Yahoo Finance Exxon Mobil seeks inclusion of natural gas-derived hydrogen in Biden's climate law subsidies
Exxon Mobil Corp (NYSE:XOM). is lobbying the Biden administration to include hydrogen produced from natural gas in the subsidies outlined in President Biden's climate law. The energy giant is targeting key decision makers, including Democratic lawmakers, U.S. Treasury Department officials, and think tanks, with the aim of securing billions of dollars in tax credits intended for reducing fossil fuel usage.
Exxon's CEO, Darren Woods, met with White House senior clean energy adviser John Podesta last week to personally advocate for their case. Exxon believes they can produce hydrogen from natural gas without releasing significant amounts of carbon dioxide, thereby creating a climate-friendly fuel on par with hydrogen produced from water and renewable energy. If successful, this could enable fossil fuel companies to gain billions in subsidies and become leading players in the hydrogen sector.
Despite these claims, environmentalists express concerns that hydrogen derived from natural gas may not be emission-free and could potentially encourage more fossil fuel production. This would contradict the original objectives of the tax credit system.
In response to these concerns, Exxon's vice president of public and government affairs, Matt Furman, maintains that their method of hydrogen production can achieve a sufficiently low level of emissions to qualify for top-tier subsidies. This claim is supported by government officials who conducted the modeling. The Treasury Department has stated its focus on ensuring this incentive promotes energy security and combats climate change.
Hydrogen is most commonly produced from natural gas through a process called steam-methane reforming, which releases carbon dioxide into the atmosphere and contributes to global warming. Exxon plans to capture these emissions and store them underground while ensuring the natural gas used for hydrogen production is "lower carbon intensity differentiated gas."
Currently, Exxon produces about 1.5 billion cubic feet of hydrogen per day and intends to establish the world's largest low-carbon hydrogen plant by 2027 or 2028. The company's lobbying efforts also target Secretary of Energy Jennifer Granholm, White House Climate Advisor Ali Zaidi, Senate Majority Leader Chuck Schumer, and Democratic Senator Joe Manchin.
Despite former CEO Lee Raymond's resistance to government subsidies for green projects, Exxon now argues that financial assistance is necessary for the development of new low-carbon technologies before market forces can sustain them.
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