Baker Hughes’ Allyson Anderson Book admits she had concerns about her job title, vice president of energy transition, when she first stepped into the role.
The title, specifically the “energy transition” part, didn’t fully reflect what is needed to reach net-zero emissions, she said. The term is not clearly defined. For some, it signals the phase out of fossil fuels; yet, for others, it depicts an energy mix with carbon abatement.
“At the end of the day, I look at this as a societal transformation,” Book told Hart Energy following her talk at the Offshore Technology Conference (OTC) in Houston in early May.
The energy technology company known for its oilfield services has brought its technology expertise into carbon capture and storage, emissions management, geothermal, hydrogen and power storage. It’s also empowering employees to take on roles as part of its “All In Carbon Out” pilot program, which was quietly rolled out internally in December. The program provides tools and framework to employees for systematically reducing operational emissions.
“Each one of us has this opportunity in the energy transition to operate in a more sustainable, responsible way and make an impact,” Book told OTC attendees, “and this is a big part of our corporate pivot.”
The pilot—more details expected in the 2022 Corporate Responsibility report—comes as the company follows through on projects like its Lifecycle Analysis program, which tracks the carbon footprint of products using data and digital technology. The process, she recalled, initially took one year each for just three of the company’s hundreds of products. That’s improved to one year for nine products thanks to technology and the work of experienced programmers.
Book sat down with Hart Energy following her talk on an OTC panel to discuss Baker Hughes’ corporate pivot as it works to meet the dual challenge of providing affordable energy more sustainably. Her words have been edited for clarity and length.
Hart Energy: Baker Hughes has shared its goals to reduce emissions by 50% by 2030 and reach net-zero by 2050. Realizing it’s still early on, what are some of the accomplishments Baker Hughes has made so far on its net-zero ambitions?
Allyson Anderson Book: We’ve been working pretty hard over the past two years is to understand the footprint of our value chain. What does that actually mean? You’ve got your upstream, how we interact with suppliers. People tend to say, ‘Oh, but we can’t control what [suppliers] do.’ Well to some degree we actually can in our purchases. We can dictate the terms as our customers do for us. So, we can sort of push our philosophy in two different directions.
We’ve worked pretty hard to look at where we have emissions in the rest of our value chain and in particular around our products. One example is we’re looking at lifecycle analysis, the broader carbon footprint, trying to speed that up [to include] more products.
HE: How does Baker Hughes balance meeting today’s energy needs with those of investors without losing focus on the core business?
AB: It’s really about transforming our core products and services, investing for growth and then getting in the new frontier space. We’re not going to move away from the core business. But what we can do in our core business today is meet energy transition needs as well as energy security needs and give our customers the core products that they’ve always counted on.
There’s a lot that we think about in terms of energy transition for our standard kit. Knowing the emissions behind our products, we have a lot of products that we didn’t have full appreciation of [and they’re] in the hands of our customers; they’re not emissive and we’ve never come out and said that. … It starts with understanding the problem and its magnitude. When you know where those emissions pockets sit, then you can say, ‘Oh, we already have a solution.’ That works out great. In some instances, we may already have a solution ready to go. We just have to connect the dots a little bit better.
HE: How is Baker Hughes leveraging its expertise in some of those sectors like hydrogen and geothermal, where there’s not much activity nowadays but it has so much potential?
AB: That answer is harder to get at. We have growth areas today that are looking at what markets look like and what the needs are, etc. The markets still have to be created through policy and better funding incentives absent carbon pricing signal. To be clear, I’m not saying set a price on carbon by having a tax. What I am saying is markets can be created for tech via de facto regulation. Investors demand it. It can be done by citizen activists. There are a range of different ways that you create demand. Governments invest a lot in R&D, and right now CCS and hydrogen are very much in that camp deep government incentive intervention.
What we look at then is how can we capitalize on that to grow a part of our business when the broader global market yet isn’t there. It comes at the nexus of having collaborative partners. The U.S. government and the EU have looked at having hubs in which companies can compete together. … When you talk about CCS or hydrogen, it’s a solution set. It’s a full system, not a product. It’s got to have a policy set; make sure you can permit the thing [project] and it’s got the right financing. We’ve got a different set of competencies that have to come on board, and that’s the muscle that literally every company’s got to work on today not just Baker Hughes. It’s going to be a challenge for most companies to think about doing it all. Maybe it’s going to be a little hard for one company to do everything.
HE: How do you think the energy industry and Baker Hughes will look in 2050?
AB: The face of energy is going to look pretty different. Whether you see society completely shifting away from conventional fossil fuels, I honestly do not believe that society can get to or should get to that. What I think is going to happen and what I want to happen are actually the same.
We’ve got to keep a pretty robust energy mix because one kind of energy doesn’t work everywhere. If we manage this sort of corporate pivot where we get more into the core business as an abatement solutions provider, that future in an energy transition is great for Baker Hughes.
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