H2OUSTON: an old-school energy nexus leans into the chase for Net Zero

In Texas, Partners in Performance has released a comprehensive report on the future of hydrogen and, given the deep involvement of The Center for Houston’s Future, one should not keel over in surprise that “Houston holds strategic advantages for becoming a global hydrogen energy hub – specifically for manufacturing equipment key to future hydrogen production and distribution infrastructure in the United States and worldwide.”

The report is “Houston’s Future as a Global Center for Clean Hydrogen Manufacturing, Recycling, and Electrolysis” and it’s available in its full glory here:. If you’d like the Cliff Notes version first, read on.

The findings

The report concludes that establishing a global hydrogen energy hub to create hydrogen electrolyzers, storage, and delivery infrastructure is a massive economic opportunity for Houston. They could have mentioned any of a dozen centers around he world that have energy professionals, a pro-business ethic, access to capital and are proximate to hydrogen customers.  Plenty of ports come to mind — Rotterdam, Amsterdam, Teesside, the whole of the US Gulf Coast, the Puget Sound, several locations in Australia, not to mention the Ruhr, Sarnia-bambton, Thailand, and Pune. China is a little murky at the moment, but there’s opportunity there too. 

The study found other heavy manufacturing areas as desirable locations for conversion to hydrogen electrolyzing, engineering, and construction. Converting existing manufacturing facilities is preferable to greenfield (new) construction. Additionally, these mothballed facilities often come with tax incentives to reopen and reinvigorate local economies with jobs, making them even more appealing.

The Market

Manufacturing of hydrogen as an energy source is expected to increase almost 200x from today’s levels by 2050, and the U.S. is projected to exceed 100 Megatons per year, approximately 20% of the global market.

The US has set a goal of achieving or exceeding the clean hydrogen production cost targets for electrolyzers to less than $US 2 / kg H2 by 2026 and the USDOE has established the Hydrogen ShotTM goal of $US 1 / kg H2 of clean hydrogen in one decade. 

The Tech Approach

Implicit in this report is the pre-eminence of electrolyzers — that is, water-splitting. Not too much on other routes to hydrogen, such as methane, for one. In fact, the report seems to skip over the idea that methane and ammonia have more hydrogen in them than water does, as does renewable DME. 

Why Houston?

 The Partners in Performance study found that Houston has three critical advantages. 

·      The city is already a center for industrial manufacturing – the infrastructure exists,  and it can be repurposed.

·      Abundant warehouse, land and logistics support make Houston an attractive area to which innovators and newcomers can move operations.

·      Plentiful access to highly skilled labor pool. The existing oil & gas workforce in the area that can be easily reskilled to work in clean hydrogen exceeds, by some accounts, 175,000 persons.

First steps for Houston or anywhere else chasing the net zero zillions

The first steps in Houston’s path toward its hydrogen future involve electrolyzer manufacturing, an industry that is already well underway in the area. We’d point to proximity to a natural gas pipeline system as another obvious option. Or ammonia or LPG shipping infrastructure.  We’d also point to the report’s finding that reaching the world’s green hydrogen targets with (today’s) electrolyzers alone would consume 4X the world’s supply of iridium.

Is it Washington-on-the-San Jacinto, or Houston-on-the-Potomac?

Anyway you describe it, Washington thinks it needs Houston and Houston thinks it needs Washington, on this one. Slightly different viewpoint on, er, immigration and other topics. E Pluribus Hydrogen.

And, it’s not just a hypothetical “better together”. Before the Inflation Reduction Act there was the Infrastructure Investment and Jobs Act of 2021, and the IIJA provided lots of hydrogen goodies:

• Regional clean hydrogen hubs ($US 8 billion) 

• Hydrogen manufacturing and recycling initiative ($US 500 million) 

• Clean Hydrogen electrolysis program ($US 1 billion) – of primary interest to this report 

The Tech Development Pathway

The Department of Energy has been collecting input as exemplified by a recent request for information on Clean Hydrogen Manufacturing, Recycling, and Electrolysis. This seeks input on practical and innovative approaches to increase the reuse and recycling of clean hydrogen technologies by: 

• Increasing the efficiency and cost-effectiveness of raw material recovery from clean hydrogen technology components and systems, including enabling technologies such as electrolyzers and fuel cells. 

• Minimizing environmental impacts from recovery and disposal processes. 

• Addressing any barriers to research, development, demonstration, and commercialization of technologies and processes for the disassembly and recycling of devices used in the clean hydrogen value chain. 

• Developing alternative materials, designs, manufacturing processes and other aspects of clean hydrogen technologies. 

• Developing alternative disassembly and resource recovery processes enabling efficient, cost-effective, and environmentally responsible disassembly of, and resource recovery from, clean hydrogen technologies. 

• Developing strategies to increase consumer acceptance of, and participation in, the recycling of fuel cells. 

Reaction from the stakeholders

We are pleased and delighted to report that Houston is pleased and delighted.

“Houston is a preeminent global center for the energy industry, from exploration & production to finance to infrastructure,” said Brett Perlman, CEO at Center for Houston’s Future. “As the world demands a move to clean, renewable energy sources, it is essential that we transition Houston’s commercial and industrial base to producing and delivering the green hydrogen energy that will be as vital a part of our energy future as fossil fuels are today.”

“Houston is well-suited to become a U.S. hydrogen leader because its status in the world energy community is based on its ability to supply equipment and planning to best utilize resources regionally, nationally, and globally,” said Roy Hunt, principal in Energy Transition at Partners in Performance.

“Partners in Performance is proud of our work supporting the Center for Houston’s Future in their foundational role in the Hydrogen Economy,” said Chris Millican, director. “We have moved from curious to convinced that Greater Houston is uniquely positioned to be a pathfinder for companies scaling up production within the electrolyzer manufacturing and hydrogen supply value chain. The report indicates that the Greater Houston area has a head-start and strengths in the H2 market that will allow existing and new companies to break through challenges and establish a growth base for this new energy opportunity.”