When people think of Texas, they think big – big landscapes, big ambition and big energy. And when it comes to energy, Texas isn’t just part of the story – we’re leading it.
Conservative Texans for Energy Innovation State Director Matt Welch speaks at an electric vehicle convoy on Jan. 29, 2024 at the Beaumont Chamber of Commerce. Courtney Pedersen/The Enterprise
Texas fully embraces the Trump administration’s America First vision of energy dominance – supporting American energy, American jobs and American innovation. Achieving this dominance involves expanding access to abundant, low-cost, innovative, and reliable energy sources like hydrogen.
Blue hydrogen, which is produced from natural gas, is a critical solution. It is scalable, versatile, and efficient, allowing Texans to meet rising energy demand while also helping to meet our long-term low-carbon goals. Blue hydrogen can help strengthen American energy security, boost our competitiveness on the world stage and accelerate economic growth.
Tax incentives like the 45V Clean Hydrogen Production Tax Credit, which supports hydrogen production, are foundational to this effort. These credits are already driving new manufacturing and hydrogen production projects across the country and across the Texas coast from Corpus Christi to Beaumont.
However, these facilities and others alike face an uncertain future as the House recently passed its massive spending bill, which accelerates the phase-out of certain energy tax credits. Specifically, 45V will expire at the end of this year, meaning it won’t be applicable for projects starting in 2026.
Without 45V, we risk losing 3.4 million hydrogen production jobs by 2050 and over $140 billion in revenue for American businesses by 2030. The impacts are even more significant in Texas, with blue hydrogen production potentially creating around 9,050 Texas jobs annually during the construction phase (2025-2035) and nearly 19,000 permanent Texas jobs once operational.
This all comes as U.S. power demand is growing at a staggering pace. To meet this moment, we must capitalize on America’s abundant natural gas resources and lead the hydrogen market. According to a new report by Citizens for Responsible Energy Solutions (CRES) Forum, the U.S. produces about 14% of the world’s hydrogen and based on production capacity can produce 9.8 million metric tons of blue hydrogen by 2035, enough to power over 18 million American homes.
Texas can truly lead in this emerging space. We’re already a leader in hydrogen production, with natural gas accounting for 95% of the hydrogen produced in the U.S., one-third of which comes from Texas. Scaling this industry will drive job creation and economic growth for generations to come.
However, with the phase out of 45V, we’re one step closer to Texas and the U.S. losing its global energy competitiveness to countries like China who are aggressively investing in this market. China is currently the world’s leading producer of hydrogen and is continually expanding production, while the U.S. has yet to leverage its capacity to scale production. We simply cannot afford to fall behind.
Texas has what it takes to be a true powerhouse in this space – we need to preserve policies that ensure Texas can lead the country into a more promising energy future. The Senate must ensure we maintain the 45V tax credit. Without it, Texas will lose out on thousands of jobs.
Our message to Senator Cornyn and Senator Cruz is clear: phasing out 45V will stifle American innovation and growth, jeopardize American jobs and cede ground to international competitors, making it nearly impossible to compete with foreign powers like China.
Matt Welch is state director for Conservative Texans for Energy Innovation, a group promoting energy innovation and clean energy policies grounded in the conservative principle of common sense and market-based solutions.
