Chevron, Mitsubishi and Shell Canada sign deals to increase hydrogen use

US oil major Chevron signed two new deals to increase its footprint in hydrogen transportation fuels and power generation as it works to build out hydrogen demand in sectors where greenhouse emissions from fossil fuel fuels are hard to abate.

Expectations are for hydrogen to play a larger role in transportation fuels and power demand with continued global shifts toward lower greenhouse emissions to stem climate change impacts from burning fossil fuels.

In the transportation fuel sector, Chevron and Caterpillar are collaborating to develop hydrogen-based alternatives to traditional transportation fuels for rail and marine vessels, the companies said in a statement Sept. 8.

Railroads and vessel bunkering accounted for about 5.5 billion gallons of US distillate fuel sales in 2019, out of total distillate fuel sales of 63 billion gallons, according to the most recent data from the Energy Information Administration.

The goal of the Chevron-Caterpillar project is to confirm the feasibility and performance of hydrogen for rail and waterborne uses. It will also address hydrogen uses in primary power generation and will fall under the mantle of Chevron's new business unit -- Chevron New Energies.

"Through Chevron New Energies, Chevron is pursuing opportunities to create demand for hydrogen -- and the technologies for its use -- for heavy-duty transportation and industrial sectors, in which carbon emissions are harder to abate," said Jeff Gustavson, president of Chevron New Energies.

Progress Rail, a Caterpillar company, is a facilitator of the venture, and work on creating a hydrogen-fueled locomotive and associated fueling infrastructure is underway.

Chevron takes stake in ACES project

Chevron said in a statement Sept. 9 that it would acquire a stake in the Advanced Clean Energy Storage joint venture partially owned by Mitsubishi Power Americas, which will produce green hydrogen for electricity with lower carbon emissions than electricity produced using fossil fuels like coal.

Green hydrogen is produced using renewable fuels, while blue hydrogen is produced from fossil fuels through carbon capture and storage.

The joint venture -- known as ACES Delta -- is located in Delta, Utah, adjacent to the Intermountain Power Plant. Chevron will join Mitsubishi Power and Magnum Development in the venture, which will "produce, store and transport green hydrogen on a utility scale for power generation, transportation and industrial applications in the western United States," the statement said.

Mitsubishi Power Americas CEO Paul Browning said in a statement that after several years of working with green hydrogen in the power sector, the venture is looking to expand into the transportation and industrial fuel segments, areas where Chevron's long experience as a refiner of hydrocarbon-based refined fuels will be beneficial.

"Chevron's footprint and expertise in the transportation and industrial sectors make them an ideal partner for this next phase of expansion," Browning said in the statement.

Mitsubishi, Shell Canada look to blue hydrogen

In Canada, Mitsubishi signed a memorandum of understanding with Shell Canada to build a low-carbon hydrogen facility using natural gas stored in carbon capture storage near Shell's Scotford facility outside Edmonton, Alberta, to create blue hydrogen for export to Japan.

The plant is expected to be built and online by the second half of the decade, Mitsubishi said in a statement Sept. 8. The plant's first phase is expected to produce about 165,000 tons of hydrogen per year, which would be converted to low-carbon ammonia for export to Asia.

Mitsubishi's project timeline dovetails with Shell Canada's previously announced proposal to build a large-scale carbon capture project at the Scotford Complex.

Shell Canada announced in mid-July its Polaris Project -- a large-scale carbon capture and storage project at Scotford -- which is expected to come online in the middle of the decade if approved by Shell.

"Shell is leveraging our global leadership in carbon capture and storage to help produce the low-carbon products our customers need to move through an accelerated energy transition," Mark Pattenden, Shell's senior vice president of chemicals and products for Canada, said in the statement.

"This opportunity is in line with our vision to create a world-class site to provide customers with lower-carbon fuels, products and carbon storage," he added.

Currently, the Shell Scotford Complex consists of a bitumen upgrader, oil refinery, chemicals plant and the Quest Carbon Capture Storage facility, which has already captured more than 6 million tons of CO2 in its six years of operation.

Polaris would have storage capacity of over 300 million tons of CO2 over the life of the project, according to Shell Canada.