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U.S. supermajor ExxonMobil is planning a hydrogen production plant and one of the world’s largest carbon capture and storage projects at its refining and petrochemical site at Baytown, Texas.
The proposed hydrogen facility would produce up to 1 billion cubic feet per day of blue hydrogen, which is an industry term for hydrogen produced from natural gas and supported by carbon capture and storage.
The carbon capture infrastructure for this project would have the capacity to transport and store up to 10 million metric tons of CO2 per year, more than doubling ExxonMobil’s current capacity.
“Hydrogen has the potential to significantly reduce CO2 emissions in vital sectors of the economy and create valuable, lower-emissions products that support modern life,” said Joe Blommaert, president of ExxonMobil Low Carbon Solutions. “By helping to activate new markets for hydrogen and carbon capture and storage, this project can play an important part in achieving America’s lower-emissions aspirations.”
Using hydrogen as a fuel at the Baytown olefins plant could reduce the integrated complex’s Scope 1 and 2 CO2 emissions by up to 30 percent, supporting ExxonMobil’s ambition to achieve net-zero greenhouse gas emissions from its operating assets by 2050. It also would enable the site to manufacture lower-emissions products for its customers. Access to surplus hydrogen and CO2 storage capacity would be made available to nearby industries.
The project would form ExxonMobil’s initial contribution to a broad, cross-industry effort to establish a Houston carbon capture and storage hub with an initial target of about 50 million metric tons of CO2 per year by 2030 and 100 million metric tons by 2040. Evaluation and planning for the Baytown project are ongoing and, subject to stakeholder support, regulatory permitting, and market conditions, a final investment decision is expected in two to three years.
ExxonMobil has extensive experience with hydrogen and already produces about 1.5 billion cubic feet per day. The company is uniquely positioned to participate in the growing hydrogen market and is evaluating strategic investments to increase the use of this important lower-emissions energy technology.
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Exxon also revealed plans to include annual structural reductions of $9 billion a year by 2023 compared to 2019, building on $5 billion annual structural reductions achieved to date.
“Full-year 2021 results of $23 billion in earnings and $48 billion in cash flow from operating activities were the highest among the competition and demonstrate how structural improvements, combined with focused investments during the downcycle, positioned the company to realize the full benefit of the economic recovery,” the company said.
The 2021 results enabled repayment of about $20 billion in debt – nearly all of the debt borrowed during the pandemic downturn, the 39th consecutive year of dividend increases, and a $10 billion share-repurchase program that started earlier this year.
The company expects capital investments of $21-$24 billion in 2022 and $20-$25 billion per year through 2027. Spending plans also include more than $15 billion over the next six years to reduce greenhouse gas emissions in company operations and for investments in lower-emission business opportunities to help customers reduce emissions and generate attractive returns for shareholders.
“We are focused on leading the industry in safety, reliability, environmental performance, earnings and cash flow growth – and ultimately shareholder returns. We’ll continue to innovate and provide solutions that meet the growing needs of society, including its net-zero emissions ambitions, by fully leveraging our competitive advantages of scale, integration, technology, functional excellence, and our highly skilled people,” said Darren Woods, chairman and CEO of Exxon.
“Investment in emission-reduction opportunities will accelerate with advances in technology, market incentives, and supportive policy. We’ve built a portfolio with the flexibility to adjust investments between our traditional oil, gas, and products business and new lower-emissions opportunities, consistent with the pace and scale of the energy transition, creating long-term value across a broad range of scenarios,” Woods added.
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