A new study from the University of Texas at Austin shows that new hydrogen production facilities could account for 2 percent to nearly 7 percent of the state's water demand by 2050. Photo via Getty Images.

Just as the data center industry thrives on electricity, the hydrogen industry thrives on water.

A new study from researchers at the University of Texas at Austin found that by 2050, new hydrogen production facilities could account for 2 percent to nearly 7 percent of water demand in the state. The impact could be especially dramatic along the Gulf Coast, where most of the state’s hydrogen production facilities are already built or are being planned.

The research was published in the journal Sustainability.

The study reported that "most existing and proposed hydrogen production infrastructures are within projected water-strained cities and counties, such as Houston in Harris County and Corpus Christi in Nueces County."

Compared with municipal water supplies or irrigation systems, the hydrogen industry’s demand for water is comparatively small, the study’s lead author, Ning Lin, an energy economist at UT’s Bureau of Economic Geology, said in a news release. But hydrogen-fueled demand could strain communities that already are grappling with current and future water shortages.

“Where you put a project can make a huge difference locally,” Lin says. “With multiple hydrogen facilities planned in water-stressed Gulf Coast counties, this study highlights the urgent need for integrated water and energy planning and provides a solid foundation to help policymakers, industry, and communities make informed decisions about hydrogen and water management.”

To forecast water demand, Lin and her colleagues crunched data from a 2024 National Petroleum Council study that estimated the regional hydrogen demand from 2030 to 2050 based on two energy policy scenarios.

As part of the study, researchers reviewed water use and water quality for various hydrogen production methods that affect whether water remaining from production can be recycled.

“In order to plan for water needs, somebody has to figure out what those future demands might look like, and this paper puts some numbers to (it) that, I think, will be very helpful,” Robert Mace, executive director of the Meadows Center for Water and the Environment at Texas State University, who was not part of the study, added in the release.

Scott Nyquist debates both sides of the hydrogen argument in this week’s ECHTX Voices of Energy guest column. Photo courtesy of Aramco.

Will 2023 be hydrogen’s year?

GUEST COLUMN

Yes and no.

Yes, because there is real money, and action, behind it.

Globally, there are 600 projects on the books to build electrolyzers, which separate the oxygen and hydrogen in water, and are critical to creating low-emissions “green hydrogen.” That investment could drive down the cost of low-emissions hydrogen, making it cost competitive with conventional fuels—a major obstacle to its development so far.

In addition, oil companies are interested, too. The industry already uses hydrogen for refining; many see hydrogen as supplemental to their existing operations and perhaps, eventually, supplanting them. In the meantime, it helps them to decarbonize their refining and petrochemical operations, which most of the majors have committed to doing.

Indeed, hydrocarbon-based companies and economies could have a big opportunity in “blue hydrogen,” which uses fossil fuels for production, but then captures and stores emissions. (“Green hydrogen” uses renewables; because it is expensive to produce, it is more distant than blue. “Gray hydrogen” uses fossil fuels, without carbon capture; this accounts for most current production and use.) Oil and gas companies have a head start on related infrastructure, such as pipelines and carbon capture, and also see new business opportunities, such as low-carbon ammonia.

Houston, for example, which likes to call itself the "energy capital of the world,” is going big on hydrogen. The region is well suited to this. It has an extensive pipeline infrastructure, an excellent port system, a pro-business culture, and experience. The Greater Houston Partnership and McKinsey—both of whom I am associated with—estimate that demand for hydrogen will grow 6 to 8 percent a year from 2030 to 2050. No wonder Houston wants a piece of that action.

There are promising, near-term applications for hydrogen, such as ammonia, cement, and steel production, shipping, long-term energy storage, long-haul trucking, and aviation. These bits and pieces add up: steel alone accounts for about 8 percent of global carbon-dioxide emissions. Late last year, Airbus announced it is developing a hydrogen-powered fuel cell engine as part of its effort to build zero-emission aircraft. And Cummins, a US-based engine company, is investing serious money in hydrogen for trains and commercial and industrial vehicles, where batteries are less effective; it already has more than 500 electrolyzers at work.

Then there is recent US legislation. The Infrastructure, Investment and Jobs Act (IIJA) of 2021 allocated $9.5 billion funding for hydrogen. Much more important, though, was last year’s Inflation Reduction Act, which contains generous tax credits to promote hydrogen production. The idea is to narrow the price gap between clean hydrogen and other, more emissions-intensive technologies; in effect, the law seeks to fundamentally change the economics of hydrogen and could be a true game-changer.

This is not without controversy: some Europeans think this money constitutes subsidies that are not allowed under trade rules. For its part, Europe has the hydrogen bug, too. Its REPowerEU plan is based on the idea of “hydrogen-ready infrastructure,” so that natural gas projects can be converted to hydrogen when the technology and economics make sense.

So there is a lot of momentum behind hydrogen, bolstered by the ambitious goals agreed to at the most recent climate conference in Egypt. McKinsey estimates that hydrogen demand could reach 660 million tons by 2050, which could abate 20 percent of total emissions. Total planned production for lower-emission green and blue hydrogen through 2030 has reached more than 26 million metric tons annually—quadruple that of 2020.

No, because major issues have not been figured out.

The plans in the works, while ambitious, are murky. A European official, asked about the REPowerEU strategy, admitted that “it’s not clear how it will work.” The same can be said of the United States. The hydrogen value chain, particularly for green hydrogen, requires a lot of electricity, and that calls for flexible grids and much greater capacity. For the United States to reach its climate goals, the grid needs to grow an estimated 60 percent by 2030.That is not easy: just try siting new transmission lines and watch the NIMBY monsters emerge.

Permitting can be a nightmare, often requiring separate approvals from local, state, interstate, and federal authorities, and from different authorities for each (air, land, water, endangered species, and on and on); money does not solve this. Even a state like Texas, which isn’t allergic to fossil fuels and has a relatively light regulatory touch, can get stuck in permitting limbo. Bill Gates recently noted that “over 1,000 gigawatts worth of potential clean energy projects [in the United States] are waiting for approval—about the current size of the entire U.S. grid—and the primary reason for the bottleneck is the lack of transmission.”

Then there is the matter of moving hydrogen from production site to market. Pipeline networks are not yet in place and shifting natural gas pipelines to hydrogen is a long way off. Liquifying hydrogen and transporting is expensive. In general, because hydrogen is still a new industry, it faces “chicken or egg” problems that are typical of the difficulties big innovations face, such as connecting hydrogen buyers to hydrogen producers and connecting carbon emitters to places to store the carbon dioxide. These challenges add to the complexity of getting projects financed.

Finally, there is money. McKinsey estimates that getting on track to that 600 million tons would require investment of $950 billion by 2030; so far, $240 billion has been announced.

Where I stand: in the middle.

I believe in hydrogen’s potential. More than 3 years ago, I wrote about hydrogen, arguing that while there had been real progress, “many things need to happen, in terms of policy, finance, and infrastructure, before it becomes even a medium-sized deal.” Now, some of those things are happening.

So, I guess I land somewhere in the middle. I think 2023 will see real progress, in decarbonizing refining and petrochemicals operations and producing ammonia, specifically. I am also optimistic that a number of low-emissions electrolysis projects will move ahead. And while such advances might seem less than transformative, they are critical: hydrogen, whether blue or green, needs to prove itself, and 2023 could be the year it does.

Because I take hydrogen’s potential seriously, though, I also see the barriers. If it is to become the big deal its supporters believe it could be, that requires big money, strong engineering and construction project management, sustained commitment, and community support. It’s easy to proclaim the wonders of the hydrogen economy; it’s much more difficult to devise sensible business models, standardized contracts, consistent incentives, and a regulatory system that doesn’t drive producers crazy. But all this matters—a lot.

My conclusion: there will be significant steps forward in 2023—but take-off is still years away.

------

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.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Here are 10+ must-attend Houston energy transition events for Q2 2025

On the Agenda

Editor's note: Spring is here, and this quarter is packed with must-attend events for those in the energy transition sector. Houston plays host to myriad summits, conferences, and expos that you won't want to miss. Mark your calendars and begin registering today. Please note: this article may be updated to include additional events.

March 31-April 2 — World Hydrogen North America 2025

Seize the opportunity to connect with industry leaders from across the hydrogen value chain, fostering long-term business partnerships and exploring potential collaborations. Engage with prominent off-takers, both nationally and internationally, and gain first-hand insights into the latest projects shaping the future of hydrogen in the USA and Canada.

This event begins March 31 at the Marriott Marquis. Click here to register.

April 1-2 — 8th Annual LNG Summit USA

The LNG Summit USA brings together leaders in the LNG sector, who in turn bring solutions to glaring industry challenges. The event addresses key challenges and opportunities within the LNG industry and the broader energy landscape. The conference will also provide insights into alternative energy options that could potentially replace or complement LNG.

This event begins April 1. Click here to register.

April 17 — 2025 UH Energy Symposium Series on Plastics Circularity

Celebrating its 12th year, the UH Energy Symposium Series tackles critical issues impacting the energy sector. This year’s focus on plastics circularity will bring together industry leaders, researchers, and visionaries to explore the intersection of plastics, sustainability, and energy.

This event begins at 8 am on April 17 at UH Student Center South. Click here to register.

April 28-30 — PPDM Energy Data Convention Houston 2025

This flagship conference is dedicated to exploring the latest advancements and trends in energy data, offering opportunities for networking, knowledge exchange, and collaboration. Gain insights into cutting-edge data management practices and how they can enhance operational efficiency, support strategic decision-making, and contribute to achieving long-term objectives. Highlights include keynote presentations from renowned experts, interactive panel discussions, hands-on workshops, and an exhibitor showcase.

This event begins April 28 at Norris Conference Center. Click here to register.

May 12-15 — Enverus Evolve Conference

Staying ahead of the curve in the energy sector is critical. This conference is designed to equip energy leaders with foresight in the energy market, providing cutting-edge technological know-how, sessions and networking opportunities industry leaders, and offering practical guidance on how to apply technology to solve big problems.

This event begins May 12 at Hilton Americas Houston. Click here to register.

May 27-28 — 6th American LNG Forum

Join LNG industry professionals, innovators, and policymakers to discover groundbreaking technologies that are driving the future of liquified natural gas. Topics will include market dynamics and decarbonization strategies, offering attendees the chance to connect, learn, and become part of the LNG revolution.

This event begins May 27 at the Westin Galleria Houston. Click here to register.

May 28-30 — CHARGE North America

This intimate, immersive experience is tailored to forward-thinking energy professionals. The conference includes hands-on interactive workshops led by top strategists; real-world case studies; and insights from leading speakers on resilient branding, consumer expectations, and climate action. Attendees will engage in panel discussions on sustainability and energy diversification and enjoy exclusive networking opportunities with global executives and innovators.

This event begins May 28 at The Ion. Click here to register.

May 29-30 — 5th Annual American Hydrogen Forum

Connect with hydrogen industry leaders, innovators, and policymakers at the American Hydrogen Forum. Discover groundbreaking technologies and strategies focusing on hydrogen fuel cell technology, hydrogen energy, and low-carbon hydrogen solutions.

This event begins May 29 at the Westin Galleria Houston. Click here to register.

June 4-5 — 2025 AWS Energy Symposium

The fourth annual AWS Energy Symposium is the premier AWS event for the energy industry. Hear from leading energy and utility customers, partners, and startups about how they're using AWS to scale innovation and transform their organizations. The event is invitation only and is geared toward senior leaders and director-level executives from across the energy value chain. Click here to submit a registration request.

June 11-12 — Energy Projects Conference & Expo

The Energy Projects Conference & Expo (EPC Show) is the largest event in North America for professionals working at the heart of major energy projects. The show will bring together five leading conferences under one roof for the first time, uniting 3,000-plus engineering, construction, commissioning, supply chain, operations, and maintenance professionals. Conference subjects span LNG exporting, hydrogen and ammonia, midstream, petrochem and refining, and sustainable aviation fuels.

This event begins June 11 at the George R Brown Convention Center. Click here to register.

June 25-26 — Carbon Capture Technology Expo

Tackling climate change is one of the biggest global challenges that requires immediate action, and many industrial sectors are now looking to new technology to help meet net-zero emission targets. The Carbon Capture Technology Expo is North America's leading event for carbon capture, utilization, and storage. The expo offers opportunities to network with industry frontrunners and best-in-class solution providers.

This event begins June 25 at NRG Center. Click here to register. It is co-located with the Hydrogen Technology Conference & Expo North America. Expo passes are free.


8 Houston energy companies land on Time's top greentech list for 2025

top honor

The accolades keep rolling in for Houston-based Fervo Energy, a producer of geothermal power.

Fervo lands at No. 6 on Time magazine and Statista’s new list of America’s Top GreenTech Companies of 2025. The ranking recognizes sustainability-focused companies based on factors such as impact, financial strength, and innovation.

Time notes that Fervo broke ground in 2023 in Utah on what the company claims will be the world’s largest geothermal plant. The plant is scheduled to start supplying carbon-free electricity to the grid next year and to reach its 400-megawatt capacity in three years.

“Technologies like this only make a difference if we deploy them at large-scale in a way that can reduce carbon emissions and increase the reliability of the grid,” Fervo CEO Tim Latimer told Time in 2023.

The startup was named North American Company of the Year by research and consulting firm Cleantech Group for 2025. Fervo topped the Global Cleantech 100, Cleantech Group’s annual list of the world’s most innovative and promising cleantech companies.

Last year, Fervo also made Time’s list of the 200 Best Inventions of 2024. Fervo was recognized in the green energy category for its FervoFlex geothermal power system.

Founded in 2017, Fervo is now a unicorn, meaning its valuation as a private company exceeds $1 billion. The startup’s valuation is estimated at $1.4 billion. According to PitchBook data, the company raised $634 million in the fourth quarter of 2024.

In all, eight Houston-area companies appear among the top 250 greentech companies ranked by Time and Statista. Other than Fervo, they are:

  • No. 43 Lancium Technologies, an energy storage and distribution company
  • No. 50 Solugen, a producer of sustainable chemicals.
  • No. 56 Quaise Energy, which specializes in terawatt-scale geothermal power.
  • No. 129 Plus Power, a developer, owner and operator of battery storage projects.
  • No. 218 Dream Harvest, which promotes sustainable vertical farming.
  • No. 225 Cemvita, which uses synthetic biology to convert carbon emissions into bio-based chemicals.
  • No. 226 Syzygy Plasmonics, which decarbonizes chemical production.
Vermont-based BETA Technologies claimed the No. 1 spot. The company manufactures electric aircraft.