The Fifth Fuel: How Hightowers Petroleum Co. Stays Energy Relevant
Energy efficiency proves innovative solution for energy industry’s future.
Energy. Long the domain of fossil fuels (coal, oil and gas) with a smattering of nuclear power thrown in, is seeing alternatives that are beginning to gain traction. Wind, solar, biofuels, tidal and wave power have been on the horizon for years but without the investment and focus given to other forms of power, they have languished in relative obscurity. International oil and gas company ExxonMobil took a look into the future of energy through 2040 with their 2019 Outlook for Energy analysis and offered seven key takeaways:
■ Energy is fundamental for modern life
■ Global energy demand had risen by 20%
■ Almost half the world’s energy is dedicated to industrial activity
■ Oil and natural gas remain important energy sources and require significant investment
■ Global electricity demand had risen 60%
■ Global energy-related CO² emissions peak, but remain above assessed 2°C scenarios
■ Commerce and trade drove transportation energy consumption up more than 25%
Enter Hightowers Petroleum Co., the largest African American-owned downstream petroleum wholesale marketer operating in the United States. The Middletown, Ohio-based firm, led by CEO and President Stephen L. Hightower, is the evolution of over 62 years of entrepreneurial leadership, beginning with Yudell and Elsie Hightower in 1957. HPC reported substantial growth in 2018, increasing its annual revenue by 60% from the previous year, to $415 million.
Hightower admits that his company was affected by the 2020 slump in oil and gas consumption. A confirmation of the slump came from the EIA (U.S. Energy Information Administration) estimating that U.S. crude oil production fell from the 2019 record level of 12.2 million b/d (barrels per day) to 11.3 million b/d in 2020. He is, however, optimistic about the future, being fully aware that as the ExxonMobil report found, oil and natural gas remain important energy sources and energy consumption will continue to rise, making his distribution business a necessity now and in the future.
But what of alternative energies and the future of the planet? In 2012, Hightower launched HP Energy Co., an energy efficiency financing, project development and project management firm. In other words, HPE is a Sustainable Energy Technology company—one that provides technologies designed to improve energy efficiency. Also known as the fifth fuel.
“For too long, we have relied on the big four—coal, petroleum, nuclear and alternatives—meeting our energy demand. The fifth fuel, energy efficiency remains a largely untapped resource in today’s world,” shares HPC COO Stephen Hightower II. On the decision to move into energy efficiency, he says, “We know that to be in business 100 years from now, we must be innovative. We recognize that nothing lasts forever so we watch the trends and recognize that this is where the energy industry is moving. We have and will continue to invest the necessary time and resources to be in place for the future.”
With industry expert Chip O’Donnell at the helm of HPE as COO, the Hightowers are walking the walk. Prior to joining them, O’Donnell led the North American business for smart grid, sustainability and energy management for Siemens Industry and HPE CTO John Picard is regarded as one of the preeminent environmental consultants in North America.
“We know energy. Our success as a business was, is, and will always be dependent on delivering the right energy solutions, one customer at a time,” Hightower says, sharing he is using his fossil fuel business to fund his energy efficiency business until one business overtakes the other and his company becomes entirely carbon neutral. Like many successful entrepreneurs, he not only watches trends but also understands that survival and growth depend on trend setting. He and his team are as dedicated to carbon reduction as they are to building their fifth fuel company.
The future of fossil fuel seems to be one of reduction but not of erasure. Energy companies will continue to develop and distribute the ‘big four’ for the foreseeable future but they are changing. According to NS Energy Business, many of the six major oil and gas companies—BP, Shell, Chevron, Total, Eni and Exxon—have pumped billions of dollars into clean energy projects. However, they only spent 1% of their combined budget on green energy projects in 2018. Not a big move, which means smaller, more agile companies like HPC may be the way the ship is turned. With growing interest in the sustainability of our fragile ecosystem and that of small, minority businesses, companies like HPC and HPE will be the ones to watch for.