Day 5: Our last day

Our last stop on the Houston tour was at Element Markets where a Nicholas School alum, Zach Eyler, took us around the trading desks.  EM focuses primarily on trading emission credits and offsets but maintains a small solar and wind development group.  Zach talked us through his role as a policy analyst and his view future carbon markets.  He’s hopeful that the Waxman-Markey bill will pass in some form which could seriously increase EM’s trading and development businesses.  Thanks a lot to Zach for making the visit happen.

EM was a great spot to wrap up our trip as carbon seems to be the uniting point of interest between oil & gas businesses and our Energy & Environment students.  We got the hard sell from oil & gas and at the end of the day I think we students learned that we have a lot more in common with the industry than we initially thought. 

The truths I will take away from our time in Houston are these:

1. Oil is an efficient energy source in terms of power output to volume and it will continue to be a significant part of the energy mix
2. Oil extraction and refining is a tough business and the companies involved are incentivized to operate as efficiently as possible, this can include minimizing upstream environmental impact
3. The infrastructure is massive, capital intensive, and slow to change

While oil & gas companies are incentivized to minimize their operating expenses and overall impact during extraction and refining, their job is done once the product is sent to the pump.  Brock Pearson from ExxonMobile described it best when he said that the energy we consume comes from breaking the carbon-hydrogen molecular bonds.  That means oil & gas will always be a carbon intensive industry and CO2 will always be part of the waste.

However, oil & gas has been a hugely successful industry not because of sinister motives, or backroom dealings, it has been successful because it meets a fundamental demand through brilliant science and engineering.  That said, there is more than one way to skin a cat and once the accounting of carbon emissions catches up to the science I think we will see many more ways to meet the demand for energy.  Just about everyone we met in Houston agreed that emissions are not free, the costs are borne somewhere even though we might not know exactly where or how much they are.

After expounding the challenges environmentalists face, Joe Barnes from the Baker Institute asked our group how many were hopeful for the future.  I was surprised that only Lincoln and I raised our hands ‘yes’.  The challenges are certainly great, but so is the opportunity.  Given the caliber of the students in our group and the accomplishments of companies like Exxon in years past and present, I am now more convinced than ever that anything is possible.

Thanks to all the students and speakers for great discussion and debate.  Many thanks to Kyle and Marianne for a truly smooth operation.  And a huge thank you to Lincoln and Bob for driving topics and illuminating both differences and common ground between the oil & gas industry and MEM students.