The Gulf Coast is leading the way in clean hydrogen production, making it a natural fit for this emerging industry. Currently, the Gulf Coast produces 3.5 million tons of hydrogen each year, accounting for a third of all hydrogen in the United States. This area, known for its strong oil and gas presence, has the largest hydrogen pipeline network in the country, spanning over a thousand miles, and is home to three of the world’s six salt storage caverns.

Houston: A Hub for Renewable Energy

Around Houston, Texas, you’ll find the largest renewable energy market in the country, with 36 GW of wind power and 15 GW of solar power, both expected to grow significantly. This region also boasts a highly skilled energy workforce and about 2.4 billion tons of CO2 storage capacity. Major ports like the Port of Corpus Christi and the Port of Houston, along with top refineries, further solidify its status as an energy hub.

Bright Future for Clean Hydrogen

Experts believe that if a large-scale hydrogen industry develops, Houston will be at its heart. Clean hydrogen demand in Texas could reach 21 million tons a year, according to a study by McKinsey titled “Unlocking Clean Hydrogen in the US Gulf Coast: The Here and Now.” The study also indicates that 30-60% of planned clean hydrogen projects will be in disadvantaged communities, potentially creating around 180,000 jobs and adding about $100 billion to the GDP by 2050.

Government Support and Initiatives

The Gulf Coast HyVelocity Hub is set to be one of the largest regional hydrogen hubs in the US, part of the Regional Clean Hydrogen Hubs Program (H2Hubs). This project will receive up to $1.2 billion from the Infrastructure Investment and Jobs Act (IIJA). The Inflation Reduction Act will also provide significant tax benefits for hydrogen production, carbon sequestration, and renewable energy generation once federal authorities define “clean hydrogen” later this year.

Seven major sponsors (AES, Air Liquide, Chevron, ExxonMobil, Mitsubishi Power, Orsted, and Sempra Infrastructure) are backing nine projects in four key areas: ammonia, petrochemical and refining, ground transportation, and power and utilities. The hub is in the planning stages and is expected to start operating by the mid-to-late 2030s. Community engagement will be crucial to ensure the hub meets local needs and provides jobs and economic opportunities.

Industry Ready to Move Forward

Offshore Wind Power Systems of Texas (OWPST), a company based in Dallas, is prepared to move ahead with hydrogen production without relying solely on government support. They plan to produce about 1,000 tons of hydrogen per day within 60 months of receiving an order. This timeline includes 24 to 30 months just to order the necessary equipment.

Political Challenges

Political challenges pose a significant hurdle for the clean hydrogen industry. President Joe Biden has heavily supported environmentally friendly projects through funding bills like the Inflation Act and the IIJA. However, there are concerns that these projects could be overturned if political leadership changes, particularly if Donald Trump wins the next election. Local resistance is already visible, with the Texas Land Commissioner delaying offshore wind projects along the Gulf Coast, criticizing federal green policies.

Conclusion

The US Gulf Coast is well-positioned to become a leader in clean hydrogen production, thanks to its existing infrastructure, skilled workforce, and supportive government initiatives. Despite political challenges, the potential economic and environmental benefits make this region a key player in the future of clean energy.

Shares: