by Adam Peters, in the Beaumont Enterprise, August 27, 2024: https://www.beaumontenterprise.com/opinions/columns/article/texas-energy-leader-19718987.php
The State of Texas is a powerhouse: it generates more electricity than the rest of the country as a whole. In addition to producing nearly half of the U.S. crude oil and nearly one-third of U.S. natural gas, it also provides over a quarter of our wind-powered electricity and has tripled its renewable power production in the last decade.
This success, alongside its existing energy infrastructure and the presence of a skilled and experienced workforce, is allowing Texas to lead by example the next phase of American energy leadership.
This makes new investments in decarbonization solutions and technology like Air Liquide’s recently announced $850 million investment project into ExxonMobil’s planned low-carbon hydrogen and ammonia Baytown Complex critically important. Air Liquide will, pending final investment decision, provide the facility with low-carbon oxygen and nitrogen to support the production of 1 billion cubic feet of hydrogen and more than 1 million tons of ammonia annually.
The investment supports the development of what is expected to be the world’s largest low-carbon hydrogen project, signifying not only our commitment to hydrogen’s role in achieving the United States’ decarbonization goals but also our strong belief that Texas and the Gulf Coast are uniquely poised to help lead this nation’s clean energy transition, while simultaneously spurring economic growth.
The hydrogen and ammonia produced by the facility is expected to be used in fuel switching, energy exports and for commercial transportation like long-haul trucking, marine and aviation.
And in the case of Texas’s more carbon intensive manufacturing operations, technological solutions will improve sustainability and allow traditional production processes to adhere to increasingly strict environmental regulations, allowing these facilities to continue to operate, preserving jobs and other economic benefits. For example, Air Liquide will be building and operating large modular air separation units for the Baytown facility that use 25 percent less electricity for oxygen production and will be powered by renewable and low-carbon electricity, which will significantly reduce the project’s carbon footprint.
These are some of the same goals driving the establishment of the U.S. Department of Energy’s (DOE) Regional Clean Hydrogen Hub program, which is meant to establish a series of local hydrogen economies across the United States and provide the skeleton for what can eventually grow into a national hydrogen network. Once operational, these hubs will drive local clean energy economies, stimulate regional economies at key industrial basins across the country, and make it more cost effective for industries spanning our economy to invest in decarbonization efforts.
Air Liquide is a proud partner in six out of the seven hubs approved by DOE for initial funding, including the HyVelocity Hub, which will support Texas and the Gulf Coast region and generate 45,000 new jobs.
The Hub program is intentionally ambitious because the United States has set ambitious decarbonization goals. These goals can’t be achieved without greater investment and deployment from the private sector and, as important, clear policies from the public sector that incentivize that investment.
One example where the federal government can provide some clarity is the clean hydrogen production tax credit (HPTC) contained within the Inflation Reduction Act. The HPTC has the potential to send a strong signal to the marketplace that the U.S. hydrogen ecosystem is ripe for investment and funding. However, in order for that potential to become a reality, it must be implemented in a way that facilitates growth. That means providing the U.S. hydrogen industry with the flexibility needed to meet the HPTC’s tough carbon intensity targets and grow the market until it reaches a maturity that allows it to shoulder increased regulation. The industry may be in a position to take on more stringent restrictions and still meet the low carbon intensity targets of the HPTC for projects beginning construction in 2030, aligning with DOE’s proposed timeline for getting the hydrogen hubs up and running.
Providing investors with greater certainty and clarity will better allow us to advance the energy transition more swiftly – from decarbonization to new, long-term career paths to enhanced innovation-driven energy diversity. New low-carbon hydrogen facilities like the Baytown Complex are enormous undertakings, but they are vital to a secure and prosperous future. It is therefore paramount that U.S. energy policies create an environment in which it is possible to invest, build, and grow.
Throughout its history, Texas has demonstrated how energy leadership can evolve with the addition of new technology. Likewise, it has shown how energy can drive a powerful economy and support our national security through global cooperation. We firmly believe that the continued growth of clean energy technology stands to extend that legacy as we advance our nation’s clean energy transition.