Exxon To Mount A Major Hydrogen, CCS Project At Its Baytown Complex

As part of its expanding Low Carbon Solutions business unit, ExxonMobil announced plans on Tuesday to mount a major new “blue” hydrogen production and carbon capture and storage (CCS) project at its venerable Baytown Refining and Petrochemical Complex. When completed, the company says it will be one of the largest CCS projects in the world.

“Hydrogen has the potential to significantly reduce CO₂ emissions in vital sectors of the economy and create valuable, lower-emissions products that support modern life,” said Joe Blommaert, president of ExxonMobil Low Carbon Solutions. “By helping to activate new markets for hydrogen and carbon capture and storage, this project can play an important part in achieving America’s lower-emissions aspirations.”

The project is part and parcel of Exxon’s larger plans for a massive CCS effort to capture emissions from the Houston area’s largest industrial facilities and sequester them in underground pore space up and down the Texas and Louisiana Gulf Coast. Last September, Exxon, along with 10 other major companies with facilities along the Houston Ship Channel, announced plans to cooperate in that larger venture.

In Tuesday’s release, the company says that “The project would form ExxonMobil’s initial contribution to a broad, cross-industry effort to establish a Houston carbon capture and storage hub with an initial target of about 50 million metric tons of CO2 per year by 2030, and 100 million metric tons by 2040.” Exxon also estimates the Baytown project will reduce the complex’s Scope 1 and Scope 2 emissions by as much as 30% as part of its plan to achieve net-zero in its operations by 2050.

Exxon already produces about 1.5 billion cubic feet of hydrogen per day, and has extensive experience in that business. It is also the world’s largest operator of CCS facilities, and continues to explore for additional opportunities in that business as well. In its release, Exxon notes that it “has cumulatively captured more human-made CO₂ than any other company and has an equity share of about one-fifth of the world’s carbon capture and storage capacity, which amounts to about 9 million metric tons per year.”

While the Biden administration and governments in other Western democracies rush to subsidize wind and solar, hydrogen and CCS projects are quickly expanding despite a comparative lack of government subsidization. As I noted last November, Shell is mounting a major global blue hydrogen initiative that would be accompanied by carbon capture and storage. Howard Energy recently announced a carbon neutral project of its own that will produce blue hydrogen using the tailgate gas collected from the various refinery operations at the Port of Corpus Christi, making productive use of natural gas that is currently flared or otherwise disposed of.

These carbon-reducing ventures have a tremendous amount of potential, and they make sense for oil and gas companies due to long industry experience and the synergies in staffing and professional expertise required. Like oil and gas, hydrogen and CCS are engineering and geo-science focused businesses.

Given the current energy crisis taking place in Europe, it seems likely that, as this energy transition evolves, the hyper-focus on wind, solar and EVs we have witnessed thus far will expand into a broad realization that other carbon-reduction solutions will be equally important to meeting the world’s climate change goals.

While climate change activists have attempted to demonize hydrogen made from natural gas by inventing competing colors for this colorless gas, a proper focus on actual carbon reduction results shows the utility for “blue” hydrogen in this area. Obviously, it’s a business fit for purpose for companies that are already big producers of natural gas, and an efficient way to achieve major emissions reductions in their existing downstream businesses, like Exxon’s Baytown Complex.

*** *** ***

On another Exxon-related note, the company recently had an important development at its other major Gulf Coast downstream facility, the Beaumont Refinery and Chemical Complex. There, management and the local steelworkers labor union were able to reach terms to end a labor dispute that had been ongoing since about 600 union workers were locked out by the company on May 1 of last year.

The union vote to accept the company’s latest back to work proposal was 214 to 133.

As I noted in a story last October, despite Texas’s status as a right to work state, ExxonMobil’s involvement with the steelworker’s union at the Beaumont facility dates back to 1940, when Local 13-243 was established during the buildup to World War II.

The date for workers to return to their jobs is uncertain, but it could happen within the coming week.