The HC Commodities Podcast
Episode Title: Important, Growing in Demand and Hard: Energy with Mike Howard
Host: Paul Chapman (HC Group)
Guest: Mike Howard (Founder and CEO, Howard Energy Partners)
Date: February 4, 2026
Episode Overview
In this episode, Paul Chapman sits down with Mike Howard, Founder and CEO of Howard Energy Partners, to discuss the foundational truths about energy: its importance, growing demand, and the complexities of delivering it. Using Texas as a microcosm, they unravel the energy trilemma, explore the legacy and future of the US shale revolution, examine market design challenges, and dive deep into the implications of surging power demand from AI and data centers. The conversation blends high-level strategy, policy, and boots-on-the-ground realities, with Texas’ unique position in global energy markets as the backdrop.
Key Discussion Points & Insights
1. Mike Howard’s Background and Energy Philosophy
[02:13 – 04:37]
- Mike Howard describes his journey from a chemical engineer to founding the largest privately owned midstream company in the US.
- Early exposure to energy in South Texas during an era of workforce shortages and technological advancement.
- Philosophy: Inspired by Clay Gaspar’s observation, Howard organizes his thinking—and his business—around three truths:
- Energy is important
- Energy demand is growing
- Energy is hard
“Energy is important, energy demand is growing and energy is hard. And I’ve really done a deep dive on those three foundational truths and kind of built our company to meet the demands of those truths.”
— Mike Howard [03:19]
2. The Shale Revolution: Why It Happened in Texas
[04:37 – 11:19]
- The shale revolution in the US is described as a transformative and unlikely event, primarily enabled by:
- Private property rights
- Risk-taking private capital
- Massive, iterative experimentation and rapid innovation
- The economic and geopolitical impact is unmatched: gas and oil production has tripled, making the US a leading exporter, reducing domestic and allied energy costs.
- The revolution is unique to the US; Howard asserts, “could it happen anywhere else? No.”
“Every well drilled in the US is a scientific experiment. And the beneficiary of that experiment is private property owners. ...20 years of compounded innovation.”
— Mike Howard [09:38]
3. Energy is Important: The Moral and Economic Case
[12:10 – 15:22]
- Howard’s journey to understand energy’s role in society led him from consideration of renewables to a nuanced view of the energy system's moral, technical, and thermodynamic realities.
- Cites the direct link between energy consumption and human flourishing: “countries that use more energy have cleaner water, cleaner air, better education, longer lifespans...”
- Howard clarifies the debate isn’t fossil vs. renewables, but the fundamental need for abundant, reliable energy.
“If you are anti-energy, you potentially are anti-human because we work to make a really unsafe environment safe. And the way we do that is we impact the environment in a positive way to help humans thrive.”
— Mike Howard [14:06]
4. Energy Poverty & Global Development
[20:02 – 21:33]
- Howard argues energy access is the world’s number one development challenge, calling out how well-intentioned but restrictive funding has sometimes made things worse for developing nations.
- “Energy alone doesn’t cure poverty, but you can’t cure poverty without energy.” (Scott Tinker, as quoted by Howard)
“We kind of left out reliability. We left out energy access. We started restricting energy to countries that if they were not going to use renewables... I’m glad we’re kind of evolving from that.”
— Mike Howard [20:27]
5. Texas as a Microcosm: Deregulation and Market Design Challenges
[23:39 – 37:01]
- Texas, while a massive energy producer with advanced renewables and fossil assets, has the highest electricity prices in the South, revealing market distortions.
- The state’s “deregulated” energy market inadvertently failed to price reliability, leading to underinvestment in dispatchable power (gas, coal, nuclear) while massive wind/solar were incentivized.
- Political reluctance to allow market prices to rise to levels that encourage new dispatchable investment has worsened reserve margins.
- Result: Texas suffers blackouts despite tremendous energy resources and is now facing rapidly growing demand from data centers and LNG exports.
“Texas already pays the highest residential electricity price in the south and we produce the natural gas that the south uses to produce their electricity... and it has to go up.”
— Mike Howard [30:37]
6. The Coming Wave: AI, Data Centers & Grid Pressure
[39:01 – 44:21]
- There’s more capital being allocated to AI/data center construction in the US than all other commercial buildings combined.
- Data centers’ power requirements are unprecedented: “a data center that starts at a gigawatt and goes up to 5 gigawatts” compared to the largest previous industrial users at 300 MW.
- Growth expectations are staggering: possible 5% annual US electricity demand growth, unseen since post-World War II. Meeting this growth faces major physical constraints.
- While free-market innovation will drive some efficiency, historical data suggests anytime commodity use becomes cheaper/easier, more of it gets used.
“We have never built a gigawatt power source behind a meter for a factory... and we’re talking about data centers that start at a gigawatt and go up to 5 gigawatts.”
— Mike Howard [40:08]
7. Infrastructure Investment: Navigating Hype, Subsidies & Thermodynamics
[46:29 – 49:31]
- Howard Energy has deliberately avoided projects that rely solely on government incentives, focusing on real customer demand and fundamental economics.
- They manage risk by only investing when counterparties assume the policy/subsidy risk.
- On technologies like hydrogen: “We’re chemical engineers. We know how to do it. These are not technological problems, they’re economic problems.”
“It never felt right to us to only use government subsidies as the foundation for allocating capital... if you want to pay for that, we will build it for you, but we’re not going to take the risk.”
— Mike Howard [47:07]
8. Mexico’s Missed Opportunity and Ongoing Energy Needs
[49:31 – 52:57]
- Mexico’s initial moves toward energy liberalization in the 2010s gave way to a policy reversal under AMLO, stalling domestic production growth.
- Howard: Nearshoring is driving demand, but private innovation and property-rights based incentives are lacking in Mexico itself.
- Howard Energy continues to provide pipeline capacity for US natural gas to Mexico, with capacity fully used and demand growing.
“We provide natural gas to them through these pipelines and we’re expanding those pipelines. But we wouldn’t do it without Mexican ownership in our pipeline... But we don’t see a trend where they can arrest their decline of production just under their structure.”
— Mike Howard [51:12]
9. The Role of Midstream and Closing Thoughts
[53:13 – 54:14]
- Howard Energy’s core: providing midstream services (gathering, processing, refining, exporting) for oil, gas, and refined products—especially to/from and within Texas and Mexico.
- Howard emphasizes being a long-term, privately-owned company capable of playing the long game in complex markets.
Notable Quotes & Timestamps
- “Energy is important, energy demand is growing and energy is hard.” — Mike Howard [03:19]
- “Every well drilled in the US is a scientific experiment...20 years of compounded innovation.” — Mike Howard [09:38]
- “If you are anti-energy, you potentially are anti-human because we work to make a really unsafe environment safe.” — Mike Howard [14:06]
- “Energy alone doesn’t cure poverty, but you can’t cure poverty without energy.” — Scott Tinker quoted by Mike Howard [21:33]
- “Texas already pays the highest residential electricity price in the south and we produce the natural gas that the south uses to produce their electricity... and it has to go up.” — Mike Howard [30:37]
- “We have never built a gigawatt power source behind a meter for a factory... and we’re talking about data centers that start at a gigawatt and go up to 5 gigawatts.” — Mike Howard [40:08]
- “These are not technological problems, they’re economic problems.” — Mike Howard [48:40]
Important Timestamps
- [02:13] — Mike Howard’s background & energy philosophy
- [05:48] — The unique confluence behind the US shale revolution
- [12:10] — Energy as a moral, thermodynamic, and economic imperative
- [20:02] — Energy poverty as the central global development challenge
- [23:39] — How Texas’ market design led to today’s reliability crisis
- [30:37] — Texas’ high energy prices and grid vulnerabilities
- [39:01] — The scale and impact of AI/data center-driven energy demand
- [46:29] — Capital allocation discipline: only betting on real economics
- [49:31] — The challenges and prospects of Mexico’s energy markets
Memorable Moments
- The candid admission from Howard, a lifelong free-market advocate, that “I can’t believe I’ve come to this area where I’m almost arguing for regulation” in the face of Texas’ current energy market dysfunction. [27:55]
- Parallel between shale innovation and anticipated innovation in data center power demand—highlighting the relentless, iterative nature of US energy progress.
- The analogy of dispatchable power to babysitters: “Are you going to pay for a babysitter that’s only showing up 30% of the time?” [34:09]
- The punchline on market distortions and moral hazard: Power traders and investors made fortunes during Texas’ extreme events, but the system didn’t correct itself with new investment as it should. [35:36]
Tone and Style
Throughout, the tone is pragmatic, open, data-driven, and candid. Humor and humility appear as Howard and Chapman both acknowledge the complexities and tradeoffs in market design, technological optimism, and real-world policy.
For Further Inquiry
- For those interested in collaborating or learning more about Howard Energy Partners’ capabilities, visit their site or contact them for midstream solutions, especially involving North American energy flows.
- Both speakers are eager to see more young talent join the sector and may revisit this topic in a future discussion.
This summary is designed for listeners and non-listeners alike, capturing the nuance, expertise, and real-world energy dilemmas featured in this essential episode.