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DOE proposes cutting $1.2 billion in funding for hydrogen hub

funding cuts

A list of proposed DOE funding cancellations shows potential cuts for Houston-area companies. Photo via Getty Images.

The U.S. Department of Energy has proposed cutting $1.2 billion in funding for the HyVelocity Gulf Coast Hydrogen Hub, a clean energy project backed by AES, Air Liquide, Chevron, ExxonMobil, Mitsubishi Power Americas and Ørsted.

The HyVelocity project, which would produce clean hydrogen, appears on a new list of proposed DOE funding cancellations. The list was obtained by Latitude Media.

As of November, HyVelocity had already received $22 million of the potential $1.2 billion in DOE funding.

Other than the six main corporate backers, supporters of HyVelocity include the Center for Houston’s Future, Houston Advanced Research Center, Port Houston, University of Texas at Austin, Shell, the Texas governor’s office, Texas congressional delegation, and the City of Fort Worth.

Kristine Cone, a spokeswoman for GTI Energy, the hub’s administrator, told EnergyCapital that it hadn’t gotten an update from DOE about the hub’s status.

The list also shows the Magnolia Sequestration Hub in Louisiana, being developed by Occidental Petroleum subsidiary 1PointFive, could lose nearly $19.8 million in federal funding and the subsidiary’s South Texas Direct Air Capture (DAC) Hub on the King Ranch in Kleberg County could lose $50 million. In September, 1Point5 announced the $50 million award for its South Texas hub would be the first installment of up to $500 million in federal funding for the project.

Other possible DOE funding losses for Houston-area companies on the list include:

  • A little over $100 million earmarked for Houston-based BP Carbon Solutions to develop carbon storage projects
  • $100 million earmarked for Dow to produce battery-grade solvents for lithium-ion batteries. Dow operates chemical plants in Deer Park and LaPorte
  • $39 million earmarked for Daikin Comfort Technologies North America to produce energy-efficient heat pumps. The HVAC company operates the Daikin Texas Technology Park in Waller
  • Nearly $6 million earmarked for Houston-based Baker Hughes Energy Transition to reduce methane emissions from flares
  • $3 million earmarked for Spring-based Chevron to explore development of a DAC hub in Northern California
  • Nearly $2.9 million earmarked for Houston-based geothermal energy startup Fervo Energy’s geothermal plant in Utah
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SLB and NVIDIA expand partnership to scale AI across energy sector

AI partnership

Houston-based energy technology company SLB has expanded its 18-year tech collaboration with chipmaker NVIDIA to include the development of an “AI factory for energy.”

Through their partnership, SLB and NVIDIA will create AI infrastructure and models built around SLB’s existing digital platforms to help energy companies scale AI for data and operations.

In addition to the development of the “AI factory,” SLB will:

  • Provide modular design services to enhance NVIDIA’s blueprint for building, launching and operating gigawatt-scale AI data centers. In this case, modular design involves manufacturing data center components off-site.
  • Use NVIDIA’s AI infrastructure to improve the processing of large datasets and AI models across SLB’s digital platforms.

Energy companies generate vast amounts of operational data, which can slow down and silo decision-making, SLB says. By combining NVIDIA’s Omniverse libraries and its Nemotron open models with SLB’s digital and AI platforms, the companies aim to more rapidly transform data into actionable insights.

Omniverse libraries are sets of prebuilt 3D elements, such as objects, surfaces and interactive features, that make it easier to construct detailed virtual spaces without having to design everything manually. They’re commonly used for building immersive environments, digital replicas of real-world systems and simulation scenarios.

Nemotron open models are AI models that are freely available to download and modify. Instead of relying on a hosted service, you can run them on your own infrastructure and tailor them to fit specific needs.

Vladimir Troy, vice president of AI infrastructure at NVIDIA, says the energy sector is at the forefront of AI driving a “new industrial revolution.”

“The winners in AI will be companies with the best data, the deepest domain expertise, and the ability to scale,” Demos Pafitis, SLB’s chief technology officer, added. “By collaborating with NVIDIA to advance modular data center construction and harness our domain expertise and digital platforms, we’re enabling the energy industry to deploy AI at scale and transform operational data into smarter decisions.”

Houston poised for Texas-sized data center growth and more energy news

Trending Topics

Editor's note: The top energy transition news of the month looks at the future of data centers in Houston; a big step for Fervo; and what hotter, longer summers mean for Texans. Below are the five most-read EnergyCapital stories published March 16-30, 2026:

1. Houston data center capacity could more than double by 2028, CBRE report says

Houston's data center scene has received its latest bullish forecast. Photo via serverfarmllc.com

The Houston market could more than double its data center capacity by the end of 2028, a new report indicates. The report, published by commercial real estate services provider CBRE, says greater demand for data center capacity in the Houston area is being fueled by energy companies, along with large-scale cloud services and AI-driven tenants. In the second half of 2025, the Houston market had 154 megawatts of data center capacity, which was on par with capacity in the second half of 2024. Another 28.5 megawatts of capacity was under construction during that period. Continue reading.

2. Fervo secures $421M in financing for Cape Station construction

Fervo Energy has closed financing to support the remaining construction costs for the first phase of Cape Station. Photo via fervoenergy.com

Houston geothermal unicorn Fervo Energy has closed $421 million in non-recourse debt financing for the first phase of its flagship Cape Station project in Beaver County, Utah. Fervo believes Cape Station can meet the needs of surging power demand from data centers, domestic manufacturing and an energy market aiming to use clean and reliable power. According to the company, Cape Station will begin delivering its first power to the grid this year and is expected to reach approximately 100 megwatts of operating capacity by early 2027. Fervo added that it plans to scale to 500 megawatts. Continue reading.

3. Energy expert: What record heat and extended summers mean for Texans

Extreme weather in Texas is not only increasing but also becoming more hazardous for communities, infrastructure, and the economy. Photo by Jarosław Kwoczała on Unsplash

Earth’s third-warmest year on record occurred in 2025, reinforcing a decades-long pattern of rising global temperatures. This warming trend is increasingly reflected in regional weather patterns across the United States, particularly in Texas, where hotter summers, prolonged droughts, and heavier rainfall events are becoming more common. A 2024 report from Texas A&M University highlights how these shifts are already reshaping weather conditions across the Lone Star State. The assessment analyzes climate and weather data from 1900 through 2023 and projects likely trends through 2036. Continue reading.

4. TotalEnergies strikes $1B federal deal to exit offshore wind sector

TotalEnergies is canceling its U.S. offshore wind projects. Photo via totalenergies.com

TotalEnergies, a French company whose U.S. headquarters is in Houston, has agreed to redirect nearly $930 million in capital from two offshore wind leases on the East Coast to oil, natural gas and liquefied natural gas (LNG) production. In its agreement with the U.S. Department of the Interior, TotalEnergies has also promised not to develop new offshore wind projects in the U.S. “in light of national security concerns.” Continue reading.

5. 30+ CERAWeek events featuring Houston energy leaders

Heading to CERAWeek? Here's where to find Houston energy leaders on the Agora track. Photo courtesy of CERAWeek

CERAWeek returned to Houston March 23-27, bringing more than 1,000 speakers, executives and energy innovators to Houston.Here are some of the many events that featured Houston leaders on the Agora track. Continue reading.

Oxy CEO Vicki Hollub to retire, Reuters reports

retirement plans

Vicki Hollub, CEO of Houston-based Occidental (Oxy), is set to retire this year, Reuters first reported Thursday.

Hollub has held the top leadership position at Oxy since 2016 and has been with the oil and gas giant for more than 40 years. Before being named CEO, she served as chief operating officer and senior executive vice president at the company. She led strategic acquisitions of Anadarko Petroleum in 2019 and CrownRock in 2024, and was the first woman selected to lead a major U.S. oil and gas company.

Reuters reports that a firm date for her retirement has not been set. Richard Jackson, who currently serves as Oxy's COO, is expected to replace Hollub in the CEO role.

Oxy is leading a number of energy transition projects.

It's subsidiary 1PointFive is developing a $1.3 billion direct air capture (DAC) project in the Midland-Odessa area that is slated to be the largest facility of its kind in the world. Known as STRATOS, it's designed to capture up to 500,000 metric tons of CO2 per year.

The company shared recently that Phase 1 of the project is expected to go online in Q2, with Phase 2 ramping up through the remainder of 2026.

“We are immensely proud of the achievements to date and the exceptional record of safety performance as we advance towards commercial startup,” Hollub said of Stratos last year.

“We believe that carbon capture and DAC, in particular, will be instrumental in shaping the future energy landscape,” she added.

Oxy was one of the first to set ambitious net-zero goals. In a 2020 interview during CERAWeek, Hollub outlined Oxy's future as a “carbon management company.”

“Ultimately, I don’t know how many years from now, Occidental becomes a carbon management company, and our oil and gas would be a support business unit for the management of that carbon. We would be not only using [CO2] in oil reservoirs [but] capturing it for sequestration as well,” Hollub said.

Oxy opened its Oxy Innovation Center in the Ion last year, focused on advancing low-carbon technology. It also operates Oxy Low Carbon Ventures, which focuses DAC, carbon sequestration and low-carbon fuels through businesses like 1PointFive, TerraLithium and others.

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