By: James Osborne

Mostly used by oil refineries and fertilizer plants, hydrogen is a relatively small industry -- for which the Gulf Coast has long been the hub.

But with countries around the world looking at hydrogen as a low-carbon source of energy, hydrogen could become a whole lot larger, replacing petroleum-based fuels for trucks, ships and other heavy duty transport, as well as natural gas used to generate the intense heat needed to produce steel and petrochemicals.

Now, political and business leaders in Texas are making the case to the Biden administration that the Gulf region should be at the forefront of a new clean hydrogen industry, with plans to clean up existing facilities while also expanding the production and applications of hydrogen energy in the region.

"There is simply no better place in the United States to establish a large-scale hydrogen hub than Houston," a bipartisan coalition of Texas congressional representatives, including Houston's Rep. Lizzie Fletcher, a Democrat, and Rep. Dan Crenshaw, a Republican, wrote to Energy Secretary Jennifer Granholm last week.  "The energy capital of the world, Houston has a unique concentration of industries, manufacturing, and expertise that is unmatched."

Over the next 15 years the Department of Energy is looking to spend $7 billion to expand and clean up the U.S. hydrogen industry, with plans to create between six and 10 "hydrogen hubs" across the country. Part of the $1.2 trillion infrastructure bill Congress passed last year, the hubs are part of the Biden administration's plan to decarbonize heavy industries such as trucking and petrochemicals, which cannot be easily electrified.

Competition is expected to be fierce between regions ranging from Silicon Valley in California to New York's sprawling port and industrial complex

Texas leaders are making the case that the Gulf Coast is the logical hub of the new industry, with not only hydrogen infrastructure already in place but a network of industrial and petrochemical facilities ready to convert to hydrogen energy to reduce their own emissions. And one day, perhaps, the Gulf could export hydrogen to the world just as it does oil and natural gas.

But first they will need to clean up the Gulf's existing hydrogen plants, which use a carbon-intensive process to convert natural gas to hydrogen. The plan is to capture those emissions and store them in old oil fields beneath the Gulf of Mexico, part of a larger plan to store industrial emissions there, while also building new wind and solar-powered hydrogen facilities, said Brett Perlman, CEO of the non-profit Center for Houston’s Future, part of a coalition of energy and technology companies and universities.

"What we're on the verge of is creating an entirely new industry," he said.  "We know Houston needs to decarbonize, but we also believe this is a huge economic development opportunity for the region and the state."

Were Houston to win designation as one the Energy Department's hydrogen hubs, it could be looking at more than $1 billion in federal funding to help develop a clean hydrogen industry on the Gulf.

Companies such as Air Liquide, bp America, Calpine and Exxon Mobil would put that money toward everything from building hydrogen fueling stations for trucks to installing carbon capture equipment on existing hydrogen facilities, with the companies expected to match whatever funds they receive.

"Hydrogen has become a central element of the energy transition," Air Liquide CEO Benoît Potier said last year. "The time to act is now, not only as companies on a stand-alone basis, but by joining forces with states, other industrial groups and the financial community."

Using carbon storage to allow the continued production of hydrogen from natural gas remains controversial with many environmentalists, who believe it makes more sense to invest in so-called "green" hydrogen -- in which water, not natural gas, is used to produce hydrogen.

But that process, which NASA has used on spacecraft for decades, requires enormous amounts of electricity. And with scientists warning global emissions need to begin declining within the next three years, many experts, like former energy secretary Ernest Moniz, believe both technologies are needed,

"The key here is not to pick a winner," Perlman said. "The technology is going to evolve over time, and let the market decide."

The Biden administration is expected to make a decision on its hydrogen hubs by the end of 2023, with construction on projects expected to begin by 2025.