Market Power: Enverus GM Bernadette Johnson Takes Charge

Bernadette Johnson has a prestige title at a premier industry consultancy. But it wasn’t the pursuit of an executive role that placed her in the top tier of management at Enverus shortly before she turned 40 years old.

She was following her leaders.

“I’ve wanted to work for a good leader, someone who can do something amazing,” she told Hart Energy. “I think I’ve done that throughout my whole career.”

The strategy has paved the way for Johnson to earn a reputation for expertise throughout the industry: whether providing analysis on crude oil, natural gas, the power sector or political dynamics, Johnson is a go-to source for insights on the North America and global energy markets.

Deon Daugherty: Your career began in traditional oil and gas but, like the energy industry itself, your work has evolved and now you’re running Enverus’ power and renewables (P&R) business. Tell us about your transition.

Bernadette Johnson: I took this role as general manager about two years ago, and so far, I think the most interesting thing is that it’s not very different from oil and gas. I’ve analyzed power markets as part of the overall energy mix for a long time, particularly because of the overlap with natural gas markets, but as I spend more time in the space, the similarities stand out more.

Whether it’s NIMBY (“not in my backyard”) activism like banning of renewables in various counties all over the country, price volatility, dramatic changes in the LCOE (levelized cost of energy) from renewables in the past five years (similar to the dramatic change in oil and gas prices as a result of the shale revolution), or capital investment ebbs and flows … I see things every day that remind of past times in oil and gas. This time in P&R mirrors where O&G was in 2008-2009, before the whole energy industry changed as a result of the shale revolution. 

DD: What is the dynamic of the P&R market?

BJ: One of the surprising things I’ve observed is the speed at which things are changing, despite the disconnect between the aspirational goals of policy makers and the general public and the physical science that underpins renewable energy and batteries. 

I have no doubt we’ll see some technological breakthroughs in the coming years/decades, particularly in the battery space, but in the meantime, we’re seeing key milestones: electric vehicle market share has increased to 10% of all new (light-duty) vehicles sold – much sooner than anyone thought could happen. 

DD: What are the challenges and opportunities for the businesses in the P&R space?

BJ: One of the things about the P&R market today that is similar to O&G in 2008 is a flood of capital, pace of new market entrants joining the industry, and this perception that investing in this space is easy and low risk. We saw how that unfolded for actual investors on the O&G side, and I think many of us would now say that O&G prices should have been higher and between 2009-2020 didn’t accurately capture the market and price risk inherent in commodities.

We’re doing the same thing in power. We’re overbuilding capacity in some areas, seeing congestion and bottlenecks pop up in all time, supporting projects that otherwise wouldn’t work economically with tax and policy incentives, creating more merchant risk as contract terms get shorter and shorter, seeing supply chain issues – and all of these things will continue to get worse before they get better.

This is not an easy market to invest in. However, that also creates a lot of opportunity for those market players that can accurately predict and time these events into the future. 

Where you invest, who you contract with, how you structure contracts, how you optimize your assets, etc., will make or break these investments.      

DD: How do challenges abroad play out in P&R?

BJ: I believe the Russia/Ukraine conflict has fundamentally changed the way energy markets will function in the future. The impact to commodities and pricing in the short term is just the tip of the iceberg and we’ll see the fallout for years to come. 

Even if there was a peace brokered tomorrow and Russia left Ukraine, the relative peace the west has taken for granted in the decades since the Cold War ended is over.  The idea that mutual dependence (economic and energy) is enough to prevent conflict has been dispelled and that shift is meaningful – and not just related to Russia, but other countries as well.  Whether it’s food scarcity because of fertilizer shortages, economic disruption because factories have to shut down because of gas/oil shortages and high prices, rerouting of global shipping routes, growing concerns of sensitive supply chain components …everyone has been impacted by this event, and the global economy is worse off than it was before. 

DD: Is Europe the next major market for U.S. LNG?

BJ: I do think this creates opportunities for stronger alliances between the U.S. and Europe, related to energy, but also trade in general. The global LNG import market was already growing double digit percentages before this happened and can now be expected to grow faster as those countries look to source energy and commodities from friendly nations, investment decreases in Russia impacts the long-term productivity of their resources and overall global demand for energy continues to grow. 

Europe is a very logical destination for U.S. LNG, and U.S. LNG will grow in the coming years as new export terminal begin service. We’re bottlenecked right now, but as more facilities come online, Europe, Latin/South America, and Asia will continue to be growing demand centers for us. 

DD: Hart Energy is hosting its 25 Influential Women in Energy event – which you participated in two years ago – this month, so let’s dig into the industry’s diversity a bit. Is there parity between women and men within the energy business?

BJ: When you're in it and you’ve really had an opportunity to grow your career and rise through the ranks day-to-day, it doesn’t feel like things are so bad. But that’s me and that is my experience.

When I go back to look at the data, I think it’s pretty clear that we have much more room to improve. Women only represent about 25% of workers in energy-related companies and slightly more than 32% of the renewable energy workforce, despite making up about 47% of workers broadly, according to American Progress. There are also significant wage gaps that remain. 

The statistics are clear, and we still have a ways to go to see true equal representation.  When you look at leadership metrics (women executives, managers, leaders, board seats) we also have a long way to go.

DD: Does the sector make a difference?

BJ: It's not unique to oil and gas, although there's this perception that oil and gas is an old school kind of boys’ club. The same issues exist across power and renewables and other areas.

DD: Where do you see the solutions?

BJ: I think that's the hardest thing to figure out.  Most people are doing their best and trying to do the right thing, but each company is facing unique challenges. I work within a company that's making a real effort every day to diversify our employee group, and we still have a long way to go. Figuring out how to affect change while being fair is really challenging. I don’t have the silver bullet and I don’t think one exists.  I think change happens through small decisions and behaviors every single day across a whole organization or industry that really add up to progress.

DD: What’s the point? What does pursuing diversity do for a business?

BJ: It's an imperative in a few different ways. I think it's the right thing to do, but it's also a business imperative. The research shows that businesses perform better, the more diverse they are.

When you have diversity, you have differences in thought, you have more creativity, you have folks that don’t lean toward just doing the same thing they've always done – and that can be very, very good for business. That’s what the data shows.

It’s not just the right thing to do. It’s a good business decision, and it's a good economic decision to do that early on.

DD: Where do we go from here?

BJ: We really don’t know what 2023 is going to look like. I don't know of an any industry, an economy or a business environment that's this tricky. We’re coming off of the pandemic, coming off of kind of supply chain issues, inflation pressure, the skyrocketing interest rates, Russia/ Ukraine.

I can't think of a time that's been more tumultuous. There are a lot of questions. I do think we're going to look back at ‘23 and be shocked at what played out.