Tax Credit Uncertainty Looms for Blue Hydrogen

With potentially billions of dollars at play, natural gas-known as a transition fuel to some and a destination fuel to others-finds itself stuck in the middle again. Its role in companies' ability to claim the 45V hydrogen production tax credit offered in the Inflation Reduction Act (IRA) is fu...

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Bibliographic Details
Published in:Oil & Gas Investor 2024-03, Vol.44 (3), p.72-73
Main Author: Addison, Velda
Format: Article
Language:English
Subjects:
Carbon sequestration
Electricity
Emission standards
Emissions
Energy
Enhanced oil recovery
Environmental protection
Fuels
Gas processing
Gas recovery
Gases
Green hydrogen
Hydrogen
Hydrogen production
Methane
Natural gas
Pollutants
Raw materials
Supply chains
Tax credits
Taxation
Uncertainty
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Summary:With potentially billions of dollars at play, natural gas-known as a transition fuel to some and a destination fuel to others-finds itself stuck in the middle again. Its role in companies' ability to claim the 45V hydrogen production tax credit offered in the Inflation Reduction Act (IRA) is fueling more uncertainty. That uncertainty, industry experts say, could give some producers of blue hydrogen (natural gas with carbon capture and storage) and their partners pause. "I think there are certainly some unanswered questions for blue hydrogen producers," Connor Thompson, legal scholar at the University of Houston Law Center, told Hart Energy. T he 45VH2-GREET 2003 assumes that methane leakage during the natural gas recovery process and subsequent gas processing and transmission is about 0.9% of methane consumed by the reformer. However, the U.S. Environmental Protection Agency (EPA) estimates leak rates across the natural gas supply chain at about 2%-3%.
ISSN:0744-5881