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ExxonMobil pauses plans for $7B hydrogen plant in Baytown

project on pause

ExxonMobil Chairman and CEO Darren Woods said the company was weighing whether it would move forward with a proposed $7 billion low-hydrogen plant in Baytown this summer. Photo via exxonmobil.com

As anticipated, Spring-based oil and gas giant ExxonMobil has paused plans to build a low-hydrogen plant in Baytown, Chairman and CEO Darren Woods told Reuters.

“The suspension of the project, which had already experienced delays, reflects a wider slowdown in efforts by traditional oil and gas firms to transition to cleaner energy sources as many of the initiatives struggle to turn a profit,” Reuters reported.

Woods signaled during ExxonMobil’s second-quarter earnings call that the company was weighing whether it would move forward with the proposed $7 billion plant.

The Biden-era Inflation Reduction Act established a 10-year incentive, the 45V tax credit, for production of clean hydrogen. But under President Trump’s One Big Beautiful Bill Act, the period for beginning construction of low-carbon hydrogen projects that qualify for the tax credit has been compressed. The Inflation Reduction Act called for construction to begin by 2033. The Big Beautiful Bill changed the construction start time to early 2028.

“While our project can meet this timeline, we’re concerned about the development of a broader market, which is critical to transition from government incentives,” Woods said during the earnings call.

Woods had said ExxonMobil was figuring out whether a combination of the 45Q tax credit for carbon capture projects and the revised 45V tax credit would enable a broader market for low-carbon hydrogen.

“If we can’t see an eventual path to a market-driven business, we won’t move forward with the [Baytown] project,” Woods told Wall Street analysts.

“We knew that helping to establish a brand-new product and a brand-new market initially driven by government policy would not be easy or advance in a straight line,” he added.

ExxonMobil announced in 2022 that it would build the low-carbon hydrogen plant at its refining and petrochemical complex in Baytown. The company had indicated the plant would start initial production in 2027.

ExxonMobil had said the Baytown plant would produce up to 1 billion cubic feet of hydrogen per day made from natural gas, and capture and store more than 98 percent of the associated carbon dioxide. The plant would have been capable of storing as much as 10 million metric tons of CO2 per year.

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Chevron plans to launch its first AI data center power project in West Texas in 2027. Photo via Chevron.com

Chevron and ExxonMobil feed the need for gas-powered data centers

data center demand

Two of the Houston area’s oil and gas goliaths, Chevron and ExxonMobil, are duking it out in the emerging market for natural gas-powered data centers—centers that would ease the burden on electric grids.

Chevron said it’s negotiating with an unnamed company to supply natural gas-generated power for the data center industry, whose energy consumption is soaring mostly due to AI. The power would come from a 2.5-gigawatt plant that Chevron plans to build in West Texas. The company says the plant could eventually accommodate 5 gigawatts of power generation.

The Chevron plant is expected to come online in 2027. A final decision on investing in the plant will be made next year, Jeff Gustavson, vice president of Chevron’s low-carbon energy business, said at a recent gathering for investors.

“Demand for gas is expected to grow even faster than for oil, including the critical role gas will play [in] providing the energy backbone for data centers and advanced computing,” Gustavson said.

In January, the company’s Chevron USA subsidiary unveiled a partnership with investment firm Engine No. 1 and energy equipment manufacturer GE Vernova to develop large-scale natural gas power plants co-located with data centers.

The plants will feature behind-the-meter energy generation and storage systems on the customer side of the electricity meter, meaning they supply power directly to a customer without being connected to an electric grid. The venture is expected to start delivering power by the end of 2027.

Chevron rival ExxonMobil is focusing on data centers in a slightly different way.

ExxonMobil Chairman and CEO Darren Woods said the company aims to enable the capture of more than 90 percent of emissions from data centers. The company would achieve this by building natural gas plants that incorporate carbon capture and storage technology. These plants would “bring a unique advantage” to the power market for data centers, Woods said.

“In the near to medium term, we are probably the only realistic game in town to accomplish that,” he said during ExxonMobil’s third-quarter earnings call. “I think we can do it pretty effectively.”

Woods said ExxonMobil is in advanced talks with hyperscalers, or large-scale providers of cloud computing services, to equip their data centers with low-carbon energy.

“We will see what gets translated into actual contracts and then into construction,” he said.

Deloitte predicts AI will represent 57 percent of IT spending by U.S. oil and gas companies in 2029. Photo via Unsplash.

Energy sector AI spending is set to soar to $13B, report says

eyes on ai

Get ready for a massive increase in the amount of AI spending by oil and gas companies in the Houston area and around the country.

A new report from professional services firm Deloitte predicts AI will represent 57 percent of IT spending by U.S. oil and gas companies in 2029. That’s up from the estimated share of 23 percent in 2025.

According to the analysis, the amount of AI spending in the oil and gas industry will jump from an estimated $4 billion in 2025 to an estimated $13.4 billion in 2029—an increase of 235 percent.

Almost half of AI spending by U.S. oil and gas companies targets process optimization, according to Deloitte’s analysis of data from market research companies IDC and Gartner. “AI-driven analytics adjust drilling parameters and production rates in real time, improving yield and decision-making,” says the Deloitte report.

Other uses for AI in the oil and gas industry cited by Deloitte include:

  • Integrating infrastructure used by shale producers
  • Monitoring pipelines, drilling platforms, refineries, and other assets
  • Upskilling workers through AI-powered platforms
  • Connecting workers on offshore rigs via high-speed, real-time internet access supplied by satellites
  • Detecting and reporting leaks

The report says a new generation of technology, including AI and real-time analytics, is transforming office and on-site operations at oil and gas companies. The Trump administration’s “focus on AI innovation through supportive policies and investments could further accelerate large-scale adoption and digital transformation,” the report adds.

Chevron and ExxonMobil, the two biggest oil and gas companies based in the Houston area, continue to dive deeper into AI.

Chevron is taking advantage of AI to squeeze more insights from enormous datasets, VentureBeat reported.

“AI is a perfect match for the established, large-scale enterprise with huge datasets—that is exactly the tool we need,” Bill Braun, the company’s now-retired chief information officer, said at a VentureBeat event in May.

Meanwhile, AI enables ExxonMobil to conduct autonomous drilling in the waters off the coast of Guyana. ExxonMobil says its proprietary system improves drilling safety, boosts efficiency, and eliminates repetitive tasks performed by rig workers.

ExxonMobil is also relying on AI to help cut $15 billion in operating costs by 2027.

“There is a concerted effort to make sure that we’re really working hard to apply that new technology … to drive effectiveness and efficiency,” Darren Woods, executive chairman and CEO of ExxonMobil, said during a 2024 earnings call.

The new Carbon Measures coalition will create a framework that eliminates double-counting of carbon pollution and attributes emissions to their sources. Photo via Getty Images.

Major Houston energy companies join new Carbon Measures coalition

green team

Six companies with a large presence in the Houston area have joined a new coalition of companies pursuing a better way to track the carbon emissions of products they manufacture, purchase and finance.

Houston-area members of the Carbon Measures coalition are:

  • Spring-based ExxonMobil
  • Air Liquide, whose U.S. headquarters is in Houston
  • Mitsubishi Heavy Industries, whose U.S. headquarters is in Houston
  • Honeywell, whose Performance Materials and Technologies business is based in Houston.
  • BASF, whose global oilfield solutions business is based in Houston
  • Linde, whose Linde Engineering Americas business is based in Houston

Carbon Measures will create an accounting framework that eliminates double-counting of carbon pollution and attributes emissions to their sources, said Amy Brachio, the group’s CEO. The model is expected to take two years to develop, and between five and seven years to scale up, Bloomberg reported.

The coalition wants to create a system that will “unleash markets and competition,” unlock investments and speed up the pace of emissions reduction, said Brachio, former vice chair of sustainability at professional services firm EY.

“If you can’t measure it, you can’t manage it,” said Darren Woods, chairman and CEO of ExxonMobil. “The first step to reducing global emissions is to know where they’re coming from — and today, we don’t have an accurate system to do this.”

Other members of the coalition include BlackRock-owned Global Infrastructure Partners, Banco Satanader, EY and NextEra Energy.

“Transparent and consistent emissions accounting is not just a technical necessity — it’s a strategic imperative. It enables smarter decisions and accelerates real progress across industries and borders,” said Ken West, president and CEO of Honeywell Energy and Sustainability Solutions.

ExxonMobil is on Fortune's first-ever AIQ ranking. Getty Images

2 Houston energy giants appear on Fortune’s inaugural AI ranking

AI Leaders

Two Houston-area energy leaders appear on Fortune’s inaugural list of the top adopters of AI among Fortune 500 companies.

They are:

  • No. 7 energy company ExxonMobil, based in Spring
  • No. 47 energy company Chevron, based in Houston

They are joined by Spring-based tech company Hewlett Packard Enterprise, No. `19.

All three companies have taken a big dive into the AI pool.

In 2024, ExxonMobil’s executive chairman and CEO, Darren Woods, explained that AI would play a key role in achieving a $15 billion reduction in operating costs by 2027.

“There is a concerted effort to make sure that we're really working hard to apply that new technology to the opportunity set within the company to drive effectiveness and efficiency,” Woods told Wall Street analysts.

At Chevron, AI tools are being used to quickly analyze data and extract insights from it, according to tech news website VentureBeat. Also, Chevron employs advanced AI systems known as large language models (LLMs) to create engineering standards, specifications and safety alerts. AI is even being put to work in Chevron’s exploration initiatives.

Bill Braun, Chevron’s chief information officer, said at a VentureBeat-sponsored event in 2024 that AI-savvy data scientists, or “digital scholars,” are always embedded within workplace teams “to act as a catalyst for working differently.”

The Fortune AIQ 50 ranking is based on ServiceNow’s Enterprise AI Maturity Index, an annual measurement of how prepared organizations are to adopt and scale AI. To evaluate how Fortune 500 companies are rolling out AI and how much they value AI investments, Fortune teamed up with Enterprise Technology Research. The results went into computing an AIQ score for each company.

At the top of the ranking is Alphabet (owner of Google and YouTube), followed by Visa, JPMorgan Chase, Nvidia and Mastercard. Aside from ExxonMobil, Hewlett Packard Enterprise, and Chevron, two other Texas companies made the list: Arlington-based homebuilder D.R. Horton (No. 29) and Austin-based software company Oracle (No. 37).

“The Fortune AIQ 50 demonstrates how companies across industry sectors are beginning to find real value from the deployment of AI technology,” Jeremy Kahn, Fortune’s AI editor, said in a news release. “Clearly, some sectors, such as tech and finance, are pulling ahead of others, but even in so-called 'old economy' industries like mining and transport, there are a few companies that are pulling away from their peers in the successful use of AI.


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This article originally appeared on InnovationMap.com.

ExxonMobil says it will "slow the pace" of development of its $10 billion plastics manufacturing plant. Photo via Getty Images.

ExxonMobil postpones $10B plastics manufacturing plant

plastics project postponed

Spring-based ExxonMobil is postponing development of a $10 billion plastics manufacturing plant along the Gulf Coast. Construction on the plant, to be located near Port Lavaca, was supposed to begin next year.

“Based on current market conditions, we are going to slow the pace of our development for the Coastal Plain Venture,” ExxonMobil confirmed in an emailed statement. “We’re confident in our growth strategy, and we remain interested in a potential project along the U.S. Gulf Coast and in other regions around the world. We’re maintaining good relationships with community leaders and contractors, so we are ready to reevaluate the project’s status when market conditions improve.”

According to Independent Commodity Intelligence Services, the Coastal Plain project was preliminary, and ExxonMobil had not yet announced its decision about building a plant for polyethylene production. Polyethylene, the world’s most common plastic, is used in a variety of products, such as bags, bottles, food containers, automotive components, medical tubes, IV bags, children’s toys and cutting boards.

The Coastal Plain postponement follows a judge’s ruling in August that invalidated a decision by Calhoun County ISD board members to negotiate tax breaks with ExxonMobil, according to Inside Climate News. The judge made the ruling in a case filed by environmental activist Diane Wilson and her nonprofit group, San Antonio Bay Estuarine Waterkeeper.

Wilson told Inside Climate News that she thought public opposition played a part in ExxonMobil postponing the Coastal Plain project.

“I think if everybody had just rolled over for them, if they got exactly what they wanted (tax breaks) and there wasn’t a big fight, there would be no delay,” Wilson said.

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Houston energy tech company breaks ground on low-cost green hydrogen pilot plant

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Houston’s Lummus Technology and Advanced Ionics have broken ground on their hydrogen pilot plant at Lummus’ R&D facility in Pasadena.

The plant will support Advanced Ionics’ cutting-edge electrolyzer technology, which aims to deliver high-efficiency hydrogen production with reduced energy requirements.

“By demonstrating Advanced Ionics’ technology at our state-of-the-art R&D facility, we are leveraging the expertise of our scientists and R&D team, plus our proven track record of developing breakthrough technologies,” Leon de Bruyn, president and CEO of Lummus, said in a news release. “This will help us accelerate commercialization of the technology and deliver scalable, cost-effective and sustainable green hydrogen solutions to our customers.”

Advanced Ionics is a Milwaukee-based low-cost green hydrogen technology provider. Its electrolyzer converts process and waste heat into green hydrogen for less than a dollar per kilogram, according to the company. The platform's users include industrial hydrogen producers looking to optimize sustainability at an affordable cost.

Lummus, a global energy technology company, will operate the Advanced Ionics electrolyzer and manage the balance of plant systems.

In 2024, Lummus and Advanced Ionics established their partnership to help advance the production of cost-effective and sustainable hydrogen technology. Lummus Venture Capital also invested an undisclosed amount into Advanced Ionics at the time.

“Our collaboration with Lummus demonstrates the power of partnerships in driving the energy transition forward,” Ignacio Bincaz, CEO of Advanced Ionics, added in the news release. “Lummus serves as a launchpad for technologies like ours, enabling us to validate performance and integration under real-world conditions. This milestone proves that green hydrogen can be practical and economically viable, and it marks another key step toward commercial deployment.”

Houston Energy Transition Initiative releases 2025 year in review

The View From HETI

The Houston Energy Transition Initiative (HETI) concludes another impactful year by reaffirming our commitment to positioning Houston as the global leader in the energy transition – delivering more energy with fewer emissions. HETI continues to be focused on advancing key regional priorities, driving economic development and talent recruitment.

It was a year of changes across the energy landscape, yet HETI continued to collaborate, convene, and deliver measurable progress. Below are some of the year’s key highlights:

Sharing Members’ Impact on Decarbonization and Emissions Reductions

HETI released a report detailing members’ low-carbon initiatives and commitments, showcasing industry momentum and long-term pathways to achieving the dual challenge of meeting growing global energy demand while reducing emissions. Major findings include more than $95 billion in low-carbon investments and 20% reduction in Scope 1 emissions since 2017 by HETI-affiliated companies. The report also recommends strategic pathways for continued emissions reductions.

Advancing CCUS at Commercial Scale

HETI publicly supported efforts to accelerate carbon capture, utilization, and storage (CCUS) efforts to commercial scale. Early in the year, HETI and the Houston CCS Alliance commissioned Texas A&M University’s Energy Institute and Mary Kay O’Connor Process Safety Center to research the operational history and safety record of CCUS in the United States. In November, the U.S. Environmental Protection Agency granted Texas authority to permit CCUS—a significant win that increases the region’s competitiveness in the global energy ecosystem.

Leadership in Resilient Power for Houston’s Growth

In June, HETI hosted its first Resilient Power: Fueling Houston’s Growing Economy summit, bringing together more than 100 business and civic leaders to discuss the role of resilient, reliable power in Houston’s economic development. Cross-sector leaders explored the impacts of rising power demand driven by industrial decarbonization and digitalization, and discussed the essential collaboration between the energy and tech sectors to strengthen long-term resilience through an “all of the above” approach. HETI also published a fact sheet on Houston’s resilient power access, affordability, and reliability as a resource for partners.

Showcasing Houston’s Leadership at CERAWeek 2025

HETI participated in CERAWeek 2025, elevating Houston’s energy leadership on the world stage. The HETI House activation in the Innovation Agora attracted more than 1,000 visitors and generated over 80 economic development leads. In addition, HETI partnered with Rice Alliance and TEX-E for the fourth annual Energy Ventures Pitch Competition at CERAWeek, bringing together students, startups and energy leaders to advance innovation and investment.

Scaling Houston’s Innovation Ecosystem

As Houston’s energy innovation ecosystem continues to grow, HETI plays an important role in shaping its future. During its second year, Houston Energy and Climate Startup Week attracted more than 3,900 attendees from local and global startups, industry leaders, and investors—further solidifying Houston’s status as the world’s leading energy innovation hub.

Strengthening Regional Competitiveness

To advance technology commercialization and support the Gulf Coast’s continued energy competitiveness, HETI hosted its second annual Gulf Coast National Labs Workshop. This year’s event convened more than 120 leaders representing six national laboratories, industry partners, academia, and government stakeholders to accelerate collaboration around the region’s greatest energy and chemical challenges.

HETI’s progress this year is significant, but the work ahead is even more critical. As we move into the new year, HETI remains steadfast in its commitment to convening industry leaders, informing policy, supporting innovation, and driving economic growth across the region. This work strengthens Houston’s core energy economy and accelerates the emerging sectors that will ensure Houston continues to lead the world in energy.

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This article originally appeared on the Greater Houston Partnership's Houston Energy Transition Initiative blog. HETI exists to support Houston's future as an energy leader. For more information about the Houston Energy Transition Initiative, EnergyCapitalHTX's presenting sponsor, visit htxenergytransition.org.

Chevron CEO touts biofuels as part of its renewable energy efforts

Betting on biofuels

As Chevron Chairman and CEO Mike Wirth surveys the renewable energy landscape, he sees the most potential in biofuels.

At a recent WSJ CEO Council event, Wirth put a particular emphasis on biofuels—the most established form of renewable energy—among the mix of low-carbon energy sources. According to Biofuels International, Chevron operates nine biorefineries around the world.

Biofuels are made from fats and oils, such as canola oil, soybean oil and used cooking oil.

At Chevron’s renewable diesel plant in Geismar, Louisiana, a recent expansion boosted annual production by 278 percent — from 90 million gallons to 340 million gallons. To drive innovation in the low-carbon-fuels sector, Chevron opened a technology center this summer at its renewable energy campus in Ames, Iowa.

Across the board, Chevron has earmarked $8 billion to advance its low-carbon business by 2028.

In addition to biofuels, Chevron’s low-carbon strategy includes hydrogen, although Wirth said hydrogen “is proving to be very difficult” because “you’re fighting the laws of thermodynamics.”

Nonetheless, Chevron is heavily invested in the hydrogen market:

As for geothermal energy, Wirth said it shows “some real promise.” Chevron’s plans for this segment of the renewable energy industry include a 20-megawatt geothermal pilot project in Northern California, according to the California Community Choice Association. The project is part of an initiative that aims to eventually produce 600 megawatts of geothermal energy.

What about solar and wind power?

“We start with things where we have some reason to believe we can create shareholder value, where we’ve got skills and competency, so we didn’t go into wind or solar because we’re not a turbine manufacturer installing wind and solar,” he said in remarks reported by The Wall Street Journal.

In a September interview with The New York Times, Wirth touched on Chevron’s green energy capabilities.

“We are investing in new technologies, like hydrogen, carbon capture and storage, lithium and renewable fuels,” Wirth said. “They are growing fast but off a very small base. We need to do things that meet demand as it exists and then evolve as demand evolves.”

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