Houston has what it takes to be a leading energy tech hub, says expert

GUEST COLUMN

Houston is primed to become an energy tech hub amid ongoing energy transition.

As the energy capital of the world, Houston has been a long-time leader in the energy industry, particularly oil and gas. With cutting-edge research and technological breakthroughs, unique talent of energy veterans and engineering know-how, the city is swiftly developing into a booming energy technology hub.

Houston’s R&D, talent pool, energy infrastructure, and favorable business environment is fostering the growth of technology-driven energy initiatives. These factors differentiate Houston's energy tech ecosystem from other tech hubs in the U.S., in similar ways to how Silicon Valley has been known for technology and software and Boston and New York for biotech and fintech ecosystems, respectively.

Primarily, Houston's proximity to major energy players has played a crucial role in its evolution as an energy technology hub. Around 34 percent of all publicly traded oil and gas companies in the U.S. are headquartered in the city. Even the energy companies that are headquartered outside of Houston (e.g., Exelon, Duke Energy, and NextEra Energy) have established their energy transition headquarters and plants/infrastructure here. This proximity enables energy technology startups easy access to market, expertise, resources, and funding, fostering a vibrant ecosystem that supports their growth.

Moreover, with an expanding network of academic and commercial R&D activity, the city has become a rising hub of technological development. It currently houses more than 21 business research centers focusing on various aspects related to energy transition through design, prototype, and applied intelligence studios.

For instance, the Greater Houston Partnership, a key organization in promoting Houston’s economic growth, has been actively involved in positioning the city as a leader in the global energy transition space. Some of the notable green energy startups leading Houston’s energy transition are Sunnova, Solugen, Fervo Energy, Syzygy Plasmonics, Ionada, and Energy Transition Ventures.

The emergence of startup development organizations throughout the city, including workplaces, incubators, and accelerators, in recent years has fostered collaboration among founders, investors, and talent, thereby accelerating the rate of business formation and growth. Accelerators and incubators such as Halliburton Labs, Greentown Labs, The Ion District, and Rice Alliance Clean Energy Accelerator are key supporters of innovation and entrepreneurship in Houston’s energy technology landscape.

In addition, government funding is catalyzing Houston’s growth in energy tech. Most prominently, the 2022 Inflation Reduction Act (IRA) is likely to stimulate greater investment in solar and wind energy, charging infrastructure, and electric vehicles in Houston. It will support the city’s R&D institutions and technology developers in pioneering energy transition for carbon capture, utilization and storage (CCS/CCUS), hydrogen, and renewable fuels, resulting in a 13-fold increase in capital expenditure for infrastructure between 2024 and 2035.

The Bipartisan Infrastructure Law and Advanced Research Projects Agency-Energy (ARPA-E) also focus on promoting and funding research and development of advanced energy technologies, many of which are coming out of Houston.

Further, Houston has a strong talent pool with a workforce of three million individuals and the fourth largest concentration of engineers in the US. In 2022, the growth rate of tech employment in the region was 3.5 percent while the national growth rate was 3.2 percent.

The energy industry, research institutions, and government are coming together in Houston to propel it to become a leader in energy technology. However, the city still has a ways to go: Houston needs to build more in non-traditional energy sectors (e.g. wind, solar, etc.), attract more entrepreneurs to start companies here, and get more investors to invest here. Having successful energy tech exits and reinvestment in new startups here would help.

Houston has tremendous potential to lead energy technology, and with the rapidly growing focus of research, businesses, and government policies on energy transition. The confluence of energy tech players coming together in Houston is driving its evolution as an energy tech hub, making it an exciting place for new technologies and businesses to develop and grow, and reinvest in Houston.

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Michael Torosian is a partner in the corporate practice in the San Francisco office of Baker Botts. He is outside general counsel to emerging companies and their investors and advisors at all stages.

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Only time will tell, but this expert believes the Inflation Reduction Act of 2022 will be a boon to energy tech startups in Texas. Photo via Getty Images

Expert: How recent inflation legislation could affect Texas energy startups, investors

guest column

The recently passed Inflation Reduction Act of 2022 includes $369 billion in investment in climate and energy policies, the largest investment in United States history to address climate change. The IRA could be a boon to Texas startups involved in clean energy, clean manufacturing and clean innovation.

Government policy and funding are critical to supporting the research and development for new technologies, which solve complex challenges and require significant upfront and long-term commitments of investment. Early government investment gives private investors more incentive to invest in the later commercialization and scaling of these businesses, and has a multiplier effect in accelerating the development, commercialization, and deployment of new technologies in the time needed in the market to capitalize on energy business opportunities and achieve climate goals.

The IRA’s biggest impact on climate tech businesses is through tax credits and direct investment. The IRA’s expanded tax credits will make it easier to fund and build projects, help reduce cost of construction, and help make renewable energy projects more competitive, encourage more funding and building of new projects, and bring new jobs and economic development. The IRA’s direct investments allow for companies developing new technologies to obtain grants and loans that help them develop their solutions while not diluting their investors, helping them build more value in their businesses and making them more attractive for later investment.

Texas is well positioned to be an energy transition and clean energy leader and beneficiary of the IRA. The state is home to major energy companies, and their technical expertise, know-how and experience in energy, and energy technology is unparalleled. There is huge momentum in innovation in energy transition and energy tech, and there is great research coming out of university and corporate R&D programs. For example, Texas is home to more than 20 energy-focused research and development centers and dozens of energy tech companies. And Texas is already the largest producer of wind power in the U.S.

Texas startups across industries were already attracting massive investment before the IRA became law. According to Pitchbook and the National Venture Capital Association, Texas startups overall raised a record-high $10.55 billion in venture capital in 2021, an increase of 123 percent from 2020’s $4.73 billion.

Early-stage investment in climate tech hit a record $53.7 billion in 2021. While the totals this year aren’t likely to reach 2021 levels, climate tech investors have said they aren’t seeing the size of pullbacks and slowdowns in other sectors. Despite the VC slowdown this year, clean tech and climate tech have remained attractive investments. This includes Texas. For example, the Rice Alliance Clean Energy Accelerator reported in August that 17 of its early- to mid-stage startups have already raised more than $54.5 million this year. Also in August, geothermal startup Fervo Energy, based in Houston, raised $138 million in new VC funding. Earlier in February, Houston’s Zeta Energy, which has developed a battery for the electric vehicle and energy storage markets, closed a $23 million financing round. We expect continued funding in this space.

Large corporates in Texas are building external innovation programs such as venture arms and accelerators. For instance, Houston’s Halliburton Company developed Halliburton Labs, an accelerator that has backed a number of startups in the carbon capture, clean hydrogen, and solar energy tech developers. Big energy companies are also joining Texas-based accelerator hubs such as The Ion in Houston. The Ion’s founding partners include Aramco Americas, Chevron Technology Ventures, and ExxonMobil.

It will require long term efforts to achieve results in climate tech and clean energy projects, but as the benefits of the IRA materialize, more startups in Texas will have the ability to obtain more long-term financial support and resources from all of the sources – government, universities, and research organizations, venture investors and corporations — that are required to develop solutions to the energy and climate challenges and capitalize on the business opportunities of today and tomorrow. Startups are creating transformative innovations that are key to the United States being a leader in clean energy and fighting climate change. And there’s no better place to do that than in Texas.

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Michael Torosian is a partner in the corporate practice in the San Francisco office of Baker Botts. He is outside general counsel to emerging companies and their investors and advisors at all stages.

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Houston hospitals win $50M grant for ibogaine addiction treatment research

ibogaine funding

The Texas Health and Human Services Commission has awarded $50 million to UTHealth Houston in collaboration with The University of Texas Medical Branch at Galveston (UTMB Health) to co-lead a multicenter research trial to evaluate the effect of ibogaine, a powerful psychoactive compound, on patients suffering from addiction, traumatic brain injury and other behavioral health conditions.

The funding will establish a two-year initiative—known as Ibogaine Medicine for PTSD, Addiction, and Cognitive Trauma (IMPACT)—and a consortium of Texas health institutions focused on clinical trials and working toward potential FDA-approved treatments.

The consoritum will also include Texas Tech University, Texas Tech University Health Sciences Center El Paso, The University of Texas at Austin, The University of Texas Health Science Center at San Antonio, The University of Texas at Tyler, The University of Texas Rio Grande Valley, Texas A&M University, The University of North Texas Health Science Center, Baylor College of Medicine and JPS Health Network in Dallas.

Ibogaine is a plant-based, psychoactive substance derived from the iboga shrub. Research suggests that the substance could be used for potential treatment for patients with traumatic brain injuries, which is a leading cause of post-traumatic stress disorders. Ibogaine has also shown potential as a treatment for addiction and other neurological conditions.

UTHealth and partners will focus on ways that ibogaine can treat addiction and associated conditions. Meanwhile, UT Austin and Baylor College of Medicine will concentrate on using it to treat traumatic brain injury, especially in veterans, according to a news release from the institutions.

The consortium will also support drug developers and teaching hospitals to conduct FDA-approved clinical trials. The Texas Health and Human Services Commission will oversee the grant program.

“This landmark clinical trial reflects our unwavering commitment to advancing research that improves lives and delivers the highest standards of care,” Dr. Melina Kibbe, UTHealth Houston president and the Alkek-Williams Distinguished Chair, said in the news release. “By joining forces with outstanding partners across our state, we are building on Texas’ tradition of innovation to ensure patients struggling with addiction and behavioral health conditions have access to the best possible outcomes. Together, we are shaping discoveries that will serve Texans and set a model for the nation.”

The consortium was authorized by the passage of Senate Bill 2308. The bill provides $50 million in state-matching funds for an ibogaine clinical trial managed by a public university in partnership with a drug company and a hospital.

“This is the first major step towards the legislature’s goal of obtaining FDA approval through clinical trials of ibogaine — a potential breakthrough medication that has brought thousands of America’s war-fighters back from the darkest parts of depression, anxiety, PTSD, and chronic addiction,” Texas Rep. Cody Harris added in the release. “I am excited to walk alongside UTHealth Houston and UTMB as these stellar institutions lead the nation in a first-of-its-kind clinical trial in the U.S.”

Recently, the University of Houston also received a $2.6 million gift from the estate of Dr. William A. Gibson to support and expand its opioid addiction research, which includes the development of a fentanyl vaccine that could block the drug's ability to enter the brain. Read more here.

Tesla no longer world's biggest EV maker as sales fall for second year

Tesla Talk

Tesla lost its crown as the world’s bestselling electric vehicle maker as a customer revolt over Elon Musk’s right-wing politics, expiring U.S. tax breaks for buyers and stiff overseas competition pushed sales down for a second year in a row.

Tesla said that it delivered 1.64 million vehicles in 2025, down 9% from a year earlier.

Chinese rival BYD, which sold 2.26 million vehicles last year, is now the biggest EV maker.

It's a stunning reversal for a car company whose rise once seemed unstoppable as it overtook traditional automakers with far more resources and helped make Musk the world's richest man. The sales drop came despite President Donald Trump's marketing effort early last year when he called a press conference to praise Musk as a “patriot” in front of Teslas lined up on the White House driveway, then announced he would be buying one, bucking presidential precedent to not endorse private company products.

For the fourth quarter, Tesla sales totaled 418,227, falling short of even the much reduced 440,000 target that analysts recently polled by FactSet had expected. Sales were hit hard by the expiration of a $7,500 tax credit for electric vehicle purchases that was phased out by the Trump administration at the end of September.

Tesla stock fell 2.6% to $438.07 on Friday.

Even with multiple issues buffeting the company, investors are betting that Tesla CEO Musk can deliver on his ambitions to make Tesla a leader in robotaxi services and get consumers to embrace humanoid robots that can perform basic tasks in homes and offices. Reflecting that optimism, the stock finished 2025 with a gain of approximately 11%.

The latest quarter was the first with sales of stripped-down versions of the Model Y and Model 3 that Musk unveiled in early October as part of an effort to revive sales. The new Model Y costs just under $40,000 while customers can buy the cheaper Model 3 for under $37,000. Those versions are expected to help Tesla compete with Chinese models in Europe and Asia.

For fourth-quarter earnings coming out in late January, analysts are expecting the company to post a 3% drop in sales and a nearly 40% drop in earnings per share, according to FactSet. Analysts expect the downward trend in sales and profits to eventually reverse itself as 2026 rolls along.

Musk said earlier last year that a “major rebound” in sales was underway, but investors were unruffled when that didn't pan out, choosing instead to focus on Musk's pivot to different parts of business. He has has been saying the future of the company lies with its driverless robotaxis service, its energy storage business and building robots for the home and factory — and much less with car sales.

Tesla started rolling out its robotaxi service in Austin in June, first with safety monitors in the cars to take over in case of trouble, then testing without them. The company hopes to roll out the service in several cities this year.

To do that successfully, it needs to take on rival Waymo, which has been operating autonomous taxis for years and has far more customers. It also will also have to contend with regulatory challenges. The company is under several federal safety investigations and other probes. In California, Tesla is at risk of temporarily losing its license to sell cars in the state after a judge there ruled it had misled customers about their safety.

“Regulatory is going to be a big issue,” said Wedbush Securities analyst Dan Ives, a well-known bull on the stock. “We're dealing with people's lives.”

Still, Ives said he expects Tesla's autonomous offerings will soon overcome any setbacks.

Musk has said he hopes software updates to his cars will enable hundreds of thousands of Tesla vehicles to operate autonomously with zero human intervention by the end of this year. The company is also planning to begin production of its AI-powered Cybercab with no steering wheel or pedals in 2026.

To keep Musk focused on the company, Tesla’s directors awarded Musk a potentially enormous new pay package that shareholders backed at the annual meeting in November.

Musk scored another huge windfall two weeks ago when the Delaware Supreme Court reversed a decision that deprived him of a $55 billion pay package that Tesla doled out in 2018.

Musk could become the world's first trillionaire later this year when he sells shares of his rocket company SpaceX to the public for the first time in what analysts expect would be a blockbuster initial public offering.

8+ can't-miss Houston business and innovation events in January

where to be

Editor's note: Kick off 2026 by hearing insightful talks and making meaningful connections in Houston's innovation scene. From networking workshops to presentations from major industry leaders, here's what not to miss and how to register. Please note: this article may be updated to include additional event listings.

Jan. 13 – Financing the Future

Hear from James Blake, head of capital markets at Fervo Energy, in this informative talk. Blake will cover the current investment landscape for geothermal power, how geothermal projects are structured and the role of policy incentives and innovative financing models in moving the industry forward. A small reception follows.

This event is Tuesday, Jan. 13, from 5:30-7:30 p.m. at the Ion. Register here.

Jan. 13 – Your Path to the Boardroom

Visit Sesh Coworking to hear from Keith Dorsey, an executive advisor and author of The Boardroom Journey, as he shares insights and lessons from hundreds of corporate board members and presents an actionable roadmap for women at every stage of their careers. Dorsey will speak on what "optimal diversity” means in the boardroom, how purpose-driven leaders sustain resilience under relentless pressure and why inclusive leadership is non-negotiable for growth and innovation.

This event is Tuesday, Jan. 13, from 6-8 p.m. at Sesh Coworking. Register here.

Jan. 14 — A Conversation with Dr. Wayne J. Riley on Leading Through Healthcare Transformation

Rice Business Partners will host Dr. Wayne J. Riley, president of SUNY Downstate Health Sciences University, for a moderated discussion with Dean Peter Rodriguez. Riley will share insights on leading complex healthcare organizations in an era of unprecedented industry challenges and reflect on his time at the Jones Graduate School of Business.

This event is Wednesday, Jan. 14, from 6:30-8:30 p.m. at McNair Hall on Rice University's campus. Register here.

Jan. 14 — VDW: Igniting Connections for Startup Success

Entrepreneurial communications instructor Diana Massaro will lead Lilie's latest Venture Development Workshop, focused on soft skills like clear communication, active listening and compelling introductions. Attendees will gain a personalized networking game plan and communication tools to turn casual encounters into meaningful relationships to support their ventures or careers.

This event is Wednesday, Jan. 14, from 6-7:30 p.m. at the Liu Idea Lab for Innovation and Entrepreneurship on Rice University's campus. Register here.

Jan. 21 — Upstream: Digital Tech Meetup

This month's Upstream: Digital Tech Meetup will explore how AI and real-time monitoring are being applied in safety-critical offshore environments, what’s working today, where the biggest gaps remain going into 2026 and how operators and service companies are approaching adoption. Expect to hear from leaders at NOV, Incom Solutions, Timbergrove and others.

This event is Wednesday, Jan. 21, from 8:30-10:30 a.m. at the Ion. Find more information here.

Jan. 22 — HEAD AND HEART: Leading Technology with Humanity While Everything Changes

Hear from Chris Hyams, former CEO of Indeed, at the latest installment of Rice's Master of Engineering Management & Leadership Seminar Series. Hyams will present on the intersection of technology, humanity and change—and how AI is reshaping all three.

This event is Thursday, Jan. 22, at 6 p.m. at Duncan Hall on Rice University's campus. Find more information here.

Jan. 22 – NASA Tech Talk

This month's NASA Tech Talks will feature a special delegation from the UK Science and Technology Network. Expect to hear from a panel of UK space experts, followed by a fireside chat featuring David Alexander, head of the Rice Space Institute, and Meganne Christian, ESA reserve astronaut and senior exploration manager.

This event is Thursday, Jan. 22, from 6-7 p.m. at the Ion. Find more information here.

Jan. 29 – Ignition Hub Startup Career Fair

Lilie will host the Ignition Hub Startup Career Fair this month in partnership with Rice University’s Center for Career Development and Career Development Office. The fair will bring together some of the most innovative, high-growth companies to offer Rice students exciting opportunities. Startups can apply to be considered for the fair. The event is open to Rice University undergraduate, graduate, MBA, and PhD students.

This event is Thursday, Jan. 29, at Grand Hall on Rice University's campus. Find more information here.

Jan. 29 – Health Policy Symposium: Value-Based Care & the Health Care Workforce

The Humana Integrated Health Systems Science Institute at the University of Houston will host its latest Health Policy Symposium this month, focused on the evolving landscape of value-based care and the importance of preparing and strengthening the health care workforce. Hear keynote addresses from leaders at Humana, UH, the American Medical Association and Houston Health Department.

This event is Thursday, Jan. 29, from 11:30 a.m.-1:30 p.m. at the Tilman J. Fertitta Family College of Medicine on Rice University's campus. Find more information here.

Jan. 30 — GHP Annual Meeting

The Greater Houston Partnership's premier event will highlight the region’s progress, honor visionary leadership and set the tone for the year ahead. Hear reflections from outgoing board chair, Gretchen Watkins (former -president of Shell USA); welcome incoming board chair, Armando Perez (EVP of H-E-B Houston); and more

This event is Friday, Jan. 30, from 11:30 a.m.-1:30 p.m. at Hilton Americas. Find more information here.

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