As global energy demand continues to rise, the energy market is evolving and diversifying to meet the needs of consumers. New energy sources and technologies that produce energy with fewer carbon emissions are gaining traction in the global energy mix. The case of carbon capture and storage (CCS) is particularly appealing because it removes carbon produced by traditional energy sources directly from the atmosphere. CCS will be a critical step in the energy transition.
With its world-class energy infrastructure and experienced workforce, Texas is perfectly positioned to attract major investments in CCS. It is already attracting interest from major energy, petrochemical, and manufacturing giants. Houston’s high concentration of industrial facilities, existing pipeline network, and unique geology needed to store carbon (on- and off-shore) make it an ideal hub for CCS development.
By 2035, the growth of CCS in Texas could generate up to $60 billion dollars in private investment. Over the next 15 years in Texas, more than 18,000 jobs could be created to retrofit and construct CCS projects and nearly 10,000 permanent jobs could be created in operational roles. CCS will also create opportunities for Texas workers in established industries in the state, rather than forcing workers to retrain on other technologies like wind turbines or solar arrays.
The immense opportunity created by CCS has already led several of Texas’s largest energy companies, to push forward with technology and capital projects and that could remove up to 100 million metric tons of CO2 per year by 2040, which is more than double the current emissions of New York City. Venture capital and financial institutions of all sizes are helping to catalyze growth, fill financing gaps, and expand this technology that can support the path to net-zero emissions.
To make this opportunity a reality, policymakers in Austin and Washington, DC must provide a clear regulatory roadmap and incentive structure that allows companies to confidently invest in these long-term projects. That road map must include incentives and access to capital for both CCS operators and energy service companies, but current regulatory hurdles, permitting delays, and lack of accessible capital create uncertainty that discourages investments in CCS. To make sound investment decisions, CCS operators will increasingly rely on state and local government to ensure a stable regulatory landscape to ensure these long-term capital project investments are realized.
Congress recently appropriated billions of dollars to support research, drive startup investments and accelerate the development of CCS as part of a federal effort to accelerate the energy transition. These federal loans and grants attract private capital to help scale technologies to commercial production. Companies in Texas are already lining up to take advantage of these financial incentives. The State of Texas should continue to support the carbon capture industry to keep CCS investment dollars in the state.
Support from Governor Abbott and Texas legislators can create a more competitive marketplace that benefits employers, workers, and landowners throughout our state. Texas must act soon, as neighboring states like Louisiana are already taking significant steps to outpace Texas. We can't afford to lose out and need our state legislators to make CCS legislation a top priority in 2025.
The energy transition could bring a lot of green to Texas, both environmentally and financially. CCS is a promising technology that Texans in business and government should unite behind.
Austin Ward is the VP of Business Development at Gulf Coast Business Credit. Gulf Coast Business Credit, a division of Gulf Coast Bank & Trust Co., is a capital provider to energy service companies in Texas and across the USA. Specializing in working capital credits for small and middle market companies, Gulf Coast Business Credit, funds energy service companies that have been turned away from traditional bank financing.