Navigating the Energy Transition with Oil & Gas Insider Tisha Schuller
Tisha Schuller is the founding CEO of Adamantine Energy. At Adamantine, Tisha consults with clients ranging from Fortune 100 energy companies to nonprofit environmental organizations on topics related to energy policy, business strategy, politics, and community engagement. With a background as the former president and CEO of the Colorado Oil & Gas Association and as a strategic advisor for Stanford University's Natural Gas Initiative, Tisha offers valuable insights into the energy sector. She's a member of the Natural Petroleum Council and has been on the advisory board to the Secretary of Energy under the Obama, Trump, and Biden administrations. She has authored three books, most recently, Real Decarbonization: How Oil and Gas Companies Are Seizing the Low-Carbon Future, as well as The Gamechanger's Playbook: How Oil & Gas Leaders Thrive in an Era of Continuous Disruption, and Accidentally Adamant, her own story of her time running the Colorado Oil & Gas Association.
MCJ exists to break down silos and to help people understand climate change, and in some ways, it feels like Tisha at Adamantine is doing the same thing with a different orientation. She comes from oil and gas and she's focused on the energy transition and how to help oil and gas leaders navigate their companies through it.
Not all listeners will agree with Tisha's perspective, but a big part of her message is in trying to start from a shared vision of the future and work backward. We enjoyed hearing about how she uses this approach today and the perspectives she's gained in doing so.
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Episode recorded on Nov 20, 2023 (Published on Jan 2, 2024)
In this episode, we cover:
[03:05]: Tisha's podcast Energy Thinks
[05:10]: Different mindsets on energy and climate and how to speak to an oil and gas audience
[06:57]: Climate “personas” and how Tisha finds common ground among them
[10:12]: The assumption that everyone thinks they're doing good
[13:07]: Lessons from a DAC project community engagement
[16:01]: Perspective on youth activists opposing projects
[18:18]: Challenges permitting any new energy projects
[21:27]: Tisha's personal journey on fossil fuel use views
[23:38]: Consequences of US stopping oil and gas production
[32:02]: Oil and gas company evolution archetypes
[34:04]: No option but to change from status quo
[36:00]: Entering era of climate action execution
[37:20]: Role of startups vs large companies in the energy transition
[40:07]: Improved community benefits from new projects
[42:07]: Industry population shift driving change
[45:13]: Making space for oil and gas in climate solutions
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Cody Simms (00:00):
Today on My Climate Journey, our guest is Tisha Schuller, founding CEO of Adamantine Energy. At Adamantine, Tisha consults with clients ranging from Fortune 100 energy companies to nonprofit environmental organizations on topics related to energy policy, business strategy, politics, and community engagement. Tisha brings an oil and gas insider perspective to her work, having previously been president and CEO of the Colorado Oil & Gas Association, and serving at present as the strategic advisor for Stanford University's Natural Gas Initiative. She's a member of the Natural Petroleum Council and has been on the advisory board to the Secretary of Energy under the Obama, Trump, and Biden administrations. She's the author of three books, most recently, Real Decarbonization: How Oil and Gas Companies Are Seizing the Low-Carbon Future, as well as The Gamechanger's Playbook: How Oil & Gas Leaders Thrive in an Era of Continuous Disruption, and Accidentally Adamant, her own story of her time running the Colorado Oil & Gas Association.
(01:17):
I met Tisha via Cully Cavness at Crusoe, which is an MCJ portfolio company and she is an advisor to them. MCJ exists to break down silos and to help people understand climate change and how to help. In some ways, it feels like Tisha at Adamantine is doing the same thing but with a different orientation. She comes from oil and gas and she's focused on the energy transition and how to help oil and gas leaders navigate their companies through it. With fossil fuels being the vast majority of our energy mix around the world today, I've become pragmatic in recognizing that oil and gas companies need to become part of the solution to climate change, even recognizing some of their past transgressions in propagating climate denial.
(02:07):
So to that end, I really appreciated learning from Tisha about the work that she does and the perspectives she brings to that work. I'm sure that not all of our listeners will agree with everything she says, but a big part of her message is in trying to start from a shared vision of the future and work backward. And I enjoyed hearing from her how she approaches that today and the perspectives she's gained in doing so. But before we start...
(02:35):
I'm Cody Simms.
Yin Lu (02:36):
I'm Yin Lu.
Jason Jacobs (02:38):
And I'm Jason Jacobs, and welcome to My Climate Journey.
Yin Lu (02:44):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (02:49):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help. Tisha, welcome to the show.
Tisha Schuller (03:03):
Cody, thanks so much for having me.
Cody Simms (03:05):
Well, boy, I have been binging on your podcast for the last few days in preparation for the show, and I am excited for all the things we're going to talk about. Maybe start with just a plug for your own pod for listeners who decide they love what you have to say and want to go ahead and follow and listen along more.
Tisha Schuller (03:23):
Oh, that's so generous. So my podcast is Energy Thinks. It's oriented toward an oil and gas executive audience, and it's all about the energy future. How are we leading as civic leaders? How are we leading in environmental social governments, ESG, decarbonization, environmental justice, community engagement, all things that are the future of energy, I think as we'll discuss today that the industry has a really big role to play and I want to be a part of both inspiring and pulling toward that.
Cody Simms (03:53):
And it sounds like the pod came out of your most recent book called Real Decarbonization. Is that correct?
Tisha Schuller (04:01):
Yes. Actually it started with my last book, which was The Gamechanger's Playbook.
Cody Simms (04:05):
Oh, there we go. Okay, great.
Tisha Schuller (04:05):
It basically came out of COVID, like how can we keep these conversations going? So many things did, and what's really nice is that it's a playground probably just like this work for you all. It's a playground to push on new ideas, to evolve our thinking. I don't think anyone has solved how we can work together to transcend polarization and engage in meaningful ways on climate change. So in the pod we want to push on each other's ideas, so nobody has to have the right answer and everyone is expected to grow as a result of participating.
Cody Simms (04:37):
Well, I'm excited for this conversation because from what I can gather, you have a very similar mindset of MCJ, which is in order to help the world transition, it's a matter of breaking down silos, helping people look outside of their normal swim lanes, collaborate and pragmatically manage the transition in a way that helps us achieve long-term goals but doesn't leave people stranded on the sidelines in the short term. At least that's the orientation we come at from MCJ. If anything there doesn't resonate with you, maybe share how you would think a little bit differently.
Tisha Schuller (05:10):
It actually does resonate, and the piece that I would layer on top of that is when I'm working with my audience, which is traditional oil and gas audience, I invite people to think about the mindset that they live in and also the mindset that the people they want to connect live in. So many of your listeners may live in what I would call an energy centric mindset. You're sort of a scientist, you're an engineer, you have this orientation towards pragmatic solutions. You maybe understand the complexity of the global energy system, you understand the complexity of transition, but there's a lot of people that have what I would call a climate centric mindset that don't have an underpinning in science and energy. When I'm working with the oil and gas industry, I want us to be really, really mindful of a climate centric mindset that isn't science and engineering oriented.
(05:59):
Because if we have all these conversations at the level of like, oh, we have to rely on physics, we miss the opportunity to figure out how to connect to people to build trust, to build rapport. And so a lot of my work layers that on understand your own mindset, understand the mindset of people that you want to connect to, maybe influence, maybe engage with, and then think about what can they hear, what are they interested in hearing? And I would imagine your audience has a wide array. This isn't black and white, it's a spectrum of the way people come to these conversations. But what I value is that everyone has an identity, a very strong identity to their values. Everyone thinks they're on the side that is right and doing good, and if we can value and respect that, then we're engaging with people thinking about what can they hear? What do I have to say? How can we build trust and rapport? And so that's another layer on the work that we do.
Cody Simms (06:57):
Let me pull on that thread a little bit. So let's take very, very blunt personas and say on one side of the spectrum you have people who are wholly concerned about climate change, think that fossil fuels are evil and that they should stop immediately. On the other side of the spectrum, you have people who have been working in fossil fuel their whole careers, have a profit minded orientation toward that are focused on building their career and their business in that industry. In the middle you have people who may be a little bit left or right of each other, but in general believe that there are going to be blended solutions. It's complicated. There are engineering processes that need to take into account and there's techno economic realities that need to be taken into account as well. Unpack a little bit about who you're helping to address, what kind of problems you're helping them think about.
Tisha Schuller (07:46):
On the one side, we'll call it the climate centric mindset, I think it's really important. If you're a traditional oil and gas employee, you've spent your career there, it's easy to caricature climate activists, for example, in stereotypical ways that are not helpful. So the first thing I try to do is paint a picture of individuals who believe that we have a moral obligation to get off of fossil fuels today. And I think this moral grounding is really important. This isn't just like a different enterprise. People feel in their bones that perhaps this is their life work or their motivating force. And so being just deeply respectful so that even if you sit down and you can't connect on the complexity of the energy system, you can connect on the idea of this is central to who you believe you are and what matters to you.
(08:36):
On the flip side, I would characterize say someone who's worked in the industry their whole life as feeling that they have been energizing the world and created the level of wellbeing and prosperity and raising people out of poverty that has made our entire modern life possible. So although it's easy to caricature them as like, oh, profiteer oriented, I actually know the industry to be people that are just so proud of the contributions industry has made over 150 years to bring the world to where it is today. So from that mindset, I like to then connect to that entrepreneurial mindset, that sense of pride, how are we going to lead into the next 150 years, which includes as a central tenant, decarbonization. So when I'm thinking about people from the industry, I also want to connect to the part of them that feels they have a moral obligation to contribute to the wellbeing of energizing the world, that believes they are waking up on the side of right.
(09:31):
Then I'm trying to figure out how to make connections between two good people with motivations that seem to be at cross purposes. But you'll notice there's no evil actors in my view of the world. Everyone is showing up and really I have yet to meet someone that I'm like, whoa, that person just wants to rape and pillage the earth, or that person just wants to ... I mean, there are the occasional degrowthers who say, oh, we have to reduce human population, but 99% of everyone is all about raising people out of poverty, increasing wellbeing, increasing connection to nature. I want to have conversations among good people who are then looking to understand each other.
Cody Simms (10:12):
Even in the Avengers, Thanos thought he was doing good for the world by reducing the universe's population. So I suppose bringing a point of view in that everyone thinks they're trying to do right and starting ... What I'm hearing you say though in all seriousness is starting with the idea that you're not just talking to a stereotype, but rather everyone is coming to their job with the idea of doing the thing they believe is right and how do you listen and how do you engage with your ears and not your mouth?
Tisha Schuller (10:42):
That's right.
Cody Simms (10:43):
And start from a perspective of engagement?
Tisha Schuller (10:46):
And if you are willing to just give your opponents the benefit of the doubt in these ways, it requires a totally different framing of what we're trying to accomplish, then you're not trying to win. You're not trying to run them out of business. You're not trying to essentially get the next election or the next whatever. What you're then trying to do is say, okay, in what ways is there common ground to be found? In what ways could our visions of the future ... A lot of times I, for example, try to switch orientation if I'm doing some kind of facilitation. Switch orientation to like a 30-year time horizon, this is a way to go from facing each other in opposition to facing in the same direction. In a 30-year time horizon, what things do we view the same? If you believe in pro technology evolution, if you believe in decarbonizing and continuing to reduce our environmental footprint and continuing to make energy accessible, affordable, and reliable.
(11:43):
People can agree on all these things. And so then sometimes you can work backwards and say, what are we willing to work within here? The other thing you have to do is understand your, and I'm using air quotes for opponents, but you have to understand that your "opponent's" anger, defensiveness, righteousness, if you give them the benefit of the doubt, you can kind of go, okay, that's cool. I see that. I get that. I don't need to react to that. That doesn't need to be our primary mode of engagement is your anger or your defensiveness. It also does require setting aside some of these historic, oh, you want to blame the industry for a hundred years of CO2 emissions? Okay, if you want to work in this way, you do have to at some point set a table for everyone to show up at and not be burdened with the sins of perhaps their predecessors.
Cody Simms (12:33):
Let's go into a few specifics. You had a pod episode recently on your show where you and a colleague of yours talked about a project where I believe it was in Wyoming, someone in the DAC space was proposing a direct air capture plant in Wyoming and trying to understand community-based sentiment of that. And you had some interesting takeaways there. So this is the idea of actually people "on the climate tech side" going to a more conservative community and trying to explain or understand sentiment around decarbonization based technologies. What did you learn?
Tisha Schuller (13:07):
Oh, it was so intense. Okay, so first of all, thank heavens it was a hypothetical project because if you went into any community, this sort of half-baked on understanding your community, you could kill the project before it even began. So this was a very conservative historic coal, historic oil and gas community that had seen boom and bust numerous times. So the presumption by the group, we were just observers, the presumption by the group was that this would not be a particularly pro oil and gas environment or pro fossil environment, but because the politics of the area were so conservative, identity actually trumped everything else.
Cody Simms (13:46):
I mean, it's the idea, people associate with their heart, not their wallet in many cases, right?
Tisha Schuller (13:50):
Exactly. And it was shocking, for example, I think for the group that was hosting the focus group who had come in with a lot of what I would say are sort of blue state solutions, like what role do you want labor to play? What environmental protections do you want? What community organizing resources do you require? The audience, they weren't even talking to each other. They were completely talking past each other. They're like, "We don't do labor here," for example. "Is this a Biden project? We don't want any of that Green New Deal Biden fake news in our town." And it was just so important to understand the lay of the land. And this can go of course either way, like that just generic presumption of what community you're going into and what their worldview is. Even though we were observers because we speak oil and gas, we were like, can we help you with some questions?
(14:40):
And they gave us a chance to intervene and do a little bit of translating and then what we could find is we would say, who could bring a project like this to your community that you would trust? And they literally named oil and gas companies that were out of business, no longer in business, but they were familiar. I thought that said a lot. Even in a boom bust town, there was an understanding, a familiarity, a comfort with. We would believe they named their governor. If our governor brought this to the town, we would support it. So this is just the kind of thing we need to understand about how political identity orients people to everything related to energy and climate. And the only way we can actually deescalate this polarization is if we're just deeply sensitive to it, just deeply interested in understanding what's their orientation, what's their language, what are they interested in? And we do a lot of work in environmental justice communities as well, and it's the same idea flipped differently.
(15:34):
The language, the expectations, the orientation, the presumption of guilt and innocence, those all reside in different ways, but you can transcend it. All of this tend to be pretty lightly held and you can transform it with listening and with the quality of your presence. If you move into a space and you're, I want to learn, I'm here, I care, that quality of your presence can transform what might be just entrenched polarization.
Cody Simms (16:01):
We recently had Elise Joshi from Gen-Z for Change on the show and they're a youth activist group and were one of the big proponents of the whole Stop Willow campaign, and that feels like an example of a dialogue that really broke down frankly where people on all sides weren't listening and just were angry with each other. And I'm curious how you see those happen and things you think could be done to try to find common ground or find resolution.
Tisha Schuller (16:33):
It is now more the rule than the exception that a project of any kind, an energy project doesn't even have to be traditional fossil fuel. It could be a transmission line to a renewables project. It's going to be the presumption that you're going to have entrenched opposition on two sides and an absence of incentive to dialogue. There's sort of a fear that every engagement is like an opportunity to get caught or introduce more risk. So what we really try to do, first of all, we want to introduce the idea of what is an optimistic outcome. So much of the work that we all need to do together is we need to imagine a future where we are building things and we are building them with non-traditional partners and we are building a broad tent of participants. And if we can't even imagine the sort of shared engagement and future, we don't even take those first steps to say, how am I going to talk?
(17:28):
How am I going to listen? In our work at Adamantine, we are just relentless in our optimism, in our trying to create shared visions of the future, which sounds hokey and arm wavy, but the bottom line is you're not going to actually build anything with steel unless you can imagine it first and create connections and a shared vision for it in this day and age. And so a lot of it is just relentless engagement, baby steps. Even though I want to work at global scale, everything we do that's constructive is in these tiny little incremental baby steps. All relationships are formed with the first conversation that's focused on listening. Our work goes through very systematic frameworks where there's a lot of research, then listening, then baby engagement, and then usually when successful, some form of co-creation.
Cody Simms (18:18):
I want to actually double click on the fact that you mentioned that these challenges happen not just in oil and gas projects but across any energy project today. I don't think this episode has released yet. It might by the time our conversation goes live, but I recorded recently with the head of transmission at Invenergy and talked about the wind transmission lines that they're looking to create between Kansas and Illinois, Indiana, and frankly, it is a significant process to secure all the permitting and everything you need across all the local jurisdictions to get a long clean energy transmission project like that live and available today, which is good. Of course, you want ultimately to not have big environmental problems or run a power system through an important natural resource area for sure. You want to make sure that local jobs are managed and dealt with accordingly for sure. But if you're starting from a perspective of any expansion of energy is a problem, then it's going to be hard to find common ground.
Tisha Schuller (19:16):
That's absolutely right. And one of the groups I serve on the board of is the Breakthrough Institute, which is really trying to support an optimistic pro building for the climate future approach. I just think it's so important that we know at this moment in time, it can be, this isn't a judgment, but it can be lazy to just oppose things. There are appropriate things, particularly for communities who want to engage in a meaningful way, but being an organization that stops stuff I don't think is what the world needs anymore. We need groups that have the courage to figure out what they're going to be for because the only way we're going to accelerate energy transition scale is to build or transform or upgrade a whole bunch of stuff. And that to me is why I try to think about these things as transcending political divides and more about you have proponents of a project and you have communities and a world of stakeholders, and what's the way that we're going to have stakeholders be our co-creators in building energy projects.
Cody Simms (20:20):
Obviously I'm a pragmatist. I sit in the middle of this and I do generally agree with you here. When I try to understand some of the challenges that I think people on the political left have, particularly with the expansion of oil and gas projects, I really am curious to hear your perspective on this. I hear two main arguments. One is scientific data says IPCC report, et cetera, says we should basically not be doing more fossil fuel exploration, full stop, et cetera. Two is the historical context that people believe that they've been lied to, that oil and gas companies knew about climate change for a long time and like the tobacco industry were covering it up. And from those two perspectives, I feel like you get a lot of energy on the anti-oil and gas side of things that basically says, I'm going to just say all of this is bad. How do you help your clients reconcile those historical and current with respect to IPCC reports and whatnot, challenges, and frankly in many cases, realities?
Tisha Schuller (21:27):
First I'll tell you, Cody, about my personal journey and the reason I'll do that is because for your audience, I'm not a credible narrator to answer either of those. For all the reasons we just discussed, I'm a oil and gas insider, and so what I have to say is if I were your listener, I would presume they'd be going like 30 seconds forward. So I'll tell you about my journey because what your audience doesn't know is that I was an environmental activist and then I made this slow 20 year transition to working for oil and gas and like how and why did I do that? And therefore how do I answer these questions, which is different how I advise our clients to answer these questions. On the question of we need no more fossil fuels today. The other way to look at that is in a world demanding oil and gas resources, under what conditions do we stop producing them and what are the ramifications of that?
(22:21):
And so my journey, there was a time before I ran Adamantine that I was the head of the Colorado Oil & Gas Association and I literally spent two weeks interviewing environmental activists privately to say, can we get off oil and gas? And if we can, I will quit my job and I will join the other team and we will end the production of oil and gas in Colorado because I have a lot of confidence in my capabilities. And my assessment is that we don't actually have, at scale, replacements and my assessment continues to be today I don't see the use of oil or natural gas peaking for another decade at least. And in that context, we want to produce the oil and gas that the world's requiring from the best places possible, which I would argue is largely in the US and Canada or other environmental steward allies. So there's just a wild disconnect between a worldview that says we literally need no more oil and gas today, shut her down, and what I think is just a very complex reality of demand that makes a case for we should in fact keep producing because of decline of existing resources. We have to keep producing new resources and we should produce those from the most environmentally responsible. That's my journey.
Cody Simms (23:38):
So the argument on that side is if the US were to completely divest and stop everything today, the world is going to continue to demand this stuff and you're basically pushing it off to the dark web. You're moving it to places that are not going to take the environmental protections that the US takes.
Tisha Schuller (23:53):
Exactly. And that we know have absolutely no human rights, no compunctions about all the things that we care about. So yes, thank you for finishing that thought. And then on the historical, we couldn't trust the oil and gas industry, why should we today? That is a very understandable perspective. I also find myself, because I work with people in the industry, today's oil and gas industry is almost unrecognizable from even when I started my career in the industry, which I only started working in the industry about 15 years ago, but it's almost unrecognizable. It's dominated by millennials and Gen Z. It's wildly diverse, it's very climate centric. In many ways, sometimes even people I work with who are in their fifties will say, "Gosh, when people bring up this Exxon thing, it's like I was literally in kindergarten when that happened." There isn't I think a real opportunity for us to meet the individuals and the companies where they are. I don't actually propose that anyone say, oh, the oil and gas industry and its trade associations around the world are amazing.
(24:54):
I say give individual companies, give individual projects an opportunity to prove their endeavors are authentic. My experience, we have the benefit with our firm of being very selective in the clients we take so we can turn down most of the work that comes our way. There's more well-meaning companies and projects than I could ever have capacity for, and that's because the journey toward the energy transition is directional and it's not changing. And if you're a company that has been a part of a hundred years of energy history, you want to be in the next a hundred years and that's not going to look the same. So there's a small group and we all know them well that are fighting for the past, but let them. I'm really interested in creating spaces, tents big enough for the individuals that say we want to be a part of creating the accelerating progress to the energy future at scale. Let's make a space. I don't see any downside to giving individual companies, projects and people the benefit of the doubt.
Yin Lu (25:55):
Hey everyone. I'm Yin, a partner at MCJ Collective here to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to thousands of members globally. Each week we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done. Many early stage investments have been made as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more.
(26:41):
Whether you've been in the climate space for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks, and enjoy the rest of the show.
Cody Simms (26:56):
Let's do what you suggested, which is a little bit of the shared futuring. I'm curious, today I believe fossil fuels are about 80% of the energy mix in the US today. Is that correct? Is that accurate?
Tisha Schuller (27:08):
Correct. Yeah, yeah. And globally.
Cody Simms (27:10):
And globally. What do you think our energy mix looks like in the US in a decade and in 25 years, and what do you think the path looks like as we move there?
Tisha Schuller (27:23):
Again, I want to acknowledge that I may not be a credible narrator for your audience, and so I just invite you on my journey and see if we can find common ground that is interesting. I am obsessed with reusing and repurposing as much of the traditional energy system as possible, and that means millions of miles of pipelines, millions of miles of transmission lines, refineries, mines, you name it. If we have it and it exists and we can repurpose it, we should do that because it has the smallest environmental footprint, it'll be the most affordable, and we're going to have a massive mining requirement no matter what happens. We don't need to start mining for new pipelines, for example, if we can repurpose.
Cody Simms (28:05):
We published an episode with the global head of recycling at Glencore just like a week ago from when you and I are talking.
Tisha Schuller (28:10):
Awesome. Yes, repurpose. It intuitively makes sense, and as a lifelong environmentalist, it just brings that whole idea of where can we be more efficient in our use of resources. And I think it's easy for people outside of our energy world to imagine that we're going to build a whole bunch of new stuff, but all that has to be mined and transported and built, and it's very disruptive to the environment and it has its own huge carbon footprint. So first I imagine this massive repurposing. Also, just in the oil and gas industry alone, we have over a million employees, so you also can think about what are the ways in which that workforce, scientists, engineers, literally billions of dollars of R&D, if you imagine repurposing that. So the things I'm obsessed with are to accelerate the energy transition, you are repurposing people, infrastructure and skillsets into what I call oil and gas adjacent technology.
(29:03):
So you can imagine our oil pipeline network becoming a lower carbon fuels network and then a net-zero fuels network. Same with our gas system. Our gas system could be moving lower carbon gases and then net-zero gases, and this is really important because we can use those for vehicles, we can use those for electricity, and then we can use those for industrial and hard to decarbonize. So why would we create more stuff if we could repurpose all those things? I imagine repurposing oil and gas infrastructure for geothermal, so for zero carbon electricity, and I am absolutely obsessed of course also with offsets, and this is a very just forbidden topic right now. If you really want to have the smallest environmental footprint in our energy transition, then we want to keep moving, for example, oil, but we want that oil to be net carbon zero or net carbon negative, and the only way that's going to happen is if we're in some way capturing carbon from point sources or from the air and we're sequestering it either subsurface or in products like cement.
(30:07):
When I view the energy mix, I think we accelerate progress to the extent we're willing to put our traditional industries, and I imagine you can make the same case for mining industries and maybe even coal, but those aren't my area of expertise, and we're accelerating by using all the resources to bring down the footprint. Then the amount of things we need that are new energy are limited, so you're still growing your renewables. I hope we have nuclear at scale. Imagine all the things we could do with nuclear scale, including creating, for example, more hydrogen. So I'm really excited about an energy mix that looks largely similar but is decarbonizing. I'm skeptical about the speed at which we can mine and build things, and so I'm more focused right now on figuring out how to decarbonize what we have and let others, because that's where a lot of energy is, be obsessed with the ways in which we're going to build new things. Although I'm very optimistic about small modular nuclear.
Cody Simms (31:05):
I'm struck that I'm hearing from you a vision of transition, not one of disruption.
Tisha Schuller (31:11):
Yes and no because the interesting thing is what I'm proposing is wildly disruptive to the industry, and I see it firsthand where it's in conflict with a lot of people's vision is an imagining that there is a phasing out of the traditional industry and the traditional infrastructure and the traditional resources, then all that has to be replaced. 80% of our energy system has to be replaced. I propose instead that that's transformative. Now the reason it's wildly disruptive is if you're an oil and gas company, this stuff is expensive. It has much lower margins and it's super technologically complex, and so just something as simple as sequestering carbon, like this little tiny piece of the puzzle, it's going to make less money. It's going to require all new business and market systems, and so it is wildly disruptive while being the least disruptive of energy transition options.
Cody Simms (32:02):
You had, I thought a great episode with Harry Bowcott from McKinsey on your podcast, and he talked about he sees in his worldview the traditional oil and gas companies eventually becoming one of four archetypes. There were going to be traditional, oil and gas, you said, this is what we do. We're just going to do it better, faster, cheaper. We're going to stay focused in what we do. The world might hate us, but this is what we do. The next archetype was he called them sustainable hydrocarbon players. So these were people who are still mostly in the business of oil and gas, but were investing in carbon capture, direct air capture, basically doing oil and gas in as net-zero a way as possible. We can talk about the work that we've seen Occidental, for example, do lately with carbon engineering and a lot of the work they're doing around carbon capture. There's some interesting parallels there I would think maybe in that bucket.
(32:56):
The next archetype he had was what he called a transitioning in energy supplier, which sounded like a lot about your vision of what you were talking about, which is how do you take the infrastructure from today that is doing heavily fossil fuels and leverage as much of that as possible to be in clean gases, clean fuels, hydrogen, what have you, and then also transitioning into solar into other things. We saw Exxon last week from when we were recording make an investment in lithium mining, right? So moving into that diversified energy mix. And then the fourth bucket that Harry identified were energy companies today who basically are going to stop doing fossil fuels and wholly transition into clean energy or low carbon energy suppliers. I think your point of view or his, someone's was, yeah, people are going to be across all these things and what's going to ultimately matter is how well you execute your plan, how well your leadership makes the transition into whichever of these directions you want to go. Sorry, that was a long setup for me, but I'm curious to hear a little bit more from you on that because I think it goes to what you were getting at around this disruptive transition.
Tisha Schuller (34:04):
A key point that came out of that conversation with Harry is the only option that companies don't have is to continue the status quo. I mean, that's a death now in the absence of climate. With technological change, with consumer changing preferences on how they consume energy, the only thing you can't do is exactly what you've always done. And I'm very passionate and adamant that the companies that are arguing for some reversal to a mindset of the past, we can leave them behind. I'm okay with that. The way that I've translated what Harry said is into what we call trajectories. So companies have to pick a trajectory and then within that trajectory they have to get their house in order in four components that essentially is like manager your emissions, invest in different kinds of demonstration projects. There's four components that companies work in, and what I have seen and what my next season of podcasts will be dedicated to is that the era of talking about this in an aspirational and abstract way is over.
(35:02):
And so when Harry and I were talking, we were still in the abstract area. You set your net-zero target, you maybe set aside a billion dollars and then you sort it out. Now, company leaders, if you're the head of a new ventures for a traditional oil and gas company, a year ago, everyone wanted to work for you. You were like the belle that everyone wanted to talk to at the analyst calls. Now you got the hardest job in the company because the projects that you're projecting are really hard to get built. Activists are opposing your participation in something like a hydrogen hub because you're a traditional energy company and the margins projected for the projects are significantly smaller than what the company's used to. So now we're in the era of execution, and it has to be this combination of, I continue to argue that even though it's difficult, messy, and hard, to use Harry's words, it is absolutely imperative to build trust and leadership and vision that companies continue, but the expectations with boards, with shareholders have to be different.
(36:00):
These projects are going to take a lot longer than anyone thought they would because it's really hard to build stuff and the margins are going to be different and the business models are going to change. And you can see this, you mentioned Oxy, you can see this in how Oxy's work is being received. There's a whole body of opposition building that oil and gas companies aren't allowed to play in this space. I would argue that we have enough urgency that everyone should get to play, and then it's incumbent upon each company to demonstrate their sincerity.
Cody Simms (36:28):
I think the stat is 50 plus years ago, the average lifespan of a company in the S&P 500 was decades and decades and decades. Today it's less than two decades, and that companies come and go much faster than they used to as technologies often drive those changes. In my swim lane, which is tech and internet tech, we've certainly seen that. When I started my career 25 years ago, there were a lot of companies giving lip service to, we need to transition to a technology based approach or whatever. Google, Microsoft, Apple, Amazon ate a lot of their lunch, and you've seen power accrue to the top of the pyramid in software. I am really curious how you see the business world changing in that regard over the next two decades as we move to a lower carbon or more decarbonized energy mix.
Tisha Schuller (37:20):
Let me answer that question with an idea that I want your feedback on, Cody, and your audience's feedback on because this is where I live in my own little silo and your silo might have better ideas, might improve upon my ideas. So one challenge I think is my firm gets approached by startups, let's just say you're a CO2 pipeline for CCS. They approach us to help them with their outreach or engagement strategy. There's a underestimating how complicated it's going to be to permit this stuff, to get community buy-in, to build it. Now on the other hand, we work with traditional oil and gas companies who are also in these oil and gas adjacent space, let's say a low carbon pipeline. They have no illusions how hard this is going to be, and they have 30 people dedicated to the outreach, the permitting, et cetera. So I'm starting to think that energy transition at scale will be best suited by pairing, startup, mindset, innovation, technology, but with the traditional resources of infrastructure energy companies, and that could be also utilities, transmission.
(38:25):
For example, in Colorado we have a whole bunch of little geothermal startups and then we have some big companies doing geothermal. Who's going to be able to make it through the rulemakings? Who's going to make it through ... You actually actually want to have these meetings, these pairings, and to do that, that means we can't count out traditional oil and gas companies as unviable partners by definition of who they are. I think they bring a lot to the table in terms of resources and expertise, and, if you can imagine also, there's a bunch of 30 and 40 somethings in these companies who just want to get their hands on building a new energy project. There's just the will and the expertise and the resources, and I'd like to see those paired up. I don't think we want to hand the energy transition over to a bunch of startups. I don't think that there's going to be the institutional knowledge to get it done.
Cody Simms (39:12):
It doesn't seem to me so far like a world that is a hundred percent bottoms up disrupted compared to what we saw a lot of happen in software tech. You can lock a few people in a small house in Palo Alto and invent the next big company that everything's going to gravitate toward. That doesn't seem like the case here. I see companies much more engaged in partnership, much more working toward common deployments together in this space of "climate tech" than I saw earlier in my career on the software side for sure. And my hope is that also means a more equitable future for employees that all the value doesn't just accrue to a top handful of companies and to a top handful of executives in those companies, but rather really gets distributed out across a much broader set of skill sets, backgrounds, focus areas, et cetera.
Tisha Schuller (40:07):
The great thing that's happening with the way environmental justice work is rolling out now with community benefits plans is I do think in addition to equitable distribution among employees and companies, there's also just a changing forever expectation of how communities will co-benefit and partner in ways that build. I'd like to see essentially capacity building in communities for education resources, for pipelines, for employment that this isn't like a one hit wonder. You get some infusion of cash, but you actually have this transformative partnership in communities as energy is being built out because those expectations, I think, have changed forever.
Cody Simms (40:46):
We had Jigar Shah of the DOE's LPO, Loan Programs Office, on with Ajay Kochhar of Li-Cycle, which was a recipient of couple hundred million dollars loan guarantee, and they talked a lot about the application process and how part of what Li-Cycle needed to attest to was how they were working together with the local community colleges on skills transfer and skills transition to help staff the project that the DOE was going to fund in, I believe it was Rochester, New York, if I remember correctly. And that is incredibly unique. You don't see that happen in venture capital, for example.
Tisha Schuller (41:21):
We participate in a number of the DOE projects as consultants to the project proponents, and I think we are going to see community transformation at a scale we've never seen before because of the resources that will be going in for these new builds.
Cody Simms (41:36):
Okay. I have a few other questions and I know we're coming up on time. I feel like we could go for another hour, but you're running a whole company and have lots of important work to do helping people make the transition. I'm curious how you've seen sentiments in oil and gas change over the last incredibly tumultuous five years. First with COVID, then with Russia, Ukraine, now potentially with destabilization in the Middle East with Israel-Hamas, et cetera. How are worldviews changing as our global situation has changed?
Tisha Schuller (42:07):
The driving change within oil and gas companies is the population shift. The population's just dominated by millennials and will be through 2050, and that changes everything because it's within the company, but it's also all your stakeholders are millennials and millennials are overwhelmingly pro climate action and pro purpose, and that has shifted in very meaningful ways the way that companies do all their work. Employee recruiting and retention is central, and then engagement with stakeholders in order to have the social license to operate, to build projects, that's changed forever. In terms of how one caricatures the industry, it's easy to imagine your grandparents' oil and gas companies, but really these are companies focused on building the energy future.
Cody Simms (42:51):
My grandfather ran an oil and gas company in Kansas, just for the record.
Tisha Schuller (42:55):
Amazing.
Cody Simms (42:55):
So there we go.
Tisha Schuller (42:55):
And thank you for being the shoulders on which we all stand today. It's just a given. The energy transition is a given. I don't spend a ton of energy now saying, "Hey, we should do this stuff." Everything we're talking about and working on is how do you navigate this? You still have a base business to run, and it's not like it was easy to get oil and gas to everyone around the country and around the world, and you're simultaneously inventing the future. That tension is very real. One thing we didn't talk about, but I just want to flag is also the anti-ESG sentiment. This poses actually existential threats to companies operating in, for example, red states, so they have to navigate that as well. And we do a lot of work on how to have an enduring strategy, but these pressures are real and it's never been harder to be an oil and gas employee or executive, but it's also never been more exciting, so we'll take it.
Cody Simms (43:46):
I'm not going to have you talk about anything related to politics. We are coming up in an election cycle though, and one unspoken topic I feel like in this whole world is political lobbying and how these companies are maybe saying one thing, but voting with their dollars to push policies in directions that might be counter to what they're saying. How do you recommend companies manage their lobbying dollars and lobbying activities to be aligned with a long-term vision of the way that they want to achieve and aware of short-term financial realities?
Tisha Schuller (44:24):
We advise our companies unequivocally to prioritize transparency and consistency, that there's just no world where you can hide anymore behind your trades or behind some anonymous dollars. And actually companies that are lobbying in anti-climate ways are fighting for the past also. So I would say the opportunity we have is, you can imagine Republican politicians are often putting pressures on oil and gas companies to fight for the past, to stay in the tradition. That's not helpful. So there's actually a lot of work to be done to transcend the politics of this. When climate is just an issue of the left, it actually puts all organizations in a pickle to navigate. So I'd like to transcend it, and one of the ways we could do that is by having politicians of the left create a bigger tent.
(45:13):
When you vilify oil and gas companies, you're actually just begging them to run into the arms of the anti-climate movement. Let's not do that anymore. Let's make a bigger tent. There's room for you and your civic leadership and your great ideas and your billions of dollars and your millions of employees, and let's solve this. That's what I think we should do.
Cody Simms (45:31):
Tisha, this has been so great. I didn't even mention at the top that Cully Cavness from Crusoe is who originally introduced us, and I believe you're an advisor to Crusoe Energy. They've been on the pod. We're a proud investor in them through our venture funds and love the work they're doing, and they are a good encapsulation of a lot of what you're talking about, where they are proposing a climate forward solution, one that caps methane emissions, and yet are working with oil and gas to do that and creating a very pragmatic solution in the short term. With that sentiment, I suppose, of collaboration, anything we should have talked about or any final points you want to share?
Tisha Schuller (46:07):
I just want to thank you for the work you do. I want to thank your listeners for being a part of solving and accelerating progress as opposed to entrenching and fighting, which is kind of easy and lazy. So I invite all of your listeners to make my work better by pushing on my ideas and testing what I'm doing because that's how we're all going to grow together. So Cody, thanks so much for what you're doing here.
Jason Jacobs (46:32):
Thanks again for joining us on My Climate Journey podcast.
Cody Simms (46:36):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity.
Jason Jacobs (46:45):
If you'd like to learn more about MCJ Collective, visit us at mcjcollective.com. And if you have a guest suggestion, let us know that via Twitter @mcjpod.
Yin Lu (46:58):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ venture funds, be sure to subscribe to our newsletter on our website.
Cody Simms (47:08):
Thanks, and see you next episode.
