McKinsey To Invest $100 Million Into Houston Decarbonization Programs
- Houston is home to 40% of all publicly traded oil and gas companies
- The Gulf Coast is responsible for 10% of emissions in the U.S. and 3% of global emissions
- The region is primed to lead the energy transition across green technologies
McKinsey’s Houston office is pleased to launch the Global Decarbonization Hub, a joint effort between McKinsey Sustainability and the Global Energy and Materials Practice, to unlock transformational opportunities for the community and our clients.
Houston is one of the largest industrial bases in the world. Situated in the Gulf Coast, which is responsible for approximately 10 percent of emissions in the United States and three percent of global emissions, the city is home to 40 percent of all publicly traded oil and gas companies. Given its scale, energy infrastructure, and community of stakeholders, Houston is primed to lead the energy transition across green technologies including hydrogen; carbon capture, utilization, and storage (CCUS); circular plastics; and power management.
McKinsey’s Houston office has been working to help accelerate that transition in collaboration with the Greater Houston Partnership’s Houston Energy Transition Initiative and Center for Houston’s Future Hydrogen work. Over the last two years, McKinsey has supported these initiatives through a variety of efforts, including a pro-bono study on ways to catalyze the energy transition and a roadmap whitepaper on what it will take to get there.
“Texas is the nation’s largest renewable energy producer, home to half of the nation’s hydrogen pipelines, and its companies have unparalleled capabilities in building and operating complex projects,” says McKinsey senior partner Filipe Barbosa. “This is Houston’s moment in time on the global stage.”
Image: Downtown Houston. Source: David Mark / Pixabay
Over the next decade, McKinsey will invest $100 million into driving asset decarbonization programs in Houston; scaling climate technologies like CCUS; and building new relevant businesses across energy and materials value chains. This involves revamping business models for carbon-exposed businesses, scaling the energy-transition startup community, and attracting and developing new talent. Efforts will also focus on capability building for executives and collaborating with cross-sector coalitions and industry associations.
In the last six months alone, McKinsey’s Houston office has successfully delivered more than 30 client sustainability engagements spanning CCUS; hydrogen; energy transition strategy; and green business building.
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For example, in our work with a major oil and gas company, we used McKinsey Power Solutions modeling capabilities to develop a roadmap to abate up to 50 mega-tons of carbon over a ten-year period. We simultaneously developed a plan for green power sourcing that meets massive electrification and infrastructure needs, involving multiple power-sourcing levers and partnerships.
Texas is the nation’s largest renewable energy producer, home to half of the nation’s hydrogen pipelines, and its companies have unparalleled capabilities in building and operating complex projects. This is Houston’s moment in time on the global stage.McKinsey senior partner Filipe Barbosa
In another engagement, we conducted a strategic review for a major global petrochemical player that found the client could exceed its 2030 targets and accelerate its path towards net zero. To illustrate this, we created a roadmap for how to reduce carbon emissions by 67 percent, an analysis the client is using to increase climate ambitions and build a site-level assessment across its portfolio for capital deployment.
The impact on energy markets in the region will be significant with the goal of abating 100 million tons of annual emissions by 2050, and the opportunity to create half a million new jobs. Given Houston’s global influence in the industry, there is also potential for significant impact and learnings for the energy transition globally.
“Decarbonization will lead to a new chapter of economic development, while also addressing a critical problem of climate change,” says McKinsey partner Nikhil Ati. “I am excited to lead this effort in driving impact for our clients, our people, and our community.”