Hydrogen Economy

All Change In 2024 – Does Primacy Matter – It Does If You Are ExxonMobil and Gulf Coast Sequestration
January 3, 2024
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Next Week:

All Change In 2024 – Does Primacy Matter – It Does If You Are ExxonMobil and Gulf Coast Sequestration

  • Weekly Theme: Blue Is The Color – LA Winning
  • Next Week: E-Fuels – Not Yet

Key Points

  • The year-end announcement that the EPA and the Biden Administration is granting primacy for CCS Class 6 well permits to Louisiana is a game changer for blue hydrogen and good news for Texas.
  • The EPA is capacity and expertise-constrained, and granting primacy should put more eyes on the permitting process and speed things up, eventually. This should drive blue hydrogen investment.
  • With its 2023 purchase of Denbury, ExxonMobil has a comprehensive network of CO2 pipelines, much in Louisiana – this puts ExxonMobil in a position to influence investment, its own and others
  • US blue hydrogen, with efficient CCS, should be the lowest cost low carbon hydrogen in the World, by a wide margin because of 45Q. It may not qualify for 45V, but it should not need to.
  • While there are many blue hydrogen and blue ammonia plans for the US Gulf Coast today, there would be room for many more if the ammonia/methanol fuels markets develop the way we expect.

Exhibit 1: We have used both this chart and exhibit 2 before (and quite recently) but they are most relevant.

Source: Capital IQ and C-MACC Analysis

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