https://financialpost.com/pmn/business-pmn/exxon-ceo-says-hydrogen-project-at-risk-without-ira-tax-credits
Exxon Mobil Corp. won’t move forward with one of the world’s largest, low-carbon hydrogen projects if the Biden administration withholds tax incentives for natural gas-fed facilities, Chief Executive Officer Darren Woods said during an interview.
(Bloomberg) — Exxon Mobil Corp. won’t move forward with one of the world’s largest, low-carbon hydrogen projects if the Biden administration withholds tax incentives for natural gas-fed facilities, Chief Executive Officer Darren Woods said during an interview.
Under the current guidelines, incentives are earmarked for projects that produce so-called “green” hydrogen by using water and renewable energy. But Exxon believes it can produce “blue” hydrogen from gas by trapping carbon emissions. As a result, the company asserts it proposed Houston-area facility ought to qualify for tax credits under the Inflation Reduction Act, Woods said at the CERAWeek by S&P Global conference on Monday.
Giving preference to “green” hydrogen over “blue” supplies would amount to a government attempt to favor certain technologies rather than simply focusing on cutting overall emissions, he added.
“If we find the regulation gets heavily influenced by the lobbying and what I would say is people trying to pick winners and losers then we won’t move forward with it,” Woods said. “That would violate one of the fundamental principles which is just to focus on reducing emissions and let the market and the companies figure out how best to do that.”
Last year, Exxon said it could have the Baytown, Texas, facility up and running by 2027 or 2028 with the right incentives and permitting. It would produce 1 billion cubic feet hydrogen per day and capture 98% of associated carbon, helping reduce the adjacent oil refinery’s emissions by as much as one-third.
“We’re investing billions of dollars to reduce the carbon intensity of our natural gas,” Woods said. “Why would the regulation not give companies doing that any credit? That will basically instantly stop investments to reduce carbon intensity by the industry as a whole.”