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Blue hydrogen, now or never
The bipartisan, multi-billion dollar US government infrastructure bill has thrust blue hydrogen into the spotlight. But with $8 billion earmarked for the development of four regional hydrogen hubs in the United States, critics question whether blue hydrogen is “clean enough” for the energy transition. In a series of articles for S&P Global Market Intelligence, energy journalist Siri Hedreen looked at the role blue hydrogen will play in the nation’s market.
Hydrogen is a colorless, clean fuel that many consider essential for both the energy transition and energy security. For the uninitiated, the color designations of hydrogen can be confusing. Blue hydrogen is defined by the US Department of Energy as hydrogen produced from natural gas in which 96% of the CO2 produced is subject to carbon capture and sequestered underground. Green hydrogen is produced from water using clean energy, brown hydrogen is produced from coal, pink hydrogen is produced from water using nuclear energy, and gray hydrogen is produced from natural gas without carbon capture or sequestration.
To ensure bipartisan support, the US Infrastructure Act requires the Department of Energy to fund at least one green, pink, and blue hydrogen hub. The current administration is committed to funding both blue hydrogen and green hydrogen. Because of the importance of hydrogen development to its energy goals, it has maintained a technology-neutral stance in funding hydrogen development, focusing on carbon production rather than feedstock.
According to S&P Global Market Intelligence, one of the challenges with blue hydrogen is that its production process was developed in a laboratory environment, not on an industrial scale.
“It’s not new technology, but it’s never been deployed at the scale we’re talking about, so there’s a technology risk,” said Mike Hopkins, CEO of hydrogen hub developer Bakken Energy LLC. , which has partnered to develop a blue hydrogen hub in North Dakota. “I think any engineer would tell you that’s a small risk. And that’s the view of our shareholders, our financiers.”
The other challenge is that the price of natural gas, the feedstock for the blue hydrogen process, has risen dramatically since the Russian invasion of Ukraine. Some market participants believe that this price increase, combined with residual carbon and methane pollution from natural gas extraction, will make blue hydrogen production facilities “stranded assets” in the transition. energy.
Despite these challenges, many countries are pursuing the production of blue hydrogen. Japan is teaming up with the United Arab Emirates on a project to import blue hydrogen in the form of methylcyclohexane, while South Korea plans to build a blue hydrogen plant that will use methane gas produced by the diesel-powered steam cracker. country naphtha.
Despite questions about the practicality and sustainability of blue hydrogen, market players are seeing significant demand, demand that at this point far exceeds supply.
Today is Thursday, August 4, 2022and here is today’s essential intelligence.
Written by Nathan Hunt.
Global growth hit two-year low in July as developed world shrinks, but price pressures ease
Global economic growth slowed in July, according to the latest data from the PMI survey, led by the developed world contracting for the first time in two years. The United States and the Eurozone recorded further declines in output and the pace of expansion slowed in the United Kingdom and Japan, although growth in major emerging markets generally remained resilient. Global manufacturing output growth has stagnated and the recent surge in service sector activity has lost much of its momentum.
—Read the article by S&P Global Market Intelligence
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Listen: Street Talk | Episode 97: Recession Fears Still Keep Bank Investors Away
Big banks’ second-quarter results likely helped ease recession fears, but many investors will sit on the sidelines until it’s clear that a serious recession isn’t on the horizon, according to Gerard Cassidy. In the episode, Cassidy, managing director and head of U.S. bank equity strategy at RBC Capital Markets, discussed second-quarter bank results, how institutional deposits are responding to rate hikes in the Federal Reserve and what the results suggest about the health of the US economy.
—Listen and subscribe to Street Talk, a podcast by S&P Global Market Intelligence
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Feature: U.S. spring wheat production in 2022-23 has reached exceptional levels with higher yields
The increase in spring wheat plantings in the United States surprised markets, which had been expecting bumper production due to a jump in yields. The development, similar to China’s, comes at a time when global wheat markets are experiencing low supplies. The United States plays a central role in the world’s wheat supply as the world’s fourth-largest producer, exporting 11% of the world’s wheat trade, according to the Department of Agriculture.
—Read the article by S&P Global Commodities Outlook
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Listen: Beyond the Buzz – Storm Clouds or Clear Skies Ahead
In this episode, host Mike Ferguson is joined by S&P Global Ratings analyst Nora Wittstruck, Senior Director and Head of ESG US Public Finance. They discuss Nora’s latest commentary on the impact on U.S. local government credit ratings from skyrocketing property and casualty insurance premiums due to physical climate risks.
—Listen and subscribe to Beyond the Buzz, a podcast by S&P Global Ratings
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Energy and raw materials
European energy majors brace for more oil and gas spending after supply crisis
Embattled European energy majors brace for increased investment in oil and gas amid intense regional concerns over energy security, falling production metrics, triple-digit oil prices and profits sharply. Reporting another round of bumper quarterly profits on the back of record refining prices and margins, energy majors are being called upon to both accelerate their shift to clean energy while reinvigorating oil spending and in gas to help fill the hole left by sanctioned flows from Russia.
—Read the article by S&P Global Commodities Outlook
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Technology and media
May 2022 Tesla Brand Loyalty More Than Doubles Year Over Year, Surpasses All Industry Brands
Tesla’s May 2022 brand loyalty of 63% is outstanding from almost every perspective: it’s more than double its May 2021 loyalty of 29.4%; This is the highest brand loyalty, not only of any luxury brand, but any brand in the industry in May; that’s 12.3 PP above luxury runner-up Lincoln; it’s one of only two positive year-over-year results among the 20 luxury brands (along with Lincoln); This is the ninth consecutive monthly loyalty to Tesla above 60%; finally, it is the only brand to cross the 60% brand loyalty threshold in the out-of-stock periods 2021 or May CYTD 2022.
—Read the article by S&P Global Mobility
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