Annual hydrogen capacity in the US is approximately 3.5 billion cubic feet per year (Bcf/yr), 68% of which is used in petroleum processing, according to the US Department of Energy (DOE). The Covid-19 pandemic is having a detrimental impact on the refinery hydrogen business as mitigation efforts have significantly reduced mobility, reducing demand on petroleum products. The merchant hydrogen business is fairing better as the applications are more diversified and hydrogen should remain a solid growth platform for the industrial gas industry in the longer term.
Industrial gas companies supply large quantities of hydrogen through their on-site pipeline (OSP) business that are used by oil and gas refineries, basic and specialty chemical manufacturers, and food processors. The greatest demand for hydrogen in the US is in the petroleum sector, where low sulfur fuels are mandated in response to stricter environmental regulations for clean air. Industrial gas companies work with refiners to improve value through managing their energy systems so that they are more efficient and meet government regulations.
Also driving growth for industrial gas companies are sale of gas (SOG) deals and acquisitions/replacement of aging steam methane reformers (SMRs) which are highlighted later in this article. Natural gas is the main methane source for hydrogen production by industrial facilities and petroleum refineries. Landfill gas/biogas is a source of hydrogen for several fuel cell power plants in the US. Biofuels and petroleum fuels are also potential methane sources.
... to continue reading you must be subscribed
