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The Next Major Wildcard For Oil

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Billionaire Trader: Seismic Shift Is Taking Place In Houston Oil Patch

The energy industry in Houston is in the midst of a “seismic shift” with much of the discussion and funding now focused on clean energy instead of on oil and gas as it was typical until a year ago, according to John Arnold, who has earned a fortune from trading and was the former head of natural gas derivatives trading at Enron.

“There’s been seismic shift in the Houston energy industry of late,” Arnold wrote in a Twitter thread this week.

While most of the talk in Houston’s energy scene last year was about oil and gas and a denouncement of renewables, now the tables have turned, he said.

“Three-quarters of discussions now are about wind, solar, batteries, transmission, lithium, cleantech, etc. Even those who are not ideological believers are taking the cues from the financial markets, which have no interest in oil production growth anymore,” wrote Arnold, once dubbed “king of natural gas” by his former colleagues at Enron, and now co-chair of Arnold Ventures.

The legendary trader notes that financial markets are rewarding industries with high growth potential, such as clean energy, at the expense of the oil and gas sector. Moreover, capital for fossil fuels has dried up, Arnold says.

“Every energy PE firm in town is raising $ for clean energy (good luck pitching an oil fund to a university endowment now,” he wrote.

“The shift has made me more optimistic about future of Houston and speed of decarbonization. The latter requires enormous scale and financial resources that large companies possess. The fossil fuel industry has that expertise and is now focusing on a low carbon future,” Arnold added. 

In a sign that venture capitalists believe that clean energy is the future of Houston, venture capital fund manager Energy Transition Ventures said earlier this month that it had launched the first venture fund in Texas that would exclusively invest in energy transition technologies.  

By Tsvetana Paraskova for Oilprice.com

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