Post by : Badri Ariffin

Exxon Mobil has decided to pause its ambitious plan to establish one of the largest hydrogen production plants globally, attributing this decision to a lack of customer demand and prevailing economic uncertainty. Initially planned for the Baytown, Texas facility, the project is now indefinitely shelved after facing numerous delays.

Introduced in 2022, the facility aimed to produce one billion cubic feet of "blue hydrogen" daily. This hydrogen variant captures carbon dioxide during production and stores it underground, offering a cleaner but more costly solution compared to traditional hydrogen production.

CEO Darren Woods remarked that the elevated costs associated with blue hydrogen have made potential clients hesitant. He noted, "There has been a consistent challenge in securing committed customers willing to sign off-take contracts," emphasizing economic slowdowns and uncertainty in Europe as additional obstacles to demand.

The venture garnered investment from Exxon and partners such as the Abu Dhabi National Oil Company, with approximately $500 million already invested. Although total projected costs were anticipated to reach several billion dollars, the specific amount remains undisclosed.

Hydrogen is widely regarded as a crucial component in pursuing a more sustainable energy future, yet Exxon’s recent decision highlights the challenges traditional oil and gas companies encounter in shifting to low-carbon alternatives, especially when industry adoption falls short of technological expectations.

Woods mentioned that the project could potentially resume if demand picks up, although he did not specify a timeline for such a development. He maintains confidence in the long-term relevance of hydrogen and the strategic potential of the Baytown initiative.

#AI #Technology