By Matt Welch
May 11, 2022
The future of clean energy is going to look a lot different than the past. Major oil and gas companies across the globe see a changing world. While they are still investing in the traditional oil and gas patch, they are accelerating their investments in the clean energy sector. Here in Texas, we see the growth of clean energy firsthand. Our central power grid currently has 92,000 megawatts of installed generating capacity and serves more than 26 million customers. Today, 38% of that capacity comes from wind and solar resources, which delivered nearly a quarter of all the electricity we used last year.
Storage batteries and associated technologies are being deployed to help back up renewables and create a more reliable and efficient grid. While the majority of the energy we consume is still based on the “conventional” hydrocarbons – oil and gas (and coal in the power sector) — the clear direction of the global energy economy has not been lost on the “traditional” energy companies. They are fully aware of the $130 trillion dollars of clean energy investments that 450 financial institutions pledged at last year’s COP26 Climate Summit in Glasgow, so they are beginning to position themselves to do business in this emerging marketplace.
In the U.S., that transition is picking up speed. Companies with big household names, such as ExxonMobil and Shell, as well as smaller outfits such as Energy Transfer Partners, Buckeye Partners and Occidental Petroleum have either partnered with renewable energy companies or bought wind or solar projects outright. Koch Industries has been particularly active in the past few years, making an estimated $1.7 billion of investment to date in what it calls “energy transformation” technologies. It has now invested in or acquired at least 18 companies that range across the electric vehicle, battery energy storage, and renewable energy value chains. When a traditional oil and gas company such as Koch pivots in a new direction, you know something is up.
Chevron is also placing bets on renewable natural gas projects for trucking fuel as well as working in the hydrogen arena, on everything from rail transport to utility-scale production, storage, and transportation of green hydrogen. Even coal companies are getting into the clean energy game. U.S. coal giant Peabody announced in March that it was forming a joint venture to develop over 3,300 megawatts of solar and 1,600 megawatts of battery energy storage projects.
When many people think of clean tech, they think of Silicon Valley. These days, though, the clean tech center of gravity is clearly shifting southeast to the Lone Star State. The attractive wind and solar resources, available land, relatively easy ability to connect to the power grid and skilled workforce are a powerful magnet to both developers and project financiers. Add to that a favorable business and tax regime, and Texas has the ability to lure major players to set up shop here. It’s no accident that Tesla’s most modern gigafactory made its way to Texas.
The traditional energy companies’ investments of billions of dollars in clean energy and technology in recent years is more than simple “greenwashing,” in which companies make token investments to look environmentally friendly. It’s part of a rapidly growing global trend. These investments are real, having big impacts today and will pay long dividends. It’s also clear that this is just the beginning, both globally, and for Texas – which is astutely positioning itself as the epicenter of the energy transition.
Matt Welch is the state director of Conservative Texans for Energy Innovation, a statewide nonprofit advocacy organization that works to advance clean energy with free-market solutions that bring job creation, technology advancement, innovation and a cleaner environment.