Hydrogen projects are picking up steam in Houston as climate bill spurs renewables

By Amanda Drane

The Houston Chronicle, Oct. 25, 2022


Coalitions of energy companies are lining up to build hydrogen projects as the Inflation Reduction Act lights a fire under an industry that was already percolating.

Companies such as New York-based New Fortress Energy and European fertilizer company OCI are advancing separate hydrogen projects in Beaumont, joining several oil majors that are planning their own projects in the region, according to recent announcements. Chevron and Houston chemical giant LyondellBasell said last week they will partner with European companies Air Liquide and Uniper “to pursue” a Gulf Coast hydrogen project.

Energy companies are so far offering few details about their projects as they scramble for a piece of what some believe could grow to a $1 trillion market. The fossil fuel alternative is gaining traction as a way to clean up emissions from ships, manufacturing facilities and other industries that are difficult to electrify.

ExxonMobil is planning to build the nation’s largest hydrogen facility at its refining and petrochemical site in Baytown. ConocoPhillips is working with the Japanese utility JERA for a clean hydrogen plant on the Gulf Coast. BP is working with the British industrial firm Linde to capture carbon emissions from their hydrogen plants in Texas.

The push is getting a boost from billions of dollars worth of hydrogen tax credits available through the federal Inflation Reduction Act, which doubles down on the $7 billion awarded to the Department of Energy last year to develop six to 10 hydrogen hubs around the country.

The industry-heavy Gulf Coast region offers the ideal opportunity to show the world how carbon capture and hydrogen technologies can provide “immediate” solutions from high-emissions areas that are difficult to abate, said Adam Peters, CEO of Air Liquide’s U.S. subsidiary.

Air Liquide’s potential hydrogen project with Chevron, LyondellBasell and the German utility Uniper would be “truly transformative” for the area, said Marc Merrill, CEO of Uniper’s North American subsidiary.

The fertilizer company OCI has begun building a Beaumont facility capable of producing 1.1 million metric tons per year of hydrogen-based “blue” ammonia, joining Exxon and CF Industries in the race to make a fuel the companies said could play an important role in decarbonizing industrial facilities such as refineries, petrochemical plants and power generators.

Companies aim to sell hydrogen as a replacement for natural gas, which is the primary fuel used for power generation. A project under development by New Fortress Energy would build a 120 megawatt hydrogen facility in Beaumont. Last week, the company announced it would partner with retail electric provider Entergy Texas on a substation and transformer connections on the site

“New Fortress Energy’s facility is a significant development for Southeast Texas,” said Eliecer Viamontes, CEO of Entergy Texas, noting the project complements his company’s hydrogen-enabled power station project in East Texas.

The preliminary agreement between New Fortress and Entergy sets the stage for the companies to work together on renewable power generation, and for Entergy to buy green hydrogen from the Beaumont facility for use at its nearby power station.

Entergy said the investment is part of its $2.5 billion spending plan to help develop clean energy in the region over the next two years. New Fortress expects to begin producing green hydrogen in Beaumont as early as 2024.

Originally posted on The Houston Chronicle.

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