Brett Perlman, President and CEO of the Center for Houston’s Future, brings a wealth of experience from McKinsey and Texas's Public Utility Commission. He dives into the dynamics of the US hydrogen industry, explaining Houston's role in developing a clean hydrogen market. Discussions include the balance between blue and green hydrogen, the potential for hydrogen exports similar to natural gas, and the complexities surrounding hydrogen tax credits. Perlman also highlights the critical connection between hydrogen production and renewable energy for a sustainable future.
The U.S. hydrogen industry is being significantly shaped by recent legislative measures aimed at promoting green hydrogen and clarifying its definitions.
Houston's unique industrial infrastructure positions it as a pivotal player in the transition to clean hydrogen, balancing high emissions with decarbonization potential.
Deep dives
Strategic Focus on Hydrogen in the U.S.
The U.S. has positioned hydrogen as a key component in its energy transition strategy, particularly following the bipartisan infrastructure law and the Inflation Reduction Act. These legislative measures have spurred significant interest from energy companies in developing hydrogen technologies, especially green hydrogen, which is critical for meeting climate goals. However, clarifying what qualifies as green hydrogen has been a challenge, notably highlighted by the IRS's restrictive guidelines on tax credits that were released last year. The podcast emphasizes the evolving landscape of U.S. hydrogen production, with a particular focus on the progress and future of hydrogen hubs.
The U.S. Gulf Coast as a Hydrogen Hub
The Gulf Coast, and specifically Houston, is identified as a prime location for clean hydrogen production due to its existing hydrogen infrastructure and extensive industrial experience. Currently, the region produces about one-third of the nation's hydrogen primarily for refining and petrochemical use, which contributes significantly to greenhouse gas emissions. The area's established hydrogen pipeline network and storage capabilities position it well to transition into a clean hydrogen market. This dual role as both a high-emission source and a potential clean energy hub creates unique opportunities and challenges for decarbonization initiatives.
Building Competitive Hydrogen Markets
The podcast discusses the concept of hydrogen hubs as essential for establishing a competitive hydrogen market, necessitating proximity between supply and demand. A successful hydrogen hub requires a concerted effort to link existing industrial projects with innovative technologies to ensure scalability. In the Gulf Coast, a coalition formed to submit a bid for a hydrogen hub was selected, showcasing the area's synergy in developing a clean hydrogen ecosystem. This coordination reflects a bottom-up approach, contrasting with more centralized, top-down methods seen elsewhere, such as in California.
Innovative Applications and Future of Hydrogen
Hydrogen is depicted as versatile, serving traditional applications like refining and ammonia production while also paving the way for emerging markets in transportation and aviation. The podcast outlines existing plans to replace diesel trucks with hydrogen-powered alternatives and projects involving hydrogen-fueled aircraft, showcasing hydrogen's potential as a decarbonization tool across various sectors. Furthermore, discussions on hydrogen exports suggest that the Gulf Coast could lead globally in hydrogen supply, reflecting a historical shift similar to that experienced with natural gas. As the hydrogen market evolves, it faces challenges, including navigating tax credit regulations and developing necessary infrastructure.
In this episode of Energy Unplugged, we are delighted to welcome Brett Perlman, President and CEO of the Center for Houston’s Future. He joins our Head of US Central, Olivier Beaufils, to discuss the current state of the US hydrogen Industry.
For the past seven years, Brett has been running the Center for Houston’s Future, particularly being involved in the development of Houston’s hydrogen hub. With a distinguished career in the US energy sector, Brett’s experience spans from consulting at McKinsey & Company to serving as a Commissioner on the Public Utility Commission of Texas, where he led the restructuring of the state’s electric utility industry.
Key topics of discussion include:
What is a hydrogen hub, and what kind of supply is Houston focusing on—blue, green, or a mix of both?
Hydrogen exports
The impact of emerging hydrogen markets on the power system