Sempra celebrates Texas’ energy future

For decades, Texas has led the nation in energy production, including abundant natural gas as well as renewable sources like solar and wind, where Texas outpaces all other states and all but three other countries. At the same time, the state has ramped up its exports to an energy-hungry world.

Sempra Energy’s investment in Texas and its focus on becoming North America’s premier energy infrastructure company gives the company insight into key market and sector drivers for energy. These insights are guiding the company’s activity in Texas to support the state’s economic growth and prosperity.

As Sempra Energy chairman and CEO Jeff Martin remarked during his recent keynote at the Gulf Coast Power Association conference, Texas’ outsized role providing energy to America and key markets around the world is underpinned by a balanced strategy focused on production, infrastructure and technology investments. In fact, it’s Martin’s belief that the right market structure — coupled with support for the build-out of critical new infrastructure — put Texas ahead of other power markets in the U.S.

Texas has made good use of its natural resources while simultaneously facilitating the build-out of electric transmission and distribution infrastructure that has led to increased renewable adoption, all the while providing reliable and cleaner energy by using natural gas for baseload and grid support. This strong foundation is an example for the world.

Sempra in Texas

Sempra has been active in Texas for nearly 20 years, and in that time has been developing critical energy infrastructure to support the state’s growing economy and its position as a leader in energy exports.

With significant growth and innovation in the last two years, Sempra acquired approximately an 80% share of Oncor Electric Delivery Company (Oncor) – the state’s largest electric utility – in 2018.

Leveraging its liquified natural gas (LNG) success in nearby Louisiana, the company also is developing its proposed Port Arthur LNG export project, which is anticipated to support job creation and economic growth should it become the largest facility of its kind in North America. In fact, the company is already transforming the Port Arthur area through its Road for the Future project, which is already under construction.

Reasons for optimism

Sempra’s commitment goes beyond energy infrastructure and exports. In collaboration with the World Economic Forum (WEF), the company joined the electricity industry’s community of CEOs to help develop a System Value framework to help inform the journey toward a sustainable energy transition and broaden the discussion on energy opportunity. This holistic approach evaluates cleaner energy initiatives designed to optimize economic, environmental, social and technical outcomes across markets. And the Texas energy landscape is already a leader in key cleaner energy areas such as wind, solar and natural gas production.

In considering the System Value framework further, Martin, in a recent WEF editorial, shared three key policy considerations to help advance the energy transition both globally and in Texas: energy diversification, clean transportation and energy efficiency. The hope is that this becomes a global initiative that extends beyond national interests and invites the pursuit of global, collaborative solutions. From lowering emissions to improving water, air quality, human health, economic prosperity and resilience, the energy industry — and especially the way in which Texas is a leader — can help provide a strong foundation for a brighter future ahead.

Energy diversification

In 2019, global energy-related CO2 emissions were flat, while the U.S. led with the steepest emissions decline on a country basis — down 2.9%, according to the International Energy Agency (IEA). Yet as the world’s advanced economies are expected to continue making great strides in reducing emissions, future success will also depend on the energy priorities pursued by developing nations.

By 2040, 90% of global electricity demand growth is projected to come from those very countries, according to the IEA. To enhance their energy security, countries have historically favored local, accessible fuel resources with lower costs, such as coal. If advanced economies want to make continued global progress in emissions declines, they must provide financial and technological support to make broader and cleaner energy choices more accessible in developing markets.

LNG is one such choice. Sempra believes it’s crucial to cultivate LNG resources in established export markets, and in the development of regasification facilities in emerging markets. As the lowest-carbon fossil fuel, natural gas supports diversification and security as part of an overall energy plan. Natural gas is also a natural partner to renewables, and Texas has shown its understanding of the synergies needed to both reduce emissions and increase renewable adoption through the utilization of natural gas and robust infrastructure investment.

Energizing future growth in Texas

Sempra believes the energy industry will see more change in the next 20 years than in the previous 50 years. In the face of this transformation, it will be important to maximize a System Value framework by focusing on energy diversification, emissions reduction and energy efficiency.

By embracing the challenges and seizing the opportunities of this age, the energy industry can help lead the way forward and, along the way, help to forge a bold new tomorrow for Texas as well as our world.