would add up to $275 trillion, or $9.2 trillion per year on average. That is about $3.5 trillion a year more than is being spent today, or the equivalent of about half of global corporate profits in 2020. In addition, about $1 trillion of current spending would need to shift from high- to low-emissions assets. In short, it’s a lot of money. Of course, some of these costs are also investments that will deliver returns, and indeed the share that do so will probably rise over the decades. Upfront spending now could also reduce operating costs down the line, through greater efficiency and lower maintenance costs. And it’s important to keep in mind the considerable benefit of a healthier planet and a stable climate, with cleaner air and richer land. But the authors do not shy away from the larger point: “Reaching net-zero emissions will thus require a transformation of the global economy.”

Some countries are going to be hit harder than others. It’s hardly surprising to read that countries like Saudi Arabia, Russia, and Venezuela, which rely heavily on oil and gas resources, are going to have a more difficult time adjusting. The same is true for many developing economies. To some extent their residents can leapfrog to cleaner, greener technologies, just as they skipped the landline in favor of cellphones. But other factors weigh in. For example, developing countries are more likely to have high-emissions manufacturing as a major share of the economy; services are generally lower emission. In addition, poorer countries still have to build much of their infrastructure, which is costly. All this adds up. The report estimates that India and sub-Saharan Africa would need to spend almost 11 percent of its GDP on physical assets related to energy and land to get to net zero; in other Asian countries and Latin America, it is more than 9 percent. For Europe and the United States, by contrast, the figure is about 6 percent.

Now is better than later. An orderly, gradual transition would likely be both gentler and cheaper than a hasty, disorderly one. The report sees spending as “frontloaded,” meaning that there is more of it in the next decade to 15 years, and then it declines. That is because of the need for substantial capital investment. But why does this matter? There is timing, for one thing. If low emissions sources do not increase as fast (or preferably faster) than high-emissions ones are retired, there will be shortages or price rises. Both would be unpleasant, and could also cut into public support for change. And then there is the matter of money. If a coal plant is built today—as many are—and then has to be shut down, abruptly and well before its useful life over, a lot of money that was invested in it will never be recouped. The report estimates that as much as $2.1 trillion assets in the power sector alone could be stranded by 2050. Many of these assets are capitalized on the balance sheets of listed companies; shutting them down prematurely could bring bankruptcies and credit defaults, and that could affect the global financial system.

The world would look very different. Under the NGFS scenario, oil and gas production volumes in 2050 would be 55 percent and 70 percent lower, respectively, and coal would just about vanish. The market share for battery or fuel cell-electric vehicles would be close to 100 percent. Many existing jobs would disappear, and because these assets tend to be geographically concentrated, the effects on local communities would be harsh. For example, more than 10 percent of jobs in 44 US counties are in the coal, oil and gas, fossil fuel power, and automotive sectors. On the whole, McKinsey estimates that the transition could mean the loss of 187 million jobs—but the creation of 202 million new ones. Reaching net zero would also make demands on individuals, such as switching to electric vehicles, making their homes more energy efficient, and eating less meat like beef and lamb (cows and sheep are ruminants, emitting methane, a greenhouse gas).

There’s a lot else worth thinking about in the report, which goes into some detail about forestry and agriculture, for example, as well as the role of climate finance and what can be done to fill technology gaps. And its closing sentence is worth pondering: “The key issue is whether the world can muster the requisite boldness and resolve to broaden its response during the next decade or so, which will in all likelihood decide the nature of the transition.”

So, is something like this going to happen? I don’t know. There is certainly momentum. As of January 27, 2022, 136 countries accounting for almost 90 percent of both emissions and GDP, have signed up to the idea. But these pledges are not cast in stone, or indeed in legislation, in many places, and as a rule policy is running far short of the promise. “Moving to action,” the report notes dryly, “has not proven easy or straightforward.”

And while some things can be done from the top down, others cannot—such as the considerable shift in human diets away from high-emissions (and delicious) beef and lamb and more toward poultry and legumes. Moreover, inertia and vested interests are powerful forces. “Government and business would need to act together with singular unity, resolve, and ingenuity, and extend their planning and investment horizons even as they take immediate actions to manage risks and capture opportunities,” the report concludes. That’s a big ask.

So, like McKinsey, I am not going to make predictions. But for an analysis of what it would take, this is a valuable effort.

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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 January 28, 2022.

Scott Nyquist on the future of technology and how they affect the energy industry. Photo via Getty Images

Houston expert: Where is tech going? And can the energy industry keep up?

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When smart people come together to consider the future, it’s worth listening to them.

Not long ago, McKinsey brought together more than 60 experts, and asked them to name the most important technology trends for business. They started from the premise that the next 10 years will see more technological progress than in the previous 100 years—and that this will up-end companies and industries everywhere.

“We believe the technology disruption over the next few years will be equal to the industrial revolution,” says Nicolaus Henke, a McKinsey alum who participated in this Tech Trends Index, which will be updated annually.

Here are some of the specific predictions. More than three-quarters of enterprise-generated data will be processed by edge or cloud computing by 2025. Ten percent of global GDP could be associated with blockchain by 2027. Renewables will produce 75 percent of global energy by 2050. 5G could reach 80 percent of the world’s population by 2030.

Time will tell if any or all of these are right; personally, I think renewables will have to wait a little longer for that kind of dominance. But by and large, I found the list, and the underlying thinking, compelling. And given my background in oil-and-gas, I thought it was striking that parts of the energy industry are working on just about every single one of them. Here is the list:

  • Next-level process automation and visualization.
  • Future of connectivity.
  • Distributed infrastructure.
  • Next-generation computing.
  • Applied artificial intelligence (AI).
  • Future of programming.
  • Trust architecture.
  • Bio revolution.
  • Next-generation materials.
  • Future of clean technologies.

Specifically, the first half-dozen items are all connected to digitization, and while the energy industry may not be at the cutting edge of development, it has a long track record of integrating these technologies and safely deploying them in order to deliver low-cost and reliable supply.

For example, the oil and gas industry has used AI for years to evaluate reservoirs and to plan drilling—one of many improvements over the traditional “one rock, two geologists, three opinions" way of doing things. And advanced materials, such as composites, engineered polymers, and low-density/high-strength metals and alloys are commonly used to lower costs and improve performance, for example in deep water oil and gas production and rotating equipment. As for connectivity, there is no shortage of commitment, but I think it is fair to say that the full potential has not been tapped.

McKinsey has estimated that making use of advanced connectivity alone—to optimize drilling and production, as well as to improve maintenance and field operations—could translate into $250 billion in value by 2030. That is something that the industry could really use, given recent price fluctuations. Taken as a whole, while the industry is nowhere near completing a full digital transformation, it is certainly well on its way.

As for the item most clearly connected to the industry — No. 10, clean technologies — at first glance, this might seem like bad news for traditional energy players. Not so fast. There are clear opportunities in areas such as clean coal, carbon capture, and energy storage. Moreover, other kinds of clean technologies can help the industry decarbonize its operations—something that will become more important as carbon regulation gets more stringent.

As I see it, then, while parts of the industry may seem old-school, it is actually heavily engaged in almost everything on the list. That should come as no surprise. From the first time oil was pumped in Pennsylvania in 1859, it has innovated and adapted to integrate technologies that improved productivity, safety, and environmental performance. In fact, it could it could even be said that the sector is part of what is often known as the Fourth Industrial Revolution—the convergence and interaction of physical, digital, and biological technologies.

I, and many others in the industry, believe that the ongoing energy transition will likely suppress demand for fossil fuels in the long term. But while the items on the Tech Trends Index, together and separately, will be disruptive, requiring big changes in business models and day-to-day operations, they could also help the industry to adapt.

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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 4, 2021.

Methane emissions are rising—about 25 percent in the past 20 years, and still going up— but they are difficult to measure and track. What can be done? Photo via Canva

Houston expert: Moving the needle on methane emissions

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Here’s the bad news. In 2019, methane (CH4) accounted for about 10 percent of all U.S. greenhouse gas emissions from human activities, such as those related to natural gas extraction and livestock farming. Methane doesn’t last as long in the atmosphere as carbon dioxide, but is more efficient at trapping radiation; over a 100-year period, the comparative impact of CH4 is 25 times greater than CO2. To put it another way, one metric ton of methane equals 84 metric tons of carbon dioxide (see chart). Finally, while methane emissions are rising—about 25 percent in the past 20 years, and still going up—they are difficult to measure and track.

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Source: McKinsey.com

And here’s the good news. Five industries—agriculture, oil and gas, coal mining, solid waste management, and wastewater—account for almost all of human-made methane emissions. There are practical things these industries can do, right now, at reasonable cost and using existing technologies, that could cut emissions by almost half (46 percent) in 2050. That said, it will be easier for some industries than for others. Take agriculture. Most of its emissions come from cows and sheep, which produce methane during digestion; in fact, animals account for more carbon dioxide equivalent (CO₂e) emissions than every country except China, according to a recent McKinsey report. Dealing with billions of animals, dispersed on farms small and large all over the world is, to put it mildly, complicated. Certain kinds of feed additives, for example, can reduce the formation of methane, cow by cow—but is expensive ($50 per tCO₂e and up). This add costs to farmers, without any economic benefits to them, and makes food more expensive. That’s a tough sell.

On the other hand, the energy industry accounts for 20 to 25 percent of methane emissions; its operations are fairly consolidated, and there are significant resources and expertise at hand. Plus, in many cases, there are genuine economic opportunities. For example, plugging methane leaks means less gas gets lost. Large volumes of methane emissions that are now treated as a waste could be recovered and sold as natural gas—something that is not always economic to do, but could be as gas prices rise or conditions change. According to the International Energy Agency (IEA), the industry flares approximately 90 Mt of methane per year, losing $12 billion to $19 billion in value. Over time, too, normal maintenance and upgrading strategies can also reduce emissions, for example, by replacing pumps with instrument air systems. There are many different ways to prevent losses in upstream production, including leak detection and repair, equipment electrification, and vapor recovery units.

No alt text provided for this image

Source: McKinsey.com

In the short term, meaning over the next decade, the IEA says that these and other changes could reduce emissions 40 percent (at 2019 gas prices), while more than paying for themselves. In effect, there is low-hanging fruit out there. The full potential, according to McKinsey, is 75 percent fewer emissions by 2050, but to get there, things get more expensive, somewhere in the range of $20 per tCO₂e.

Naturally, oil and gas players are not eager to embrace added costs, and these will eventually be passed on to consumers. But the industry is looking at a future that is carbon-constrained in one way or another, either through a price on carbon, or regulation, or both. It might well be that addressing methane emissions provides a way to decarbonize its operations at reasonable cost. And while there is little brand equity to natural gas at the moment—no one shops for it by name—it is possible that in decades to come, companies that can show they are producing low- or zero-carbon gas might be able to command a price premium.

Much of the oil and gas industry doesn’t disagree with this analysis. The International Group of Liquefied Natural Gas Importers, a trade group, has made the case that “abating greenhouse gas emissions (from wellhead to terminal outlet), in particular fugitive methane emissions,” is important. On the oil side, the American Petroleum Institute, as part of its climate action plan, has called for the development of methane detection technologies, and reducing flaring to zero: “We support cost-effective policies and direct regulation that achieve methane emission reductions from new and existing sources across the supply chain.” And the Oil and Gas Climate Initiative, whose companies account for almost 30 percent of global production, are also on board, calling the reduction of methane emissions to near zero “a top priority.” Back in 2017, the Houston Chronicle, the home paper of the Texas oil and gas industry, argued for better practices: “If Texas wants the world to buy our LNG exports, a sign of environmental good faith would go a long way.” And in fact there has been progress: the OGCI estimates that methane emissions are have declined 33 percent from 2017-20.

On the whole, then, this looks like one area of climate policy where there is broad consensus. Methane matters. According to one science paper, dealing with it “could slow the global-mean rate of near-term decadal warming by around 30 percent.” Just the oil-and-gas industry’s share, then, could make a measurable difference. I am not saying getting methane emissions way down will be easy, but the industry knows what to do and how to do it. It is in its interest, and that of the planet, to do so.

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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 21, 2021.

Leaders across Houston shared their thoughts on the Future of Global Energy today. Image courtesy of HETI.

Energy leaders across Houston provide a global perspective​

IT TAKES A VILLAGE

Just over one month ago, a major Houston drilling executive challenged the energy industry to embrace partnering to attain the sustainability goals of the energy transition. The sentiment echoed across multiple sessions held throughout Houston and broadcast virtually at today’s Future of Global Energy Conference presented by Chevron.

Read on for key statements made by leaders across the city at Day 2 of this three-part event, hosted by the Greater Houston Partnership, Houston Energy Transition Initiative (HETI), and Center for Houston’s Future.

SESSION 1: COMMUNITY ENGAGEMENT AND EQUITY

“My work over the past 20 years… has allowed me to connect with communities that live in the shadows of large industrial facilities,” says John Hall, CEO of Houston Advanced Research Center (HARC).

“If energy companies, and the rest of the business sector, and government could come together… we have the opportunity, if we work innovatively and creatively to mesh all of those resources together, through a process of deliberate and thoughtful conversations, and engagement with some of the most disadvantaged communities in this state–we have the opportunity, without having to spend extra money, but through cooperative collaboration and solution building… not only achieve corporate goals, but uplift these communities.“

SESSION 2: BUILDING A WORKFORCE FOR THE TRANSITION

“We have to educate younger people that are coming into the workforce where the jobs are, and where the where the jobs are going to be in the next 10-15 years,” declares Tim Tarpley, president of the Energy Workforce & Technology Council. “We do not have enough young people coming into the energy space to [back]fill the folks that are retiring. And that’s a big problem.”

Tarpley continues, “Younger people don’t always feel like there’s going to be opportunities in this industry going forward. That couldn’t be further from the truth. There is tremendous opportunity.”

SESSION 3: INNOVATION & TECHNOLOGY FOR THE ENERGY TRANSITION

“Being able to take technology from lab development to commercialization, crossing that barrier of risk–we have to do that as an industry and as a society,” explains Billy Bardin, Global Climate Transition Director, Dow Inc.

“Houston has a leading role to play in that, given the deployed assets, the expertise, the workforce development plans we heard about in the previous session with our academic partners. This portfolio of capabilities is ultimately required. At Dow, we talk about a decarbonizing growth strategy – where we want to decarbonize our assets but at the same time make safer, more sustainable materials that our customers need.”

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“Partnerships are critical with earlier stage startups, but also partnerships on deployment are critical. When thinking about scaling up, and the challenges of scaling up, it’s really hard to find one company that can do it all,” says Jim Gable, President, Chevron Technology Ventures. “Every solution has to fit within the rest of the system. It’s not just one breakthrough that’s going to resolve the world’s challenges related to decarbonization or lowering our carbon footprint.”

SESSION 4: FUNDING THE ENERGY TRANSITION

“One of the vexing issues is the demand side of the equation,” posits Kassia Yanosek, Partner, McKinsey & Company. “We are in a different world today, where we have to think, ‘How do we scale new molecules?’ Green LNG, hydrogen and ammonia made from green hydrogen or blue hydrogen–we don’t have a deep market for those types of molecules. The challenge we are facing today, in addition to the supports on the supply side, is creating a market and demand for these molecules that cost more but also have a greener content.”

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CenterPoint reports grid resilience updates as hurricane season begins

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As hurricane season descends upon the region, CenterPoint Energy has shared the latest update on its Greater Houston Resiliency Initiative (GHRI) that’s been working to make grid upgrades and introduce weather-related tech since 2024.

As of April 2026, CenterPoint had:

  • Replaced more than 65,000 poles with stronger storm-resistant infrastructure
  • Trimmed or cleared more than 10,000 miles of vegetation
  • Undergrounded more than 500 miles of power lines
  • Installed more than 600 automation devices
  • Installed more than 150 weather stations

In May, CenterPoint announced its new Community Progress Tracker, which helps residents track electronic infrastructure improvements. In terms of other technology, CenterPoint has announced its partnership with weather, wildfire and flood modeling software Technosylva. The software is expected to help CenterPoint track weather conditions in advance to better prepare crews.

CenterPoint has also added 150 weather stations to improve weather monitoring, conducted a full-scale hurricane response exercise involving more than 400 employees and completed more than 25,000 hours of FEMA training across more than 800 employees. The company opened a new year-round Emergency Operations Center to help coordinate with emergency response partners, local and state officials, and media during major weather events.

“We are proud of the progress made in 2025, which helped deliver more than 100 million fewer outage minutes when compared to 2024, and we are determined to make even more progress in 2026 as we work toward our defining goal: building the nation's most resilient coastal grid,” Nathan Brownell, CenterPoint's vice president of resilience and capital delivery, previously said in a news release.

According to the company, the GHRI aims to improve overall grid resiliency and reliability and to reduce outages for customers. CenterPoint projects its efforts can reduce customer outages by 150 million by the end of 2026.

Energy expert: Why Houston's 100-degree days matter more than 5 years ago

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If you are a Houston native or have lived in the city since the 1980s, you likely remember when a 100-degree day was so rare it made the local news. There were heat advisory warnings, with special attention to the midday hours, because the heat exposure carried with it risks like dehydration, heat stroke and extreme exposure to UV rays.

In this new era for our city and state, 100-degree days are becoming more common. Our local weather forecasters still report on the occurrence, but we are no longer able to restrict our activities as heavily.

The climate has changed rapidly, and Texans are navigating our collective response to the increased heat that has serious implications for our health, energy supply, economy and regional life.

Houston Has Always Been Hot, But This Heat is Different

Houston has expanded exponentially in the last few decades, doubling its population from roughly 1.4 million in 1976 to 2.4 million today. When we account for the growth in the surrounding suburbs, the population boom nearly quintuples.

Houston and the surrounding suburbs now total nearly 7 million people, a huge population increase that brings greater demand for energy. This demand impacts our infrastructure, energy availability, consumer costs, workforce productivity and water supply significantly. With these additions comes more asphalt and fewer trees. With less tree cover and green space, heat gets trapped, increasing temperatures in the city.

We are not just inheriting rising temperatures; we are also building hotter cities.

100-Degree Days and The Texas Grid

I have written before about our grid capacity, changes facing Texas, and the strain that we have seen on the grid. While redundancies in the Texas grid are improving, the pace of this change continues to pose challenges for our area.

The extreme heat has now made air conditioning mandatory for a greater percentage of days during the calendar year. AC units (large and small) are no longer cycling on and off as they are designed to run; instead, most systems are running continuously to meet the needs of Texans.

Daily activities and devices, including remote work, the AI boom, physical exercise, children’s playtime, charging multiple devices, and streaming entertainment, require much more cooling than in previous generations, producing a much larger demand on the grid.

Additionally, the way Houstonians live at home has also changed. Homes across America are much larger on average than they were in the 1980’s. Also, with the rise of remote work, there is a greater need for all-day electricity in each individual household. These factors, combined with the exponential increase in the number of devices and appliances used in households, significantly affect energy demand in our region.

Of course, we’re also seeing massive usage of electricity from large business users (warehouses, data centers, and more), including empty office buildings as return-to-office is slower than expected post-pandemic.

Heat is Not the Only Culprit

As Houston is a coastal city, we not only have to contend with 100-degree temperatures, but humidity also adds an extra layer of complexity to our climate. Thanks to the humidity, temperatures stay elevated for longer periods, meaning everything is retaining heat at a higher rate and for longer than ever before.

The heat never really leaves us anymore, as we don’t have cooler nights to help balance these very hot days. The compounding effect of extreme temperatures and high humidity makes energy demand higher in our region than in places like the New Mexico desert.

Economic Impact on Our Region

Extreme heat hits Texans’ wallets long before a weather alert ever pops up. When temperatures stay above 100 degrees for days at a time, air conditioners are basically working overtime, which sends electricity bills climbing.

And the harder those systems run, the more wear and tear homeowners end up dealing with, usually at the worst possible time, like the middle of July when a boom of AC units decide to quit at once. Meanwhile, roads, transformers and other infrastructure are all under more stress than they were originally built for.

There’s also a much bigger ripple effect that people don’t always think about. When it’s dangerously hot outside, construction crews, energy workers, landscapers, and other outdoor industries simply can’t operate the same way, which slows productivity and raises safety concerns.

Cities are also spending more money on cooling centers and heat-related emergency response, and over time, all of those rising costs have a way of showing up somewhere, whether that’s insurance rates, utility costs or the price communities pay to keep up with extreme weather.

The Opportunity for Houston

Texas is becoming a real-time test case for what happens when extreme heat, rapid growth, and massive energy demand all hit at once. While problematic, it also creates a huge opportunity for Houston and the Texas energy sector to lead. If there’s any place equipped to determine what the future of energy resilience looks like, it’s the city that already powers so much of the world’s energy conversation.

And the solution isn’t just “create more electricity.” It’s about building a smarter, more flexible system overall with better grid technology, battery storage, stronger infrastructure, more efficient building, and energy systems that can handle these extreme weather swings without everything feeling stressed at once. The reality is that a lot of what Texas figures out over the next few years could become the blueprint for other cities and states across the country.

Houston is already testing some of these smarter resilience strategies, such as microgrids, stronger substations, and more flexible energy systems designed to keep critical facilities running during major storms or outages. The goal is simple: build a grid that can take a hit without everything feeling strained all at once.

Going Forward

Hotter days are here to stay. We can’t stop our lives amid the extreme heat, so we have to find ways to adapt and we have to do it quickly. If there’s one thing Texas has always done well, however, it’s innovate under pressure. The communities, companies and energy leaders that move fastest now won’t just be responding to the future, they’ll be helping define it.

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Sam Luna is director at BKV Energy, where he oversees brand and go-to-market strategy, customer experience, marketing execution, and more.

Houston lands 27 Fortune 500 headquarters, led by energy heavyweights

HQ leader

Houston is a giant among U.S. hubs for corporate headquarters.

The 2026 Fortune 500 lists 27 companies based in the Houston area, with many energy companies claiming top spots. Houston ties with Chicago for the second-most Fortune 500 headquarters, preceded only by New York City (53). Dallas-Fort Worth is home to 23 Fortune 500 headquarters.

Texas leads the nation for Fortune 500 headquarters (57), with California in the No. 2 spot and New York at No. 3.

“Texas is the undisputed headquarters of headquarters,” Gov. Greg Abbott said in a news release. “The world’s leading businesses invest with confidence in Texas because of our welcoming business climate, predictable regulatory environment, and skilled and growing workforce. People and businesses are choosing Texas because Texas works.”

The 2026 Fortune 500 ranks the largest U.S. corporations based on revenue in fiscal year 2025.

Here’s a rundown of the 27 Fortune 500 companies based in the Houston area.

  • No. 9 ExxonMobil
  • No. 21 Chevron
  • No. 29 Phillips 66
  • No.55 Sysco
  • No. 75 ConocoPhillips
  • No. 89 Enterprise Products Partners
  • No. 103 Plains GP Holdings
  • No. 133 Hewlett Packard Enterprise
  • No. 149 NRG Energy
  • No. 157 Quanta Services
  • No. 164 Baker Hughes
  • No. 173 Occidental Petroleum
  • No. 179 Waste Management
  • No. 201 EOG Resources
  • No. 204 Group 1 Automotive
  • No. 207 Halliburton
  • No. 223 Cheniere Energy
  • No. 236 Corebridge Financial
  • No. 262 Targa Resources
  • No. 266 Kinder Morgan
  • No. 388 Westlake
  • No. 435 CenterPoint Energy
  • No. 438 APA
  • No. 440 Comfort Systems USA
  • No. 455 NOV
  • No. 488 KBR
  • No. 496 Coterra Energy. Oklahoma City, Oklahoma-based Devon Energy and Houston-based Coterra Energy merged in early May, with the combined company retaining the Devon Energy name and the Houston headquarters.

The Greater Houston Partnership notes the Houston area soon will welcome its 28th Fortune 500 company. Expand Energy (formerly Chesapeake Energy), appearing at No. 362 on the 2026 list, says it’s moving its headquarters from Oklahoma City to Spring this year.

As the natural gas producer prepares to relocate to Texas, it’s hunting for a new leader. Nick Dell’Osso stepped down as president and CEO earlier this year. Board Chairman Michael Wichterich is interim president and CEO.

Dell’Osso became president and CEO of Oklahoma City-based Gulfport Energy effective May 28.

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