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Oil and gas lobby calls H2 'core competency,' hails 45v

  • : Hydrogen, Natural gas
  • 25/04/10

The oil and gas industry views hydrogen production as a "core competency" and sees 45v tax credits driving US exports and innovation, according to the American Petroleum Institute (API).

"We really see this, especially from the oil and gas perspective, as a core competency," said Rachel Fox, API director of policy and strategy, on a webinar Thursday hosted by ConservAmerica.

"We have such an advantageous opportunity with this credit," said Fox. "When we're talking about the export opportunity, we really do hold the cards in terms of producing hydrogen at the lowest cost anywhere in the world."

The 45V incentive has become a crucible in President Donald Trump's agenda to promote fossil fuels. A broad-based coalition of groups sometimes at odds with one another has coalesced in favor of 45V noting that it promotes manufacturing jobs across rural America and sets up US energy companies to dominate growing global demand for cleaner burning fuels. Nonetheless, ConservAmerica described such energy tax incentives as being "squarely in the crosshairs" as legislators gear up for budget negotiations in which the administration is looking to slash government spending to offset a promised corporate tax cut.

By tying a tiered scale of incentives to carbon intensity, 45V has spurred oil and gas companies to develop technologies and practices that curb emissions, said Fox.

"There's a lot of incentive to try to hit that $3 mark by getting your hydrogen produced at a really low carbon-intensity limit and so it's galvanized a ton of innovation and a ton of new ideas on how that can be done throughout the natural gas system," said Fox. Most of those ideas revolve around lowering the methane intensity of natural gas production or sourcing low-methane intensity natural gas, such as from biowaste, said Fox.

Some environmental advocates are skeptical that emissions from natural-gas based hydrogen production can be driven low enough to qualify for the highest $3/kg tier with existing technology and that most oil and gas companies will instead have to use less lucrative 45Q credits that apply to carbon capture and storage technology (CCS). However, at least one major energy company, ExxonMobil, has said it is seeking 45V to advance its massive natural-gas based hydrogen and ammonia project in Baytown, Texas.


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