The ExxonMobil carbon capture announcement has stolen some of the thunder from the weekly ESG and Climate piece we have lined up for tomorrow, where we focus on what is ideal versus what is “good enough”. While CCS allows the fossil fuel industry to keep operating for longer, and in pockets possibly permanently, the ideas that we should move straight to renewable power and hydrogen are extremely naïve in their expectations around timing. We fully agree with ExxonMobil that CCS is the most logical and fastest way to make a meaningful dent in carbon emissions, especially in the US, quickly. This has been a consistent message in our work, and you can read more about it tomorrow.
We note the Air Liquide announcements of its ESG objectives this week. Industrial gas companies have some of the greatest challenges and some of the greatest opportunities when it comes to clean energy and emission. As the largest producers of hydrogen (from natural gas) they have very large carbon footprints and these are made worse by the power consumption required to run their many air separation units to make oxygen and nitrogen. At the same time, they are the most logical producers of blue hydrogen – using CCS, but most of their existing hydrogen capacity is tied up under long-term contracts with refineries and chemical producers. Making blue hydrogen through capturing the CO2 would only make sense where the primary customer wanted it, or where there was enough slack in the system to free up blue hydrogen to make blue ammonia or to use directly for power generation or transport. Like Linde and Air Products, Air Liquide operates hydrogen grids where there are several consumers in relative proximity – these would seem the most logical places to find meaningful blue hydrogen opportunities and the US Gulf is a more obvious location.