Remarks on Facilitating Clean Hydrogen Development with Natural Gas and Carbon Management

Thank you and good afternoon.

It is an honor to be here and to represent the United States and the Department of Energy at Africa Oil Week. We welcome this opportunity to discuss with you U.S.-African energy collaboration and how this collaboration can strengthen the sustainable development and use of the vast energy resources of our respective countries.

This is particularly important as we look at the development of clean hydrogen.

The United States has strong and long-standing relationships with countries across Africa. These relationships span many critical areas of cooperation—from economic advancement to energy development and security—and they aim to improve the quality of life for Africans and Americans alike to ensure a future of growth, prosperity, and opportunity.

And energy access is key to such a future for African countries.

Yesterday, I had the opportunity to meet with my African counterparts. We discussed many things, including the significant role that Africa plays, and will continue to play, as a key energy producer and exporter.

But we also talked about the imperative of energy access and the fact that African countries have the lowest rates of per capita energy consumption and greenhouse gas emissions—and that nearly 600 million people lack affordable, reliable, and sustainable electricity, and even more do not have safe and readily available cooking fuel.

As African countries build energy markets, infrastructure, and generation capacity to expand urgently needed energy access, hydrogen has the potential to help enable large-scale energy and industrial development on the continent in ways that are reliable, secure, and low and zero-carbon.

The versatility of hydrogen offers value across a wide range of economic sectors, and it provides a critical pathway to decarbonize industries that are hard to abate, like cement and steelmaking, agriculture, and transportation. As such, it offers African countries the opportunity to pursue clean energy and industrial production that leapfrogs more carbon-intensive paths to development undertaken in the industrialized world.

And for nations with significant fossil-energy resources, like many in Africa and the United States, there are many benefits to producing low-emission, clean hydrogen with carbon capture and then storing that captured CO₂ safely and permanently underground in appropriate geologic formations.

Thus, hydrocarbon-producing basins are attractive locations to simultaneously produce hydrogen from natural gas and store the resulting CO₂ geologically.

In this way, economies that still produce hydrocarbons can move toward a net-zero economy that ultimately places as much carbon underground as it emits.

And as you know, low-carbon hydrogen can be produced from a wide range of energy resources.

Technologies such as steam methane reforming, gasification, and pyrolysis enable the production of hydrogen from natural gas, coal, and biomass feedstocks, while managing the CO₂ emissions, which can be separated and stored geologically underground or converted into durable building materials or other products that prevent the CO₂ from later being emitted to the atmosphere.

Clean hydrogen can of course also be produced electrolytically from zero-emission resources like solar, wind, nuclear, and geothermal energy.

And the African continent, with its vast solar, wind, and hydro potential and abundant natural gas reserves, has the potential to become one of the world’s primary locations for clean hydrogen production, domestic use, and export.

I understand that there are at least ten clean hydrogen projects at various stages of development in Africa and that efforts are underway to add new renewable power capacity to potentially support hydrogen production.

Here in Africa, several countries—including South Africa, Namibia, Mauritania, and Egypt—have expressed their commitment to hydrogen production from renewables and have important projects in the works.

Nigeria, Algeria, Angola, and Mozambique, with their large gas reserves, could be good candidates for developing hydrogen with CO₂ capture and storage. 

In a few days, I will be visiting Mozambique, which has enormous gas fields under development and a floating liquefied natural gas facility that recently began to operate there.

When you think about the abundance of offshore gas between Mozambique and Madagascar that could potentially be dedicated to hydrogen production coupled with carbon management, it’s obvious that we are just scratching the surface in terms of hydrogen potential.

In the near term, natural gas provides the lowest-cost pathway to developing a clean hydrogen economy, but only if carbon capture and storage is deployed in concert with production. Africa’s natural gas sector offers a platform on which to build an integrated clean hydrogen economy of production, transport, storage, and domestic energy, as well as industrial and transport end uses.

The development of this clean hydrogen value chain with natural gas would help create economies of scale that also benefit development of hydrogen from renewables as the cost of electrolytic hydrogen comes down and production ramps up over time. 

Still, to unlock this hydrogen potential in both the U.S. and Africa, we have to address two challenges: lowering costs and building a strong commercialization pipeline.

So, I will focus for a moment on what we’re doing in the U.S. to meet these challenges.

Today, approximately 95 percent of hydrogen in the U.S. is produced from natural gas, and it is used principally in refining and fertilizer production. However, most of that hydrogen is still produced without carbon capture and storage.

That is why, in support of our nation’s broader climate goals, including achieving net-zero emissions economy-wide by 2050, the U.S. Department of Energy’s Office of Fossil Energy and Carbon Management has developed a Hydrogen with Carbon Management Program.

This program invests in research and development projects to produce, transport, store, and utilize carbon-based clean hydrogen, coupled with carbon capture and storage.

Fortunately, we already have valuable experience in this arena. For example, the Department of Energy partnered with Air Products to demonstrate the world’s first commercial-scale production of hydrogen from steam methane reforming of natural gas with carbon capture. For a decade, Air Products has successfully captured more than 90% of the CO₂—a million tons annually—from hydrogen production at a refinery in Port Arthur, Texas and safely and permanently stored that CO₂ in a nearby oil field.

Our Hydrogen with Carbon Management Program is building on this experience and will play an integral role in one of DOE’s Energy Earthshot Initiatives. The Hydrogen Shot, which seeks to reduce the cost of clean hydrogen by 80% to $1 per kilogram in one decade, is expected to develop new clean hydrogen technology pathways in the United States. 

We are pairing the Hydrogen Shot with a big push to develop additional commercial-scale demonstration and deployment projects.

The Department of Energy’s Loan Program Office has made two conditional project commitments:

• The first, a production and storage facility in Delta, Utah; and
• The second, a carbon black clean hydrogen and utilization project in Hallam, Nebraska.

In addition, our hydrogen efforts received a major boost with the Bipartisan Infrastructure Law passed by Congress and signed by President Biden last year. This legislation provides historic levels of funding for the Department of Energy, including $8 billion for the development of four or more regional clean hydrogen hubs. At least one of these regional hubs must feature hydrogen production from natural gas combined with carbon capture and storage.

At the same time, thanks to funding in the infrastructure bill, we will be building out regional carbon management infrastructure to achieve economies of scale in the transport and storage of large volumes of CO₂ captured from hydrogen production and other industrial and power generation facilities.

Our Office of Fossil Energy and Carbon Management is now working to ramp up an expansion of our existing CarbonSafe program to develop 20-40 large-scale regional geologic storage hubs across the country, each of which must store a minimum of 50 million tons of CO₂ over 30 years from multiple facilities and industries. And we expect that some of these regional geologic storage sites will each store hundreds of millions of tons of CO₂.

Just last week, we announced $2.25 billion in funding to support the development of these new and expanded large-scale, commercial carbon storage projects under our CarbonSafe program.

In parallel, the Department of Energy’s Loan Program Office is laying the groundwork for the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program—or CIFIA. This $2 billion dollar program will support a much greater amount of low-interest loans and grants to build out regional CO₂ pipelines and potentially rail, barge, and ship transport of CO₂.

On top of all of this, the Inflation Reduction Act that President Biden just signed this August includes major improvements to the U.S. federal 45Q tax credit that will incentivize private capital investment in carbon capture from industry, including for hydrogen production.

This legislation also provides companies with the option of claiming a robust new clean hydrogen tax credit of up to $3 per kilogram that can be used for production of electrolytic hydrogen from renewable and nuclear power or from fossil fuels and biomass feedstocks with carbon capture and storage.

Taken together, the Bipartisan Infrastructure law provides the U.S. Department of Energy with tens of billions of dollars to support clean hydrogen and other demonstration projects and infrastructure, and the Inflation Reduction Act makes available a comprehensive package of several hundred billion dollars in clean energy and industrial tax credits over ten years to incentivize private sector investment in those projects.

This legislation represents the most significant U.S. commitments to climate action to date. By enabling widespread commercial deployment of hydrogen and other clean energy and industrial technologies and infrastructure, this funding and financial incentives will help spur innovation and bring down the costs of critical technologies, not only for the U.S. but also for countries in Africa and around the world, much as we have seen with wind and solar.

So, with this progress on policy in the U.S. and other countries to support broader innovation and deployment, a clean hydrogen economy becomes a realistic aspiration for the U.S. and African countries, as our countries have energy resources that provide a comparative advantage in clean hydrogen production.

Toward that end, we welcome the opportunity to share our lessons and experiences and to learn from yours.

We also want to connect the U.S. and African private-sector investment communities to support energy development, access, and security.

At the end of the day, we believe our efforts will go much further, faster, if we align them together.

That’s why we are honored to be an active participant in multiple international hydrogen initiatives, several of which involve the participation of our African partners.

Some that come to mind are:

• The International Partnership for Hydrogen and Fuel Cells in the Economy,
• The Clean Energy Ministerial Hydrogen Initiative, and
• Mission Innovation’s Clean Hydrogen and Zero-Emissions Shipping Missions.

Each of these initiatives offers distinct advantages. And if we coordinate across them, we can drive much greater collective progress.

In conclusion, my message today is that the Department of Energy and the Biden administration are eager to identify more opportunities to work together with African governments and private sector partners to build a future clean hydrogen economy.

Thank you.