October 18, 2021 • Paul Rodden • Season: 2021 • Episode: 56
Welcome to The Hydrogen Podcast!
In episode 056, The Economist talks about the hydrogen market. Air Products announces a four and a half billion dollar blue hydrogen energy complex in eastern Louisiana, and Germany's viewpoint on the hydrogen color palette. All this on today's hydrogen podcast.
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The Economist talks about the hydrogen market. Air Products announces a four and a half billion dollar blue hydrogen energy complex in eastern Louisiana, and Germany's viewpoint on the hydrogen color palette. All this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
So I wanted to start off today's podcast highlighting this press release by air products. announced on October 14, Louisiana governor Edwards and Air Products announced landmark us four and a half billion dollar blue hydrogen clean energy complex in eastern Louisiana. And so if and when this project gets launched, it will be air product largest ever investment in the United States. And with this project being located in Louisiana, it will make the state a leader in the United States clean energy transition. Now Air Products is a world leading industrial gas company that produces and transports hydrogen and other essential industrial gases to many customer facilities in Louisiana, and across the United States in the Gulf Coast, but also globally, Air Products will build and own and operate the mega project, which will produce over 750 mm fcf per day of blue hydrogen and the Ascension Parish of Louisiana.
Now blue products are produced utilizing hydrocarbons as a feedstock with the carbon dioxide in the production process captured for permanent sequesteration. The project will create 170 permanent jobs with a total annual payroll of 15.9 million and more than 2000 construction jobs over three years. And it represents Air Products largest ever investment in United States. So a portion of the blue hydrogen will be compressed and supplied to customers by Air Products extensive us Gulf Coast hydrogen pipeline network. The network is the largest hydrogen pipeline system in the world, stretching more than 700 miles from Galveston Bay in Texas to New Orleans, Louisiana. Today, this vast us Gulf Coast pipeline network can supply customers, with more than 1.6 billion cubic feet of hydrogen per day from approximately 25 production facilities, including blue hydrogen from Air Products Port Arthur, Texas facility.
The Port Arthur facility has captured approximately 1 million tonnes of carbon dioxide annually since 2013. With the co2 transported via pipeline and utilized for EOR operations. Now the balance of blue hydrogen from the new Ascension parish facility will be used to make blue ammonia that will be transported around the world and converted back to blue hydrogen for transportation and other markets. The innovative mega project will also feature the world's largest instance of co2 capture for permanent sequestration and produce only environmentally friendly blue products. The Mega project is expected to be operational in 2026. So this announcement is big news. And this project dwarfs any kind of blue hydrogen production right now on the Gulf Coast. And this also makes another massive step forward in advancing the hydrogen infrastructure in the United States. And with this announcement coming out the day before this recording Air Products has already seen a two and a half point bump in their stock prices and over the last 10 days has seen an almost 40 point bump. So congratulations to Air Products, and I look forward to seeing construction get underway for this mega project.
Next in an article from dw.com, Germany chooses to walk colorblind into the hydrogen future. In the article Uwe Hessler writes, Germany sees green hydrogen as the silver bullet for carbon neutrality in sectors with particularly stubborn emissions. But a national hydrogen plan is a source of heated debate and may see changes after this election. In one of its final pieces of legislation, the government of Chancellor Angela Merkel sought to polish its uninspiring climate credentials with a surprise announcement in May that it wants to make Germany carbon neutral by 2045. Five years earlier than planned. Apart from the usual underpinnings of a decarbonisation plan, like boosting emobility. Berlin considers hydrogen to be a central element in the transformation. Merkel's government presented a national hydrogen strategy back in June of 2020. claiming to make Climate Protection possible in sectors where it's difficult such as steelmaking, manufacturing, aviation and heavy duty transport on ships, railways and trucks.
There carbon neutrality is possible is according to Environment Minister Svenja Schulze as she presented the strategy because, quote, we perceive green hydrogen to be the solution. Unquote. There's a reference to the German aim of making hydrogen solely with the help of wind, solar and other renewable energy. The push to create a reliable, affordable and sustainable production of hydrogen and establish a quality infrastructure for transport and storage will be supported with the initial state funding to the tune of 7 million euros and an additional 2 million euros earmarked for international partnerships to secure hydrogen imports from abroad. The government hopes to bring green hydrogen production equipment with a total capacity of five gigawatts and operation by 2030. And an additional five gigawatts by 2040.
The figure five gigawatts in essence, represents the power of five nuclear reactors combined and equates to the annual energy demand of Lithuania. The article continues that at the moment, almost all of Germany's hydrogen is gray hydrogen, which is similar to the United States, which means it's produced using hydrocarbons. It's relatively inexpensive, with the price still five times lower when compared with green hydrogen. And like Germany's liberals, the European Commission has acknowledged all four types of hydrogen including blue, green, and turquoise, are important for achieving carbon neutrality. Saying fossil based hydrogen with carbon storage is a crucial stepping stone in growing a hydrogen market in its early stages. But the debate in Germany is heating up. According to Katherina Reiche, a senior executive at energy company Eon believes that in the next few years, quote, The alternative is not green or blue hydrogen, but blue hydrogen or coal. Reiche made her comments as the chairwoman of the German hydrogen Council, a panel of 25 experts from business, civil society and environment groups charged by the government with monitoring the national strategy.
In July of 2020, Reiche also presented a council report that made a strong statement in support of blue hydrogen, stating that green hydrogen alone will not be sufficient to decarbonize Germany industry, and that limiting the hydrogen market to a single source will, quote, do more harm than good. So it's interesting to see that across the globe, several countries have this internal turmoil regarding the colors of hydrogen, ie which method of production is the best, which is why I firmly believe that as hydrogen becomes more and more mainstream, broader investments in the hydrogen space and more specifically, development technologies will be critical in supplying enough hydrogen to global industries. And lastly, I'd like to highlight some points from the economist's article hydrogens moment is here at last.
Today, climate change is causing a new wave of enthusiasm. With more than 350 big projects underway, and cumulative investment could reach $500 billion By 2030. Morgan Stanley reckons that annual sales of hydrogen could be worth 600 billion by 2050. That's up from 150 billion of sales today, which come mainly from industrial processes, including making fertilizers. India will soon stage auctions for hydrogen and Chile is holding tenders for its production on public lands. Over a dozen countries including Britain, France, Germany, Japan and South Korea have national hydrogen plans. The article continues on listing the mainstream uses of hydrogen, including helping in niche markets involving complex chemical processes in high temperatures that are hard to achieve with electricity.
Steel firms, which account for roughly 8% of global emissions usually rely on coking coal and blast furnaces that wind power can't replace, but which hydrogen can using a process known as direct reduction. Hybrid, a Swedish consortium sold the world's first green steel made this way in August. The article continues describing other niche markets including commercial transport, which includes heavy trucking, rail, aviation, and shipping.
Now to the listeners of my show, this isn't new. But what is interesting is the amount of attention The Economist is paying to this, that one of the biggest differences between this hydrogen boom and the ones of the 70s and 80s is A. the technological advancements we now have at our disposal and B. the amount of finances being thrown at this market now. And that means that investors are seeing the energy transition broadly and hydrogen market specifically as lucrative.
Alright, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, come and visit me at thehydrogenpodcast.com and let me know. I would really love to hear from you. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you'd liked this podcast. If you did want to hear more. I'd appreciate it if you would either subscribe to this channel on YouTube or connect Your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.