How Private Capital Impacts the Energy Transition

Geopolitics looms large over the global economy. A recent client survey by Goldman Sachs found geopolitics is the top investment risk of this year, overtaking inflation and the upcoming U.S. presidential election.  The market impacts by the wars in Europe and the Middle East, and the rising tension between China and Taiwan, are hard to predict. And the rise of protectionism, economic fragmentation, and industrial policy are inflaming tensions in a new era of great power competition.  So, how should we understand this shifting world order? What is coming next in the Middle East following Iran’s attack on Israel? And how do energy and climate change impact national security?  This week’s episode features a fireside chat between Jason Bordoff and Tom Donilon from the Columbia Global Energy Summit 2024, which was hosted by the Center on Global Energy Policy, Columbia SIPA last week at Columbia University in New York.  Tom is chairman of the BlackRock Investment Institute. From 2010 to 2013, he served as national security advisor to President Barack Obama. He has worked closely with and advised three U.S. presidents since his first position at the White House in 1977, working with President Carter. He later served in senior roles in the Pentagon and the State Department.

Cleaner alternatives to the oil and gas that power vital industries are necessary for economy-wide decarbonization. E-fuels, or electrofuels, are touted as a carbon neutral solution for the hard-to-decarbonize sectors that rely on energy dense fossil fuels.  E-fuels are made by combining hydrogen with carbon dioxide. Through the electrolysis process, water is split into oxygen and hydrogen atoms. The hydrogen is then combined with CO2 through a process called synthesis. The outcome is an energy-dense liquid, synthetic fuel.  But currently, the e-fuels production process makes these alternatives more expensive than fossil fuels. And when burned, they release CO2, making critics question the claims of climate neutrality.  So, what is the climate impact of e-fuels? What industries are turning to these alternatives for decarbonization? And how can policy and tax incentives make them cost competitive with conventional oil and gas?  This week host Bill Loveless talks with Meg Gentle about the use of e-fuels for transport.  Meg is the executive director of HIF Global, an e-fuel company developing some of the largest projects around the world. Before joining HIF, Meg served as the director of Ovintiv, an independent petroleum company, and as the president and CEO of the natural gas company Tellurian. She also spent ten years working for Cheniere Energy, helping grow their LNG marketing and trading company into a world-wide business.  

From methane monitoring to integrating more renewables into the power mix, artificial intelligence has the potential to transform the energy transition. It can be used to reduce emissions from food systems, and hard-to-abate sectors, like steel and cement manufacturing.  But the amount of energy AI will require is generating interest, uncertainty and concern. And this is in addition to the need for more electricity to help decarbonize multiple sectors. So what are the high potential opportunities for using AI to combat climate change and what are the risks? How will AI exacerbate existing stress on the power sector? And what are some of the opportunities to lower costs and increase efficiencies?   This week host Jason Bordoff talks with two of the authors of the “Roadmap on Artificial Intelligence for Climate Change Mitigation,” David Sandalow and Alp Kucukelbir. David Sandalow is the inaugural fellow at the  Center on Global Energy Policy. Previously, David served at the U.S. Department of Energy and was a senior fellow at the Brookings Institution. He has served as assistant secretary of state for oceans, environment, and science, and as a senior director on the National Security Council staff.  Alp Kucukelbir is the co-founder and chief scientist  at Fero Labs. He is an adjunct professor of computer science at Columbia University and leads the entrepreneurship efforts at Climate Change AI.

On March 6, the U.S. Securities and Exchange Commission (SEC) adopted new rules to standardize climate-related disclosures for public business and public offerings. Hoping to provide investors with consistent and comparable information, the Commission’s new rules require companies to disclose emissions and the expenses and losses associated with climate risks in annual filings and reports.  But critics immediately balked at the rules, questioning its legality and effectiveness.  So, how does the SEC define climate-related risks? How do their disclosure requirements compare to similar rules passed in the EU and California? And what are the critics saying?  This week host Bill Loveless talks with Shiva Rajgopal about the SEC’s climate disclosure ruling and his Forbes’ column on the topic, “The SEC’s New Climate Rule Is A Reasonable Political Compromise In An Election Year”.   Shiva is the Kester and Byrnes Professor of Accounting and Auditing at Columbia Business School. His research interests span financial reporting, earnings quality, fraud, executive compensation and corporate culture. From 2017-2019, Shiva served as the vice dean of research for Columbia Business School and has been a faculty member at Duke University, Emory University, and the University of Washington.

Methane leakage is one of many issues at the forefront today over how the oil and gas industry is engaging in the clean energy transition. Importantly, this industry includes not only some of the better-known energy companies, but also many national oil companies. Collectively they produce about half the world’s oil and gas. During last year’s COP28, these companies committed to cutting methane emissions and working towards decarbonizing the industry. But the energy transition for these companies is a delicate balance, as they are responsible for generating revenue and ensuring energy security for their countries.  So, how will global pledges to decarbonize impact the oil and gas industry? What is the role for cleaner fuels like hydrogen in meeting growing energy demand? How much progress is being made to curb methane emissions? And what is the role of national oil companies in the transition?  This week host Jason Bordoff talks with Mark Brownstein about the importance of reducing methane emissions and what the transition looks like for national oil companies.  Mark is the senior vice president of energy transition at the Environmental Defense Fund. He has been with EDF for almost two decades, working to halt the rise of global oil and gas emissions and accelerate the transition away from fossil fuels. Before joining EDF, Mark worked for Public Service Enterprise Group, a large electric and gas utility holding company in the U.S. He has also taught energy policy at Columbia University’s School of International and Public Affairs. 

To limit global warming to 1.5°C above pre-industrial levels, emissions should already be decreasing and need to be cut by almost half by 2030. Although this target is just six years away, fossil fuels experienced continued demand and revenue growth in 2023.  At CERAWeek by S&P Global, one of the world’s largest annual energy conferences, the energy transition is at the forefront of conversations. But energy security and different pathways to net-zero goals is also the theme of the conference, and many companies are recommitting to their traditional oil and gas businesses even as they invest more in clean energy.  How do we navigate the path to a clean energy future? What is the outlook for energy prices and markets? What impact will today’s geopolitical challenges have on the transition? And what effects will the many elections around the world have on the energy sector? This week host Jason Bordoff is at CERAWeek talking with Javier Blas about the path to a clean energy future.  Javier is an opinion columnist for Bloomberg covering energy and commodities. He was previously at the Financial Times, where he held various positions, including his roles as the Africa editor and the commodities editor. Javier is a coauthor of the book The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources released in 2021.

For more than a century, extractive industry and capitalism have dominated the developed world’s economies. Some of the biggest companies in the world produce and sell oil and gas, and those commodities have made countries and people very wealthy. But they’re also a major source of pollution and contributor to the climate crisis. In response, many of these companies have started investing in renewable energy, others have completely shifted their focus to clean solutions.  Akshat Rathi’s new book Climate Capitalism delves into this shift and argues that saving the earth is economically more advantageous than destroying it.  So, what is climate capitalism? How can this new approach facilitate climate innovation and economic growth? And what will it take to move away from traditional capitalism?  This week host Bill Loveless talks with Akshat about his new book and how reforming the current economic system can address climate change and be profitable. Akshat is a senior climate reporter for Bloomberg News. Prior to Bloomberg, he was a senior reporter at Quartz and a science editor at The Conversation. His new book, Climate Capitalism: Winning the Race to Zero Emissions and Solving the Crisis of our Age has been named one of the best books of the year by the The London Times and The Economic Times. 

Batteries are finding their way into everything – from cars to heavy equipment to the electric grid. But scaling up production to meet the demands of a net-zero economy is complicated and contentious.  Season 4 of The Big Switch, a Columbia University podcast hosted by Dr. Melissa Lott, digs into the ways batteries are made and asks: what gets mined, traded, and consumed on the road to decarbonization? This is part one of “The Great Battery Boom,” a five-part series on global battery supply chains. Find the rest of Season 4 of The Big Switch on Apple podcasts, Spotify, or wherever you get your podcasts.

The success of the energy transition hinges on the availability of affordable capital to fund clean energy projects. The rise of green industrial policy in wealthy economies has mobilized public capital to fund clean energy projects, and attracted private capital through subsidies and tax incentives.  But in emerging and developing economies, there are many more barriers to deploying capital for clean energy at the scale and speed needed. The International Monetary Fund projects that of the $5 trillion in annual investments needed globally by 2030 to meet the world’s net-zero emissions goals, $2 trillion will need to be made in emerging markets and developing economies. So, what is the role of private capital in accelerating the clean energy transition in economies around the world? And how can private sector coalitions advance the energy transition amidst anti-ESG backlash and higher cost of capital?  This week host Jason Bordoff talks with Nigel Topping about the pace of technological innovation to scale the energy transition, and the role of private capital in meeting global climate commitments. Nigel is a distinguished visiting fellow at the Center on Global Energy Policy and a global advisor to governments, financial institutions, and private companies on climate and industrial strategy. He served as the United Kingdom’s High-Level Climate Action Champion for COP26. In this role, he mobilized the global private sector and local government to take action on climate change by launching the Race To Zero and Race To Resilience campaigns and, together with Mark Carney, launched the Glasgow Financial Alliance for Net Zero. Nigel is also a non-executive director of the UK Infrastructure Bank and an honorary professor of economics at Exeter University.

In a new partnership with Google, the Environmental Defense Fund has developed a satellite that will orbit the Earth fifteen times a day and monitor methane emissions. The satellite, called MethaneSAT, will provide specific data on which parts of oil and gas infrastructure are the biggest methane emitters. Using artificial intelligence, MethaneSAT will overlay emissions data on oil and gas infrastructure maps to pinpoint the components that are responsible for methane leaks.  So, what are the implications of this new methane detection technology? And can it be expanded to detect other greenhouse gasses? This week host Bill Loveless talks with EDF’s Steve Hamburg about the capabilities of MethaneSAT, and how they differ from other satellites that detect methane. Steve is the chief scientist and a senior vice president at the Environmental Defense Fund. He leads the organization’s work to quantify methane emissions and understand the impacts on air pollution and human health. Before joining EDF in 2008, he was an environmental science professor at University of Kansas and Brown University, where he was the founding director of the Global Environment Program. He has also served as a lead author for the Intergovernmental Panel on Climate Change, and was acknowledged as one of the contributing recipients of the 2007 Nobel Peace Prize.