Corpus Christi port could emerge as hydrogen export hub in Gulf Coast's hydrogen economy

The group behind the Texas Gulf Coast's bid to become a hydrogen hub are hoping that the Corpus Christie port could become a strategic export hub for selling clean hydrogen to global markets, the Center for Houston's Future said in a May 9 conversation with S&P Global Commodity Insights.

A non-profit focused on promoting low carbon economic growth in the Gulf Coast region, the Center for Houston's Future is spearheading the regional effort to establish a Houston-area hydrogen hub and attract a portion of the $8 billion earmarked for hub funding in the Infrastructure Investment and Jobs Act passed last year.

The hub as presently envisioned does not exclusively pertain to Houston. Other industrial clusters along the Texas coast – like Corpus Christi and Beaumont – stand to play key roles in the regional hydrogen economy. It's the Center's job, CEO Brett Perlman said, "to connect dots for people they might not otherwise see."

The Port of Corpus Christi has emerged as a key piece to Center's hub strategy, which will eventually be shared with the Department of Energy in competitive process to win fedreral funding. With the increasing amount of hydrogen and carbon management assets being developed around Corpus – including a new partnership to transform the port into a carbon capture hub – the port has developed an export strategy that could be incorporated into the Gulf Coast's broader hydrogen economy.

"We've just been trying to put ourselves on the map – literally on the [International Renewable Energy Agency's] map," Perlman said. "Because when the IREA does these reports, they never have anything going to the Texas Gulf Coast as an export path."

"What's the willingness to pay in Germany today for green hydrogen? Or green ammonia? Or blue?" he said.

While Texas has the potential to produce hydrogen at relatively low production costs, more work needs to be done to determine how Texas-produced hydrogen can competitively enter European, Asian and even California markets.

"These prices that you see in California and in Europe are fundamental to getting the organic growth that you're talking about, because otherwise it's just not going to happen," said Alex Klaessig, senior director at S&P Global Commodity Insights. "Every market that I've seen, you put a price on the goal and you work towards it. I think that is going to be the nucleus of a low carbon intensive hydrogen product."

According to S&P Global, green hydrogen produced using PEM electrolysis (including capex) on the Gulf Coast cost $7.40/kg on May 6. Meanwhile, green hydrogen produced in Australia and Saudi Arabia – two exporting regions that would compete with Gulf Coast hydrogen in the global market – cost less. Western Australian green hydrogen prices were assessed at $3.64/kg and Qatar prices at $3.50/kg.

Hydrogen hub selection process

On March 21 the Department of Energy closed its second request for information related to the hydrogen hub selection process. The department reported receiving over 300 responses in a competitive field that will ultimately result in divvying up the infrastructure bill's $8 billion to at least four different hubs.

The bill requires the department to select at least one hub that uses fossil fuel as a feedstock, one hub that uses renewable energy as a feedstock and one hub that uses nuclear energy as a feedstock. It also requires each hub to focus on a different category of end-users – electric power generators, industrial users, the residential and commercial heating sector and transportation.

The department will initiate a request for proposals after a review of its 300-plus responses, wherein regional groups will submit applications for the funding. It's not yet known when the department will issue the RFP.

"We're trying to do as best we can without knowing the rules of the road to start to develop what we think are the things they're going to want," Perlman said.

The department also has an ongoing process related to a second hydrogen-related funding item within the infrastructure bill - $1 billion for a Clean Hydrogen Electrolysis Program, which seeks to advance clean hydrogen technologies like electrolyzers, fuel cells and storage.