GPA Midstream Convention: Energy transition will take decades

A transition from hydrocarbons for energy went from the backburner to full-throttle this year with an emphasis on capturing hydrogen, especially from existing sources, said Tom Seng, director of the School of Energy, Economics, Policy and Commerce at the University of Tulsa.

Seng presented “Pros and Cons of the Energy Transition” at the GPA Midstream Association’s annual conference in San Antonio.

For the effort to build more hydrogen hubs in the U.S. and Europe “2022 is going to be a critical year,” said Seng, who also serves as the Mervin Bovaird Professor of Energy Business at the University.

Shell is building the world’s largest hydrogen electrolyzer at the port of Rotterdam, which at 200MW is ten times the size of the Dutch company’s plant in China and 20 times that of one in Germany. When the Rotterdam plant comes online in 2025, it will produce 60,000 kilograms of hydrogen daily.

The U.S. federal government has earmarked $369 billion for energy security and climate change investment including $8 billion to develop hydrogen hubs. Those hubs, Seng said, will be built near existing sources of hydrogen.

For example, fertilizer manufacturing plants in the Arkansas, Louisiana and Oklahoma region would be tasked with keeping the hydrogen from methane produced in the process. Most hydrogen now comes from natural gas sources and hubs also could emerge around existing natural gas centers.

Oil and gas companies have a role to play as well, including using existing rights of way for transmission lines to include hydrogen pipelines. What’s more, there will be an increased demand for power of all types to run the electrolyzers.

While this is a critical year for energy transition into the future, “the transition to hydrogen as the main source of heat energy will be decades long.” Likewise, transition to electric vehicles and home solar will remain a slow transition without ongoing tax incentives, he said.