The Texas Gulf Coast has been selected by the Biden administration as a clean hydrogen hub, one of seven locations across the United States set to receive billions of dollars in federal funding and private investment to help develop a technology seen as critical to reducing the country’s greenhouse gas emissions.
The Gulf Coast hub, which would be centered in Houston, will receive up to $1.2 billion in federal funding and is expected to be the largest of the seven hubs in terms of clean hydrogen production. It will produce both blue hydrogen, made from natural gas with carbon emissions stored underground, and green hydrogen, made by running electricity from wind and solar farms through water — a process long used by NASA to power spaceships.
“We’re looking forward to working with our friends in Texas to show how much cost savings can be achieved by scaling the technology as much as possible,” a senior administration official said, on the condition of anonymity, as the plans were not yet public.
In March, the Department of Energy selected three Texas hydrogen proposals, including two in Houston, to submit applications for the funding.
The three included HyVelocity Hub, a group that included Exxon Mobil, the University of Texas at Austin, French gas supplier Air Liquide, California-based oil major Chevron, the nonprofit Center for Houston’s Future and GTI Energy, a research and development company based in the Chicago area; a consortium made up of the University of Houston, the Southern States Energy Board, the National Energy Technology Laboratory, Marathon Petroleum subsidiary MPLX and chemical companies INEOS and Linde; and a group led by the Port of Corpus Christi.
On Friday morning, HyVelocity announced their project had been selected and they would work to “leverage the world’s largest concentration of existing hydrogen production and end-use assets in Texas and Southwest Louisiana.”
The expectation within the administration is that clean hydrogen will allow the decarbonization of heavy industries such as cement and steel, along with long-haul trucks and cargo ships, sectors that are likely to prove difficult to power with renewable energy.
The decision follows a yearlong-plus effort by Texas politicians, business leaders and academic institutions to land one of the hubs, with hopes of developing the Gulf Coast into a center for clean hydrogen the same way it is for the refining of petroleum-based fuels.
See here for the background, here for the city’s press release, and here for more about HyVelocity Hub. Evan Mintz is forever banging the drum on Twitter for how Houston needs to be a leading force in the new energy industry as it has been in the fossil fuel industry. We have plenty of infrastructure and expertise, and frankly we need the economic engine to keep on humming so we don’t face the kind of decline many old manufacturing cities have had to deal with. This is a step in that direction.
To that end, I direct you to this interesting article about the particular vehicle that the Biden administration has chosen for this program.
The Biden administration announced on Friday that it would spend up to $7 billion to create seven new “hydrogen hubs” across the country. These hubs will house large-scale industrial facilities specializing in producing, moving, and using hydrogen, a potent gas that could play a range of roles in a climate-friendly economy. Hydrogen, which does not emit carbon pollution when burned, could decarbonize long-distance trucking, energy storage, chemical making, and heavy industry.
These hubs will, as my colleague Emily Pontecorvo writes, become important public-private laboratories for the use of clean hydrogen. They will complement tens of billions of dollars in tax credits that could soon support a clean hydrogen industry.
Although these hubs are a key part of the president’s climate strategy, they are not created by his signature climate law, the Inflation Reduction Act. They were funded, instead, by the bipartisan infrastructure law, which passed in December 2021.
That same legislation also spent $3.5 billion to create new direct air capture hubs, big regional facilities that will deploy technology capable of sucking carbon dioxide from the ambient air. In August, the Energy Department awarded the first of those hubs to Texas and Louisiana.
It matters that these two “hub”-based programs command some measure of bipartisan support. It signals, first, that these programs are likely to endure even if the GOP takes the White House next year. It shows, too, that Republicans in Congress — and especially in the Senate, where 19 Republicans voted for the infrastructure law — can back climate policy under some conditions. (Even if those conditions might involve having to negotiate with a Democratic president.)
It certainly helps, too, that hydrogen and direct air capture are two potentially climate-friendly industries where the fossil fuel industry could play the largest role. The chief executive of Occidental Petroleum, a fossil-fuel company that is building one of the first air-capture hubs, has even argued that carbon removal technology could allow the oil and gas industry to operate for decades to come.
But the bipartisan support for these programs reveal something else, too — a deeper change in how America’s leaders think about governing and growing the economy. Most coverage of the hubs has elided the fact that they’re called “hubs,” almost treating the word “hub” as a synonym for “big new economic thing.” But the hubs are called “hubs” for a reason; don’t snub the hubness of the hubs. The hubs are meant to do more than create new experimental industrial facilities at taxpayer expense. They are meant to seed specific industries in specific places, creating new centers of gravity that will allow new regional economies to form.
Read the rest, I had not considered this aspect of it at all. And if this is the idea, it bodes even better for Houston’s economic future.