Green Hydrogen Sails Under Anti-ESG Radar In Texas
Public officials in Texas have been revving the anti-ESG movement into high gear, in an effort to protect fossil energy stakeholders. However, the seeds of failure are already written on the wind. That means literal wind. Among other renewable energy assets, Texas has an ample supply of wind energy to spur a homegrown green hydrogen industry, helping to push coal, gas, and oil out of the picture.
Who’s Afraid Of The ESG?
ESG stands for the environmental, social, and governance goals that are becoming familiar practice among leading corporations in the US and elsewhere. Though the potential for greenwashing (and social-washing) exists, ESG principles are intended to help businesses quantify the bottom line benefits of long term sustainability goals as well as best practices for employee recruitment and community relations.
ESG principles can also motivate businesses to coalesce around public policies that support renewable energy and other new clean technologies. As part of the pushback, the anti-ESG movement claims that banks and other financial firms pose a threat to public pension plans when they focus on decarbonization.
Green Hydrogen Revolution Brewing In Texas
Officials in two dozen states have been actively promoting anti-ESG policies, either through investigations or lawsuits brought (or threatened) by their attorneys general, or through new laws aimed at preventing the flow of investor dollars into clean technologies. The funny thing is that officials in many of those same states have also been pushing to attract new clean tech businesses to their borders.
Texas is only one such example, but it is a big one. State Attorney General Ken Paxton is participating in a multi-state lawsuit aimed at thwarting ESG investment, and in 2021 Governor Gregg Abbott authorized a new law that specifically protects fossil energy industries from competition.
Meanwhile, though, Abbott is among those cheering the arrival of a new, $4 billion green hydrogen operation under the wing of the companies Air Products and AES Corporation, to be located on the site of a former coal power plant in Wilbarger County.
Billed as the biggest green hydrogen facility in the US, the project is expected to push $500 million into the state’s economy over its lifetime.
“This project will not only bring hundreds of jobs and millions in revenue to the Lone Star State, but will also expand our state’s robust energy sector and further solidify Texas as a global powerhouse in this critical industry,” Abbott enthused in a press statement last December.
The Governor’s office further notes that the project will “broaden Texas’ energy portfolio and will position our state as the country’s leader in green hydrogen while helping to reduce emissions,” which is the long way around to saying that green hydrogen — meaning hydrogen produced from water with the help of electricity from renewable energy — will help push petroleum fuels out of the transportation market.
“The facility is targeted to begin commercial operations in 2027 and will primarily serve mobility and other industrial markets,” is how the Governor’s office puts it.
Why Texas Hearts Green Hydrogen
Don’t just take Abbott’s word for it. In March, Glen Hamer, CEO of the Texas Association of Business, penned an op-ed for the Rio Grande Guardian in which he credited Abbott and other state officials for setting up Texas as a national green hydrogen leader.
“This is the best possible outcome for the people of Texas and our state’s economy, because when businesses choose Texas, everyone wins,” Hamer wrote.
“The burgeoning green hydrogen industry is increasingly focused on clean mobility applications, including trucking, as well as other industrial markets,” Hamer explained. “Demand is increasing in these legacy Texas industries for solutions that help ensure compliance with federal regulations fast-tracking decarbonization without sacrificing reliability, affordability, or output.”
“Now, thanks to this new proposed facility, Texas businesses are able to find a solution right in their own backyard,” he emphasized.
Hamer also mentioned something about needing the right “tax and regulatory model” to help propel the green hydrogen industry in Texas. That’s probably a veiled pitch for supporting the stacked tax incentives outlined in the federal Inflation Reduction Act of 2022. Our friends over at S&P Global are among those noting that the IRA provides enough support to push green hydrogen over the cost-competitive bar.
Whatever Happened To The Epicenter Of The Global Fossil Fuel Industry?
The enthusiasm for green hydrogen in Texas may seem off-kilter, given the state’s reputation as an epicenter of the global fossil energy industry. However, the state’s innovator-friendly regulatory environment did enable Texas to leap into the forefront of the US wind industry in the early 2000’s, thanks in part to the massive new CREZ transmission project, commissioned in 2013.
The state’s solar industry is also beginning to stir into life, including rooftop solar as well as utility scale solar power plants.
The Air Products/AES green hydrogen hub in will reportedly deploy both wind and solar power, and there could be plenty more in store. In January of 2021, while the dust was still settling over the failed insurrection at the US Capitol, energy stakeholders were already laying plans for a multi-input green hydrogen network in Texas. In addition to electrolysis systems running on wind and solar power, the network would include landfill biogas, from which hydrogen could be extracted through a conventional steam reformation process.
If all goes according to plan, an additional non-fossil hydrogen system could also be part of the picture. Last week, the hydrogen startup Utility Global announced that it is expanding its footprint in Texas. The company deploys a solid oxide system to extract hydrogen from industrial waste gases.
In that context, it’s worth noting that hydrogen is ubiquitous throughout modern industrialized economies. The primary source of hydrogen today is natural gas, with coal playing a significant but lesser role.
Hydrogen fuel cell cars have not gained much traction in the US, but fuel is only one use case. Whether it’s green hydrogen from electrolysis, or hydrogen recovered from waste gas, non-fossil hydrogen will both help cut the carbon footprint of fertilizer production as well as pharmaceuticals, food processing and personal care items among other industries.
Another emerging market for non-fossil hydrogen is the electrofuels industry, which deploys hydrogen and captured carbon to produce synthetic liquid fuels and other industrial chemicals. Texas is already beginning to attract e-fuels startups.
If Texas officials are serious about grabbing the lead on green hydrogen production in the US, they better act fast. Other states are competing for a share of the Energy Department’s $8 billion hydrogen hub program, including a massive multi-state hydrogen initiative combining the transportation and renewable energy resources of New York, New Jersey, Connecticut, Massachusetts, Maine and Rhode Island.
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Photo: Green hydrogen facility courtesy of AES.
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