McKinsey is choosing Houston for a $100 million investment to decarbonise the energy sector. It plans on leveraging clean energy solutions, such as CCUS, hydrogen and power management, to transform an oil and gas hub into a showcase for clean energy opportunities. It is working with its materials practice to transition petrochemicals as well.
$100m investment in decarbonisation by a leading management consultant shows market expectations for skills and expertise.
A focus on hydrogen and CCUS shows commitment to an as yet unproven technological option, but one that can keep the fossil fuel industry going.
Transforming one of the largest industrial bases in the world can be a showcase for the opportunities in sustainable growth.
McKinsey’s Houston office has launched its Global Decarbonization Hub in Houston to accelerate the clean energy transition.
Houston is chosen because it offers grounds for great transformational impact as it hosts 40% of all publicly traded oil and gas companies and is soaked in oil and gas culture over generations. Approximately 10% of US emissions stem from there.
Hydrogen; carbon capture, utilization, and storage (CCUS); circular plastics; and power management will all be advanced in a $100 million investment over 10 years in conjunction with McKinsey’s Global Energy and Materials Practice.
McKinsey’s Houston office’s partnership for hydrogen infrastructure
McKinsey’s Houston office has been working with the Greater Houston Partnership’s Houston Energy Transition Initiative and Center for Houston’s Future Hydrogen work for the past two years developing a roadmap whitepaper.
The report explains the linkage with carbon capture to clean hydrogen and highlights the benefits of emission reductions with high-paid employment opportunities.
“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.
In an example of McKinsey’s work in Houston, McKinsey Power Solution’s modelling helped develop a roadmap for a major oil and gas company to abate up to 50 mega-tons of carbon over a ten-year period. Simultaneously the company produced a plan involving massive electrification and green infrastructure for power sourcing.
Upcoming SEC rules will require emission disclosure from major plants
Oil and gas and petrochemical infrastructure and plants are prevalent in Houston, which will soon be subject to upcoming legislation from the US Securities and Exchange Commission.
SEC rules will require Scope 1 emissions and Scope 2 emissions to be revealed by large companies, and Scope 3 emissions if they were material to the company in question’s business. This will provide impetus to transition to hydrogen and employ decarbonisation technologies upstream and downstream.
McKinsey’s supply chain
McKinsey is a world-leading management consulting and this announcement shows how it is focusing its attention on the decarbonisation requirements affecting businesses and supply chains globally. Working with the materials practice is a close fit.
Earlier this month it also announced how it was teaming up with Microsoft to develop a sustainability analytics platform to facilitate end-to-end decarbonisation planning, monitoring and execution.
“Urgent and decisive action to curtail emissions is needed if we are to reach net zero by 2050,” says Tomas Nauclér, senior partner at McKinsey and global co-lead of McKinsey Sustainability.
