According to Ed Graham, VP of new assets with ExxonMobil, the energy giant is focusing on several areas of decarbonization to achieve its goal of net zero emissions in the coming years.
“But our main focus right now is carbon capture storage (CCS), hydrogen and also biofuels. In the low-carbon hydrogen space, we are playing in all the spaces,” Graham said.
As one of the globe’s largest consumers of existing hydrogen, ExxonMobil has “incentives to decarbonize that whole process, which is using hydrogen as a process, not as a fuel,” Graham said.
The company, he said, is currently engaged in a large-scale project in Canada, “working with our products where we are buying blue hydrogen as part of our renewable diesel project — roughly 20,000 barrels a day.” ExxonMobil also has a large blue hydrogen facility “that we are proceeding with in Baytown, Texas, with the goal to fuel switch inside our existing facility, as well as to sell hydrogen,” he said. “And in Louisiana, we are helping CF Industries to decarbonize one of their hydrogen facilities to make blue ammonia.”
ExxonMobil’s partnership with CF Industries aims to capture and permanently store as much as 2 million metric tons of CO2 emissions annually.
“We are in all spaces of the hydrogen business, and we are helping others develop low-carbon hydrogen as well,” Graham said.
Graham said that to effectively decarbonize its operations, virtually replacing its old systems, the industry must be prepared to meet significant infrastructure demands.
“We need to replace that entirely, so I think we’ve got to find ways to decarbonize the existing systems as much as we can,” Graham said. “Probably, decarbonizing it partially is going to be easier. If you’re going with blue hydrogen and post-combustion capture, that’s more difficult than a high-concentration carbon dioxide stream that you see coming out ... on the process side. So partial decarbonization is more economical, as a first step.”
Another consideration with decarbonization is determining whether low-carbon hydrogen projects are short-term investments by nature, or if they are long term asset plays that can be durable over 20 or 30 years as new green hydrogen.
Graham said he believes those projects will be long term, “at least in the industrial sector, as we’re attempting these.”
“In the petrochemical industry, for example, large investments that go on for years and years and appreciate not over tens of years but literally fifties of years,” he explained. “The hydrogen that’s going to be utilized to fuel
switch and provide the energy into those facilities will need to, essentially, coincide. I think they’re going to be long-term investments, in the industrial sector, at least.”
Graham noted that blue hydrogen utilizing low-cost feedstock, “where the natural gas and sequestration reach nearby capacity” clearly makes blue hydrogen a promising investment project.
“Blue hydrogen is clearly the winner, near term, on cost and on scale,” he said, speaking as a panelist at the Hydrogen North America conference, held in Houston.
“There are many places in the world where those combinations don’t play out well, and in those cases transporting hydrogen in some form does present an opportunity, but it’s more expensive and it’s going to take longer to build out,” Graham said.
Regarding the industry’s collective efforts in the U.S. to reduce overall CO2 emissions, Graham said he believes it would be beneficial for renewables to focus on “decarbonizing the electric grid today, and removing fossil fuels, coal and others from that system.”
Hydrogen, he said, would then follow with a greater emphasis on blue hydrogen, initially.
“As the renewables sector gets further built out, then we’re aligned for a much larger scale for green [hydrogen], which we do need to make progress on in order to progress the technology,” he stressed.
That said, Graham added that the industry would be unwise to underestimate the challenge it has with respect to the infrastructure.
“Wherever we can find creative solutions to utilize whatever already exists today to help speed up the transition, we should,” he concluded.