Can Houston stay a leader in the future of energy? Scott Nyquist weighs in. Photo via Getty Images

Houston has a legacy in in the energy industry — but can it remain the energy capital of the world? In short, yes.

That may sound counterintuitive, given that the energy system is transitioning — slowly, but inexorably — away from the city’s strengths in oil and gas. But that is the point: to an extent that may be overlooked, the O&G industry is critical to the transition, in two ways. Houston is well placed to take the lead on both.

First, there is the simple fact that oil and gas are essential, and will be for decades to come. About 99 percent of vehicles on the road right now use fossil fuels, and there are no readily available substitutes for their uses as feedstock for other industries, such as chemicals. Oil and gas account for almost 70 percent of US primary energy demand.

I do believe that their influence will diminish, as the energy system transitions to cleaner, lower-emission sources. McKinsey’s most recent Global Energy Perspective projected demand for oil will peak by 2027 and for gas a decade later. The International Energy Agency (IEA) sees the same evolution, but somewhat more slowly. Even after demand peaks, whenever that is, oil and gas will still be used, just not as much. I don’t see any reasonable scenario in which oil and gas disappears or is left in the ground for decades to come.

Second, and more interestingly, the O&G industry itself is essential to the goal of reducing greenhouse-gas emissions. If that sounds counterintuitive, too—well, it is. But bear with me. Under almost all emissions-reduction scenarios, carbon capture and storage (CCS), including direct air capture, and hydrogen play huge roles--accounting for more than 20 percent of future cuts in the IEA’s projection, for example. The Intergovernmental Panel on Climate Change also sees a big role for CCS, while noting that “global rates of CCS deployment are far below those in modelled pathways limiting global warming to 1.5°C or 2°C.” In other words, it matters, and there’s not enough of it. Hydrogen has been many people’s favorite technology of the future since at least the 1990s; the World Energy Council says it could account for as much as 25 percent of total final energy consumption by 2050, though likely less.

Let’s consider CCS first. This refers to reducing carbon-dioxide (CO2) emissions, particularly from industry, by capturing it on-site and then storing it underground: it is therefore never released into the atmosphere. Direct air capture sucks out carbon from the atmosphere, and then stores it. There is more than enough storage capacity, according to the IEA, and the technologies work.

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Credit: Global CCS Institute

The problem has been regulation and economics—CCS is relatively expensive. About half of US emissions come from power generation and industry, such as cement; carbon capture works for both. And that is just what is possible now. Eventually, captured CO2 could be used to make a wide array of products, including building materials, carbon fiber, synthetic fuels, and plastics.

The Biden Administration is allocating $3.5 billion for direct air capture projects and $8 billion for hydrogen; those are not huge sums, given how costly large-scale energy projects are, but it just might be the beginning of bigger things. In addition, companies that have committed to net zero are beginning to put serious money behind carbon capture—almost $2 billion so far this year, compared to just $50 million in the past.

All this is relevant to Houston because Texas is the largest single US producer of both oil and gas, and these are the only players that now routinely use CCS, for gas processing and enhanced oil recovery. Houston is, by far, the national leader in carbon capture. Moreover, CCS can help to scale up “blue” or lower-emissions hydrogen, which could be an even bigger opportunity.

Hydrogen is not a source of energy, but a carrier of it. Once the hydrogen is produced—that is, separated from other elements, such as the oxygen in water—it can be stored and then released, either through combustion or via a fuel cell that converts hydrogen into electricity. Hydrogen could be used in a wide variety of ways, including powering vehicles, heating buildings, and fueling industry. Indeed, its potential is so broad and deep that the Hydrogen Council (with help from McKinsey) estimated late last year that hydrogen could contribute more than 20 percent of emissions abatement to 2050. The Council is a trade group and may therefore be a little optimistic (or a lot), but no one questions the potential of hydrogen in cutting emissions.

Right now, the primary use of hydrogen is in oil refining, which is one of Houston’s major industries. In addition, O&G companies are already looking into the conversion of methane in natural gas to hydrogen as well as the possibility of blending hydrogen into natural gas to lower the carbon content.

The Houston region already produces and consumes a third of the nation’s hydrogen, and is home to most of its dedicated hydrogen pipelines; its massive and efficient pipeline and transport system for gas can be adapted to move hydrogen. For the production of “green” or very-low emissions hydrogen, Houston also has a significant—and growing--renewable energy infrastructure. Indeed, if Texas was a country, it would be the world’s fifth-largest generator of wind power, and it is second in solar in the United States.

In short, when it comes to hydrogen, Houston is well ahead of the competitive pack, not only in physical terms, but in the human expertise that will count most of all to turn hydrogen from boutique to big. According to a recent report by the Center for Houston’s Future, Houston-based hydrogen assets could abate 220 million tons of carbon emissions by 2050, or more than half of Texas’s current emissions. Plus, it could create $100 billion in economic value.

The bottom line: there is no practical emissions reduction on the scale that the United States has committed to—net zero by 2050—without the development of CCS and hydrogen. And the O&G industry is leading the way in both these technologies. That puts Houston in an enviable position to both be part of the transition and to benefit from it. All told, according to the Houston Energy Transition Initiative, which includes 17 major energy-industry players, the region could gain up to 400,000 jobs in an accelerated scenario of adopting lower-carbon technologies. (McKinsey helped with this research, too.) To use a term beloved of consultants, that looks like a win-win.

Houston calls itself the “energy capital of the world”—and this isn’t a case of all hat and no cattle. The city is home to a critical mass of capital, innovation, expertise, and entrepreneurship. To continue to deserve that title, however, will require Houston to embrace the challenge of the energy transition: providing the reliable energy the world needs while also reducing emissions.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn.

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3 energy transition cos. in the running for Houston Startup of the Year

People's Choice

We're just two weeks away from the 2025 Houston Innovation Awards, presented by InnovationMap.com, and while an expert panel of judges will determine the winners in most categories, one award is up to the public.

Voting is now open for 2025 Houston Startup of the Year, the people's choice award. Six exceptional finalists are in the running for the title, including three from the energy transition sector.

From next-gen biobased materials to technology that creates chemicals without carbon emissions, these companies are shaping the future.

Read about all of the Startup of the Year finalists and their missions below, then cast your vote. You can vote once per day through November 12.

The winner, along with winners in all other categories, will be revealed live on November 13 at Greentown Labs. Tickets to the 2025 Houston Innovation Awards are available now — get yours today.

2025 Houston Startup of the Year finalists:

Eclipse Energy

Eclipse Energy, previously known as Gold H2, is a climatetech startup converting end-of-life oil fields into low-cost, sustainable hydrogen sources. The company completed its first field trial this summer, which demonstrated subsurface bio-stimulated hydrogen production. Eclipse Energy says Its technology could yield up to 250 billion kilograms of low-carbon hydrogen.

Rheom Materials

Rheom Materials is a next-generation startup developing biobased materials for a more sustainable future. Its two flagship offerings are Shorai, a sustainable leather alternative that is usable for apparel, accessories, car interiors, and more, and Benree, an alternative to plastic without the carbon footprint.

Solidec

Solidec is a chemical manufacturing company developing autonomous generators that extract molecules from water and air and convert them into pure chemicals and fuels that are free of carbon emissions. The technology eliminates the need for transport, storage, and permitting.

FlowCare

FlowCare is developing a period health platform that integrates smart dispensers, education, and healthcare into one system to make free, high-quality, organic period products more accessible. FlowCare is live at prominent Houston venues, including Discovery Green, Texas Medical Center, The Ion, and, most recently, Space Center Houston, helping make Houston a “period positivity” city.

MyoStep

MyoStep is a next-generation, lightweight, soft exoskeleton developed at University of Houston for children with cerebral palsy. The soft skeleton aims to address motor impairments that impact their ability to participate in physical activities, self-care, and academics, via an affordable, child-friendly solution that empowers mobility and independence.

Persona AI

Persona AI is a humanoid robotics startup that is creating rugged, autonomous robots for skilled, heavy industry work for various "4D" (dull, dirty, dangerous, and declining) jobs. In May, the company announced a memorandum of understanding with HD Korea Shipbuilding & Offshore Engineering, HD Hyundai Robotic, and Vazil Company to create and deploy humanoid robots for complex welding tasks in shipyards. The project will deliver prototype humanoids by the end of 2026.

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The Houston Innovation Awards program is sponsored by Houston Community College, Houston Powder Coaters, FLIGHT by Yuengling, and more to be announced soon. For sponsorship opportunities, please contact sales@innovationmap.com.

What to expect from the 2025 Greentown Labs' Climatetech Summit Houston

where to be

Greentown Labs' Climatetech Summit Houston will take place next Tuesday, Nov. 4, bringing together philanthropists, executives and innovators in the energy transition space.

John Arnold, co-founder and co-chair of Arnold Ventures, will participate in the keynote fireside chat with Greentown CEO Georgina Campbell Flatter. The conversation will explore "top priorities and opportunities in energy innovation today—with a special focus on how these dynamics are playing out in Houston," according to Greentown.

Other highlights will include:

  • Welcome remarks from Houston Mayor John Whitmire
  • A course led by TEX-E Executive Director Sandy Guitar
  • A philanthropy panel featuring Greentown Labs new Head of Philanthropy Stacey Harris
  • The Energy Jobs of the Future, featuring Sameer Bandhu, GE Vernova’s managing director, ventures and licensing
  • An Energy-transition Roadmap, featuring Monica Krishnan, Hermann Lebit and Bobby Tudor and moderated by Varun Rai
  • What is Climatetech? featuring Kyle Judah, Emerson Denka Wangdi, Laureen Meroueh and Head of Greentown Houston Lawson Gow

Ten Greentown Labs startups will also present their pitches at the event. Expect to hear from:

  • MCatalysis Inc. CEO, President, and Founder Michael D. Irwin. Dallas-based MCatalysis develops novel, high-efficiency industrial microwave processes and catalysts to produce low-cost, clean synthetic fuels and chemicals from waste carbon resources.
  • Pike Robotics CEO and co-founder Connor Crawford. Austin-based Pike Robotics provides next-gen robotic solutions for in-service inspection of floating roof storage tanks.
  • Helix Earth CEO and co-founder Rawand Rasheed. Houston-based Helix Earth retrofits commercial HVAC systems to improve energy efficiency.
  • 10DQ CEO Steven Reece. Greentown Boston member 10DQ has developed its Redox Loop Battery, which uses novel, water-based electrolytes to store energy in dense, low-cost, earth-abundant battery materials.
  • Janta Power CEO Mohammed Njie. Dallas-based Janta Power is developing 3D solar towers.
  • Neuralix business operations and product developer Annorah Lewis. Houston-based Neuralix offers a suite of rapid, customizable templates for the data lifecycle for the energy and manufacturing sectors.
  • Ententia co-founder Nishant Shah. Houston-based Etenitia develops enterprise AI platforms and systems that use domain expertise, rich multi-modal industrial datasets, and generative AI technology to power more effective and efficient business workflows.
  • Locoal CEO Miles Murray. Boerne, Texas-based Locoal is a waste-to-energy company that has developed a proprietary mobile containerized fluidized gasifier that diverts waste, converts it to clean energy and captures carbon in value-added co-products.
  • SpiralWave co-founder Adam Amad. San Francisco-based SpiralWave has developed novel electrochemical carbon capture technology that lowers costs.
  • Biatech founder and CEO Nathan Hartwig. Tampa-based Biatech has built an application-layer AI platform to help energy, mining and infrastructure operators optimize asset performance, reduce risk and improve decision-making.

In addition to the startup pitches, attendees will also be able to meet founders and Greentown members during the afternoon startup showcase. A networking reception at Axelrad Houston follows. A separate ticket offers admission to the showcase and networking event only.

See the full agenda here.

California company launches Tesla Megapack battery project in Houston area

power on

Oakland, California-based Nightpeak Energy announced earlier this month that its 150-megawatt battery storage project in Brazoria County, known as Bocanova Power, is now operating to address Houston’s peak capacity needs.

“This battery storage project will enhance grid reliability in the Alvin area while continuing to support integrating renewable energy,” Cary Perrin, president and CEO of the Northern Brazoria County Chamber of Commerce, said in a news release. “I believe we need energy storage now more than ever for its pivotal role in reducing strain on the grid while meeting fast-growing power demand in Texas and Brazoria County."

The project reached commercial operation in August, according to the release. The project utilizes Tesla's Megapack 2 XL battery storage system, and the facility operates under a long-term power purchase agreement with an undisclosed “investment-grade power purchaser.”

“Bocanova Power demonstrates the speed at which Nightpeak Energy is overcoming complex challenges to energize projects that support America's growing need for affordable, reliable, and secure energy,” Paris Hays, co-founder and CEO/CDO of Nightpeak Energy, added in the news release. “Unprecedented AI data center and manufacturing growth has only accelerated the need for these resources.”

Hays added in the release that the company has plans for more energy infrastructure projects in Texas and in the Western U.S.

Nightpeak Energy develops, owns and operates power plants that support the growing capacity needs of a decarbonized grid. It also owns and operates 240 MW of battery storage and natural gas generation facilities.

The company was founded in 2022 and backed by equity funding of up to $200 million from Dallas-based investment firm Energy Spectrum Capital.