Berkshire Hathaway Green Hydrogen Strategy, $9.7 B Oxy Chem Deal, 1 Terra Lithium JV, and $45 B in Renewables (2025)

Hydrogen Market Risk, Berkshire Hathaway Avoids Direct Production With $45 B Asset Play

In 2025, Berkshire Hathaway deliberately abstained from direct investment in green hydrogen production, a market segment experiencing significant volatility and project failures. Instead, its energy subsidiary, Berkshire Hathaway Energy (BHE), executed a foundational asset strategy, focusing on controlling the low-cost inputs essential for a future hydrogen economy. This approach prioritizes long-term value and infrastructure ownership over speculative technology ventures, insulating the company from the early-stage risks that have stalled or cancelled over 40% of announced global green hydrogen projects.

Berkshire Hathaway’s “Picks and Shovels” Thesis

The company’s strategy is a classic “picks and shovels” play, investing in the tools needed for the gold rush rather than prospecting for gold itself. While other energy majors like Woodside Energy and Total Energies pursued large-scale hydrogen production projects, BHE focused on expanding its control over two critical precursors: low-cost, 24/7 renewable power and the raw materials for energy storage.

• Between 2021 and 2024, the market was characterized by ambitious gigawatt-scale green hydrogen project announcements, driven by policy incentives and decarbonization targets.
• By 2025, a market correction occurred, with high costs, uncertain offtake agreements, and regulatory ambiguity leading to widespread project delays and cancellations, as detailed in industry analyses of the market reckoning.
• Berkshire Hathaway’s response was not to compete in the crowded and risky production space but to solidify its position as a provider of the essential building blocks, leveraging its existing asset base and disciplined capital allocation.
• This infrastructure-first model contrasts with the strategies of companies like Enel, which focuses on developing hydrogen ecosystems around industrial hubs, by instead concentrating on the most fundamental level of the supply chain.

Positioning for Future Entry

By amassing a portfolio of foundational assets, BHE is positioned to either supply the eventual winners of the hydrogen production race or enter the market at scale itself once technology matures and costs decline. This patient approach allows the company to capitalize on the energy transition while avoiding the significant capital destruction seen in the early phases of the hydrogen market.

• BHE Renewables operates over 4, 500 megawatts of solar, wind, hydroelectric, and geothermal capacity, positioning it as a major potential supplier of green electricity for electrolysis.
• The company views the Inflation Reduction Act’s $3 per kilogram 45 V tax credit as a significant future opportunity for its baseload renewable assets, but it did not rush to meet the 2025 construction deadline, indicating a long-term perspective.
• With average hydrogen project CAPEX estimated at around $0.5 billion, Berkshire Hathaway has the capital to enter at a meaningful scale when the economics align with its stringent investment criteria.

$9.7 B Oxy Chem Deal, Berkshire Hathaway Cements Industrial Ties in 2025

Berkshire Hathaway’s 2025 capital allocation demonstrated a clear preference for large, cash-flow-positive assets in established industries and proven renewable infrastructure over speculative hydrogen ventures. The year was marked by a massive acquisition in the petrochemical sector and continued heavy investment in BHE’s non-carbon power generation portfolio, reinforcing its strategy of owning critical industrial and energy infrastructure.

The Oxy Chem Acquisition

The landmark transaction of the year was the acquisition of Occidental Petroleum’s chemical division, Oxy Chem, for $9.7 billion in cash. This move, while not a direct hydrogen investment, deepens Berkshire’s footprint in industrial sectors that are expected to become major consumers of clean hydrogen for decarbonization. It provides a strategic foothold in a key offtake market.

Continued Investment in Renewables

BHE confirmed that its cumulative investment in non-carbon power generation and energy storage surpassed $45 billion by the end of 2025. This massive, long-term capital deployment into proven technologies like geothermal, wind, and solar underscores a strategy of building a dominant position in low-cost, clean electricity production, a prerequisite for competitive green hydrogen.

Table: Berkshire Hathaway Key Energy Investments and Capital Allocations (2025)

Berkshire Hathaway’s Terra Lithium JV, a Critical Minerals Play in California (2025)

In 2025, BHE’s partnership strategy focused on creating new value from its existing renewable asset base through technology-centric joint ventures. Instead of forming alliances for hydrogen production, the company targeted the extraction of critical minerals, diversifying its revenue streams and securing materials vital to the broader energy transition.

Joint Venture for Lithium Extraction

The most significant partnership was the joint venture formed in August 2025 between BHE Renewables and Terra Lithium, a subsidiary of Occidental. This collaboration is dedicated to deploying Direct Lithium Extraction (DLE) technology to recover high-purity lithium from the geothermal brine at BHE’s power plants in Imperial County, California.

• The partnership’s goal is to establish a major domestic source of lithium, a material essential for manufacturing batteries for electric vehicles and grid-scale storage systems.
• This initiative transforms an operational byproduct (geothermal brine) into a high-value revenue stream, enhancing the profitability and strategic importance of BHE’s geothermal assets.
• By securing a supply of lithium, Berkshire Hathaway is investing in the stability of a renewables-heavy grid, which is a necessary foundation for large-scale electrolysis. This indirect support for the hydrogen economy is a core part of its strategy, distinguishing it from the direct production models of companies like Eni.

Table: Berkshire Hathaway Energy Strategic Partnerships (2025)

US Focus, Berkshire Hathaway Concentrates on Imperial County Geothermal Assets

Berkshire Hathaway’s energy transition investments in 2025 were geographically concentrated in the United States, specifically leveraging the unique geological and operational advantages of its assets in Imperial County, California. This domestic focus allows the company to capitalize on its existing infrastructure and navigate a single, albeit complex, regulatory environment, avoiding the geopolitical risks faced by companies like Qatar Energy with globally distributed projects.

Imperial County as a Strategic Hub

Imperial County is the center of BHE’s strategy due to its world-class geothermal resources. The hot brine that powers its geothermal plants is also rich in dissolved minerals like lithium, making it a perfect location for co-locating renewable power generation with critical mineral extraction. This synergy is the foundation of its partnerships with Terra Lithium and Alpha HPA.

• From 2021 to 2024, BHE maintained and operated its portfolio of ten geothermal plants in the region, which were primarily valued for their renewable electricity generation.
• In 2025, the strategic focus shifted to monetizing the mineral content of the geothermal brine, effectively turning the plants into dual-revenue assets for both power and critical materials.
• BHE Renewables is one of three major operators with announced projects in Imperial County, which collectively are forecast to create approximately 700 jobs, highlighting the regional economic importance of this strategy.

Global Role in Traditional Energy

While new investments are domestically focused, Berkshire Hathaway remains a significant player in global energy markets through its existing assets. Its Cove Point LNG facility holds a long-term contract to supply approximately 3.2 billion cubic meters of natural gas to India annually. This highlights the company’s dual role: operating critical legacy energy infrastructure while strategically investing in the domestic foundations of the next-generation energy system.

DLE Technology, Berkshire Hathaway Prioritizes Mineral Extraction Over Electrolysis

In 2025, Berkshire Hathaway prioritized investment in enabling technologies for the energy transition supply chain over direct investment in hydrogen production itself. The company’s focus was on demonstrating the commercial viability of Direct Lithium Extraction (DLE), a process that could secure a domestic supply of a crucial battery material, rather than deploying capital for the commercialization of large-scale electrolysis.

Backing an Emerging Extraction Technology

DLE represents a potentially disruptive shift in lithium production. Unlike traditional hard-rock mining or evaporation ponds, DLE technologies aim to selectively extract lithium from brines with a smaller environmental footprint and faster processing times. BHE is using its geothermal operations as a large-scale testbed for this emerging technology.

• The period from 2021 to 2024 saw numerous DLE technologies in the pilot and lab stage, with questions remaining about their scalability and economic performance in real-world conditions.
• In 2025, BHE’s partnership with Terra Lithium moved DLE toward commercial demonstration, leveraging an existing, high-volume brine stream from its geothermal plants. A successful deployment could validate the technology at scale.
• This focus on an adjacent technology contrasts sharply with the challenges facing large-scale green hydrogen projects, where the core electrolysis technology is mature but project economics are hampered by the high cost of renewable power and lack of firm offtake agreements. Other companies focusing on mobility, like ENOC, are tackling a different part of the value chain.

Future Technology Watchlist

While not an active investment area in 2025, emerging technologies like methane pyrolysis represent a potential future interest for BHE. This process splits natural gas into hydrogen and solid carbon, avoiding CO 2 emissions. As a major natural gas transporter through subsidiaries like Northern Natural Gas, this technology could one day allow BHE to leverage its vast existing pipeline infrastructure for clean hydrogen production, aligning with its strategy of adapting and repurposing long-lived assets.

What to Watch with Berkshire Hathaway: CEO Abel’s First Moves and the Terra Lithium JV

The single most critical factor shaping Berkshire Hathaway’s future hydrogen strategy is the leadership transition, with BHE veteran Greg Abel set to become CEO on January 1, 2026. His deep expertise in energy infrastructure is expected to reinforce the company’s patient, foundational asset strategy, but his initial capital allocation decisions will be a key signal of any strategic acceleration or shift.

• Performance of DLE Joint Venture: The technical and economic results from the Terra Lithium DLE demonstration project in Imperial County are paramount. A successful outcome could trigger a multi-billion-dollar investment to build out a world-class lithium production business, further solidifying BHE’s role as a critical materials supplier for the energy transition.
• Capital Allocation Post-Oxy Chem: How Berkshire Hathaway integrates the $9.7 billion Oxy Chem acquisition will be telling. Watch for any moves to leverage these new industrial chemical connections to explore hydrogen offtake agreements or to develop low-carbon manufacturing processes, which could create captive demand for future hydrogen production.
• Decision on 45 V Tax Credit: While BHE did not rush projects for the 2025 construction deadline, the 45 V production tax credit remains a powerful incentive. Any announcement of a pilot project connecting BHE’s vast solar, wind, or geothermal portfolio to an electrolyzer would signal a direct entry into hydrogen production, likely timed for when costs and offtake security meet its criteria.
• Leadership and Strategy Under Greg Abel: Warren Buffett’s retirement at the end of 2025 marks a major transition. Abel’s history at the helm of BHE suggests a continuation of disciplined, long-term infrastructure investment. His first major energy-related capital decisions as CEO of the parent company will be closely scrutinized for any change in risk appetite toward emerging technologies like hydrogen.

The questions your competitors are already asking

This report covers one angle of Berkshire Hathaway’s energy transition strategy. The questions that matter most depend on your work.

• Geothermal lithium extraction projects in California
• Greg Abel’s track record on energy investments
• Which companies are building hydrogen projects for the tax credit
• How chemical companies plan to use clean hydrogen

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