THP-E58: Today Let’s Talk Pipelines In The Gulf Coast, Bank Licking Their Lips Thinking About Hydrogen Investment, And I Answer Why Hydrogen Is A Great Long Term Play For Investors

October 25, 2021 • Paul Rodden • Season: 2021 • Episode: 58

Welcome to The Hydrogen Podcast!

In episode 058, Linde starts up a major new hydrogen facility in the US Gulf Coast. The Economist talks about the different industries that are running into hydrogen. And I answer a very loaded question from our inbox. All of this on today’s hydrogen podcast.

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Linde starts up a major new hydrogen facility in the US Gulf Coast. The Economist talks about the different industries that are running into hydrogen. And I answer a very loaded question from our inbox. All of 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 in this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.

On October 21, Linde announced that it has started up a new world scale hydrogen production facility in Texas bring Linde’s total US Gulf Coast hydrogen capacity to approximately 1.5 billion cubic feet per day. Linde’s new plan has started supplying high purity hydrogen to the Phillips 66 Sweeney refinery in Old Ocean Texas, under a long term supply agreement. The new facility is located on Linde’s approximately 600 kilometer us Gulf Coast hydrogen pipeline, which runs from Lake Charles, Louisiana to Freeport, Texas, and now has been extended to connect to the Sweeney refinery. In addition to supplying Phillips 66 the new facility will meet the growing demand for hydrogen from other customers in the region.

And a quote from Jeff Barnhard, Vice President South region of Linde. Over the past five years, we have significantly expanded our already robust hydrogen supply system in the US Gulf Coast, supported by multiple supply sources and an innovative high purity hydrogen storage cavern. This infrastructure enables us to provide our customers with reliable long term supply. We are proud to have started up this major project on a budget despite the macro challenges we encountered. Now Linde is a global leader in the production processing, storage and distribution of hydrogen. It has the largest liquid hydrogen capacity and distribution system in the world. The company operates the world’s first high purity hydrogen storage cavern plus pipeline networks totaling approximately 1000 kilometers globally to reliably supply its customers.

Linde is at the forefront of the transition to clean hydrogen and has installed approximately 200 hydrogen fueling stations and 80 hydrogen electrolysis plants worldwide. The company offers the latest electrolysis technology through its world class engineering organization, key alliances and partnerships. So it’s great to hear that Linde is further investing in the US Gulf Coast. And what I’m hoping to see is that supply of hydrogen trickles inland, especially now that they’re piping hydrogen from Freeport to the Sweeney refinery. Next in an article from the economist, all manner of industries are piling into the hydrogen rush. In this article, they state that hydrogen is expected to play a big role in greening hard to decarbonize sectors such as cement and steel, as well as in long term energy storage. Today’s smallish and because most all the stuff is made from hydrocarbons in a carbon intensive way. Dirty-ish hydrogen business is forecast to grow into a much cleaner trillion dollar industry in a few decades.

Governments are spending 10s of billions of dollars a year to kickstart a clean hydrogen revolution. A posse of hydrogen curious firms are keen for a piece of the action. of Credit Suisse sees natural gas industry as a template for the development of hydrogen which is already used in refining. The rise of liquefied natural gas took the sort of capital and expertise that only the integrated global energy giants had small wonder Big Oil is taking an interest. In September Chevron, which is an American oil Titan, unveiled a $10 billion strategy for new energy. The bets big on low carbon hydrogen, but Chevron isn’t alone. The other super majors including BP, Exxon Mobil, shell and Total have also announced investments in hydrogen clusters and technologies. And as I’ve also covered recently, Air Products is developing several hydrogen mega projects around the world, including a $5 billion initiative to produce renewable hydrogen in Saudi Arabia for export.

James West of Evercore, which is an investment bank reckons industrial gas firms could become the first Super majors of the hydrogen era. Now what I find interesting about this article are the quotes from Credit Suisse and Evercore are both seeing positive signs for the hydrogen industry. And well, that’s not necessarily a big surprise to any of us in the hydrogen space. There are some people who just don’t understand it. Which leads me to address a question we got in our inbox. The question begins with when I studied the conversion process for blue and look at the relative cost I asked myself except for the industrial hydrogen part. Why they don’t just ship gas through well developed infrastructure, use CCUS at the utility stage and get twice as much energy density as hydrogen. He says gassing 70% density two hydrogens 30% density and skip the double conversion cost and infrastructure build out.

He continues never in the history of energy source transition has the world moved in any substantial or sustainable way from a higher energy density source to a lower density source. Again, he quotes gassing 70% to hydrogen 30% plus all the cost of conversion. In spite of the economic irrationality, a lot of smart people are pushing forward. However, history teaches us that businesses that engage in crony capitalism implementing business decisions handed down by politicians live to regret it. It will be fascinating to observe this green movement over the next decade and a half. With all the associated capital destruction. Russia and China are laughing in utter amazement, and also egging on the west. He also continues, can you help me understand the West determination to cut their energy, economic and geopolitical throats? Can you enlighten me? Let definitely is a loaded question with quite a few assumptions.

And let’s start by addressing the first part of what he says. With the conversion cost for blue and the relative associated costs. Why don’t we just ship gas through well developed infrastructure, use CCUS at the utility stage and get twice as much energy density and skip the double conversion cost and infrastructure build out? Now one thing he may not realize is that he stumbled onto something that a lot of people are actually doing. Companies like Excel plus, Monolith, and Raven, are doing things very similar to this, and that they’re setting up their modular units, where their feedstock material is most accessible, and where it can be quickly deployed. And whether that feedstock is renewable natural gas extracted hydrocarbons, or landfills. Many companies that are developing small modular units are looking more into developing hubs and utilizing the hydrogen nearby versus creating the hydrogen and transporting it somewhere else.

And to his comment about energy density, it is a bit misleading, because if we’re talking about equal temperature and pressure, yes, LNG, ammonia, and DME are all more energy dense than hydrogen. However, per unit mass, there is no element or combination of elements that is more energy dense than hydrogen. And that fact alone is pushing a lot of this forward. He also goes on to call this economic irrationality. But as I’ve just previously mentioned, there are several banks that believe there is a very lucrative future in hydrogen. So why are so many smart people moving forward with this? Well, simple answers technological developments. In just the last two years, we’ve seen a substantial drop in development cost across the board for all types of hydrogen development, and those costs will only continue to decrease. Now, he does make a very interesting point here about crony capitalism, of all the executives that I’ve talked to very few are looking to align politically with anyone. But that can also be considered anecdotal.

But I also understand his point, as we look at Europe right now struggling to meet their energy demand. This was as a result of many European nations pulling back from hydrocarbon developed energy sources. As I continue to say, we’re in an energy transition. This is not like a light switch. This is also one of the reasons I like hydrogen so much, is that it can be developed from very clean sources, but it can also be used to clean up historically dirty sources. Now, he ends this segment with Russia and China. And I think it’s a safe bet to say that Russia will never give up on LNG and oil, and China will never give up on coal. But what I also believe is they’re not putting nearly enough r&d into hydrogen when the transition does move further along.

As an example, the technology in the United States right now, and several places in Europe are currently developing hydrogen for under $2, a kilogram that has taken a lot of investment, a lot of research and a lot of development. And I believe in the next 15 years, those industries and countries that utilize and leverage their historical energy production, and continue to transition to new methods will be the most successful and prosperous. And there are some other things to note, I actually know the person who sent this question in. He’s actually a very smart businessman, and a king of Finance. And I believe one of the reasons why he’s so against hydrogen is the risk profile. Right now, investing in hydrogen is very risky.

And the returns probably won’t pay off for at least a decade, at least in any measurable way. But I’ve also noted in the past that some large corporations understand this, and that they also realize that this is going to be a very long transition cycle with several moving pieces. So if you’re an investor looking for a quick turnaround with low risk, hydrogen, isn’t there, at least not now.

Okay, that’s it for me everyone. If you have any questions, comments or concerns about today’s episode, come and visit me at and let me know. I would really love to hear from you. And as always, take care. Stay safe. Talk to you later.

Hey, this is Paul. I hope you’d like 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 with your favorite platform through my website at Thanks for listening. I very much appreciate it. Have a great day.