The Race To Clean Hydrogen Is On. Can Houston Lead The Way?

Emily Pickrell, UH Energy Scholar

The hydrogen economy is coming, and the Biden administration is working hard to move it along.

On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act, which included $9.5 billion in funding to accelerate the development of a clean hydrogen technology. The legislation is intended to help begin the transition to clean hydrogen as both a fuel for manufacturing and as a transportation fuel.

It’s still early days, as potential hydrogen production centers have started cropping up, even as the technology to make economically competitive clean hydrogen is still maturing.

Several regions are putting in their shot to fulfill the Biden administration’s goal of reducing the cost of clean hydrogen by 80 percent to $1 per kilogram in the next ten years. The potential benefits have already been quantified by the Dept. of Energy: a potential for 16% carbon dioxide emission reduction by 2050, as well as $140 billion in revenues and 700,000 jobs by 2030.

Houston has some natural advantages in the conversation. More than 900 miles of hydrogen pipelines and more than a third of the already existing hydrogen production are centered around Houston. Most of this production is for what is called gray hydrogen, meaning that it has a high carbon footprint. (This grey hydrogen is produced using methane steam reforming, which produces both hydrogen as well as carbon dioxide and carbon monoxide as by-products.). It also has a mature wind energy industry and generous solar capabilities.

Yet Houston’s strongest argument may actually be its demand for the kind of power hydrogen can produce, rather than its production capabilities.

“We have some structural advantages here in Houston, including a significant industrial demand for hydrogen,” said Alan Rossiter, a chemical engineer at the University of Houston. “This anchor demand would allow us to develop large-scale clean hydrogen more effectively with lower risk than anywhere else in the market.”

Oil and gas companies in Houston are already investing in the technology that can remove and store the emissions from gray hydrogen. One of the biggest of these, ExxonMobil, has already  developed a consortium of industry partners and a $100 billion proposal to develop an industry-leading deployment of carbon capture and sequestration, or CCS. CCS is an existing technology that can create blue hydrogen by removing these carbon emissions. What it needs is to become commercially viable, a process that typically involves an initial level of government support and investment.

And ExxonMobil is frank in its view that this investment should come to Houston, for the benefit of the environment and the greater Houston area alike.

“Wide-scale, affordable deployment of CCS in the Houston area will require the support of industry, communities and government,” ExxonMobil explained on a company website that details its plans for its carbon capture technology. “If appropriate policies and regulations are put in place, CCS could help the United States and Houston reach net-zero goals while generating new jobs and protecting existing jobs that are important to Houston’s economy.”

It’s an argument with merit: The U.S. Gulf Coast is large enough to store about 500 billion metric tons of carbon dioxide, and the refinery and petrochemical facilities that line the coast would not have to transport the emissions if blue hydrogen were used.

Yet others are leveraging Houston’s advantage as an oil-and-gas mecca to question whether the region will ever be able to think beyond oil-and-gas based hydrogen production with CCS as its back-up.

They challenge the notion that a Houston-led shift to hydrogen will mean an eventual move from natural gas-produced blue hydrogen to green hydrogen, which is made through electrolysis, splitting water into hydrogen and oxygen.

“Fossil fuel companies are suggesting that the ‘hydrogen economy’ could get started out running on brown hydrogen, then switch later on to blue hydrogen, and yet later on to green hydrogen, as CCS and finally electrolyzer technology becomes less expensive,” wrote Alex Grant, who leads a clean energy technology consulting firm, in Clean Technica. “It is a bait-and-switch scam.” 

Meanwhile, other potential hubs that are talking about green hydrogen from the get-go are starting to emerge.

Hy Stor Energy recently announced it had chosen Mississippi for one of the largest green hydrogen production sites in the world. It argues that the state has great infrastructure and plentiful storage capabilities.

States like Massachusetts have developed studies highlighting their advantages, including a track record of thoughtful climate change plans.  

Brett Perlman, the chief executive officer for the Center for Houston’s Future, says the advantages other states offer right now is just that – talk. 

“None of this is a done deal – everyone wants to say they are doing something,” Perlman said. “None of these proposed projects actually exist at this time – they are just resources. All these regions are trying to make the case for the largest amount of federal dollars for energy ever. It is not a done deal, by any stretch of the imagination.”

And while Houston has a home court advantage of about a third of U.S. hydrogen production, huge pipeline infrastructure and ample storage facilities, it also needs to explain how this will help it push forward the technology development of clean hydrogen, rather than hold it back. It’s work that organizations like the Center for Houston’s Future have focused on, developing – together with the University of Houston – an explanation for how the region can do so.

One of its strongest arguments goes back to its proximity to the demand for the kind of energy that Houston uses for refining and manufacturing – power that it difficult to replace with electricity.

It’s a niche that hydrogen could fill, taking the place of the 26 billion cubic feet of natural gas used daily in this country for industrial consumption. And this production could be up-and-running in the quantities demanded, relatively quickly, without having to worry about building a nationwide pipeline infrastructure to move the hydrogen to where it’s needed.

But there’s more Texas’ oil and gas business could do. 

It could show it means business by implementing the CCS technology as quickly as possible. Texas could also strengthen its hand by making its own climate change plans, and explaining how its development of a hydrogen hub will fit into it.

And it could showcase its arguably most valuable asset: human talent. Houston has a concentration of energy industry knowledge that has few competitors worldwide, let alone on our domestic shores.

“While there may be other places where people are doing R&D work on electrolyzers or wind turbines, when it comes to taking something and scaling it up, there is no place that has the professional and technical capabilities that we have,” said Greg Bean, executive director of the Gutierrez Energy Management Institute at the Bauer College of Business at University of Houston. “We have an energy workforce that knows how to do project development, project engineering, project finance, maintenance of capital plants – you name it.”

Emily Pickrell is a veteran energy reporter, with more than 12 years of experience covering everything from oil fields to industrial water policy to the latest on Mexican climate change laws. Emily has reported on energy issues from around the U.S., Mexico and the United Kingdom. Prior to journalism, Emily worked as a policy analyst for the U.S. Government Accountability Office and as an auditor for the international aid organization, CARE. 

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.