More Green Ammonia For The US, & More Electrofuels for Texas

Texas has been full of surprises this year, and we’re not talking about a little thing like the State Attorney General running away from a process server in broad daylight. Texas has also become a hotbed of renewable energy activity, despite its long footprint in the fossil energy area. In the latest development, the Danish firm Topsoe announced that it is part of a scheme to drop a gigantic new electrofuel plant in the state, featuring green hydrogen. The same company is also involved in a new green ammonia plan that could find a footing in Texas, too.

The Green Ammonia / Green Hydrogen Connection

For those of you new to the topic, ammonia (NH3 or H3N)) occurs naturally. A human-made version is also ubiquitous throughout modern industrialized economies and agricultural systems. The problem is that almost all of the global supply of human-produced ammonia comes from fossil energy sources, which provide the three hydrogen atoms to bond with the nitrogen atom.

The US Energy Information Administration has quite a few things to say about the carbon intensity of the ammonia economy, such as this:

“Globally, ammonia production is a carbon-intensive process, and 98% of ammonia plants around the world use fossil fuels as a feedstock, primarily natural gas (72%) and coal (22%). U.S. ammonia production, the third-largest in the world behind China and Russia, is dominated by less carbon intensive natural gas-fed ammonia plants, which account for 92% of all U.S. ammonia production.”

They probably mean less carbon intensive relative to producing ammonia from coal, but that doesn’t let natural gas off the hook. The natural gas supply chain is a minefield of environmental and public health impacts, from drilling sites on up to transportation, storage, and distribution networks, along with a heavy strain on water resources in some regions.

The ammonia industry’s reliance on fossil feedstocks also presents bottom line challenges. Boom-and-bust cycles in the natural gas industry can spring price spikes, supply chain disruptions and other unwelcome surprises on ammonia producers.

The green hydrogen trend should help smooth out some of those bumps by expanding the range of feedstocks for ammonia production.

First Ammonia Rides The Green Ammonia Wave

Green hydrogen can be produced from biomass, biogas and wastewater. However, most of the interest is currently focused on electrolyzers that deploy renewable energy to push hydrogen gas from water. That’s where Topsoe comes in.

Earlier this month, Topsoe announced that it will provide the company First Ammonia with dibs on up to 5 gigawatts of Topsoe electrolyzer cells. That will put First Ammonia on track to build out a global network of green ammonia plants , capable of churning out up to 5 million metric tons of green ammonia yearly.

“This is shaping up to be the largest agreement in the world, to date, for any type of electrolyzer and will displace almost 5 BCM of natural gas and eliminate 13 million tonnes of CO2 emissions per year,” enthused First Ammonia in a press release, which is not such great news for natural gas stakeholders.

“At 5GW, this would be the largest ever electrolyzer reservation of any type,” First Ammonia emphasized. “The production of 5 million metric tons of green ammonia produced per year would eliminate 13 million tonnes of carbon dioxide emissions annually, the equivalent of taking 9 million petrol-fueled cars off the road.”

The deal will begin with an initial purchase of 500 megawatts of units for two First Ammonia facilities, planned for locations in northern Germany and the southwestern US. If all goes according to plan, those plants will go into operation in 2025. First Ammonia states that the plants will operate on a schedule at that supports renewable energy development in those regions.

As for where in the southwest, that’s a good question. Texas would be a good guess despite its oily-gassy history. Stakeholders in are already putting the pieces together for a green hydrogen hub in Texas that leverages solar, wind, biogas, energy storage and fuel cells along with existing pipelines and other applicable parts of the oil and gas infrastructure.

Follow The Money To Green Ammonia

For the record, First Ammonia is an affiliate of the financial management firm Christofferson Robb & Company, and that is interesting from a bottom line perspective. The Robb part of the equation belongs to the company’s CEO Richard Robb, who is Professor of Professional Practice in International Finance at Columbia’s School of International and Public Affairs.

CRC launched in 2002 with an eye on helping banks manage portfolios of loans to small and medium businesses including farmers. The firm’s activity appears to have been mainly fuel-agnostic, but the affiliation with First Ammonia could mark the start of a more intensive focus on renewable energy, especially in consideration of the CRC’s relationships in the agriculture industry.

Topsoe has also begun pivoting into renewables. For the electrofuel project in Texas, the company is putting its electrolyzer technology in the hands of the firm HIF Global, which plans to produce eFuels from green hydrogen and recycled carbon dioxide at a new facility to be located in Matagorda County. Construction is planned to begin in 2023 with production starting in 2026.

Electrofuels cut out the fossil energy and energy crop middle-persons of conventional fuel production, in favor of synthesizing identical fuels from elemental building blocks.

When online, the HIF plant in Texas will churn out 200 million gallons per year of eFuel that can replace conventional gasoline on a drop-in basis. That goes for equipment at gas stations as well as car engines.

The Texas connection may come as a surprise to some, but not to HIF Global and other stakeholders. The company intends to put down firm roots in the state, including workforce training.

“We see in Texas great benefits to the area,” HIF enthuses. “We also plan to engage community and work with local colleges for career development.”

“As for the business opportunity, Texas is the largest wind generator in the US (~28 GW), it has very competitive state tax laws and a favorable regulatory environment for the development of large infrastructure projects,” they add.

The overall decarbonization benefit remains to be seen, but the electrofuel industry does have one key advantage over the biofuel industry. Instead of extracting carbon (and hydrogen) from energy crops, electrofuels can deploy waste carbon from industrial sources.

If all goes according to plan, more green ammonia fertilizer could some day be put to use growing more food crops instead of energy crops. If you have any thoughts on that topic, drop us a note in the comment thread.

For those of you interested in keeping up with Texas State Attorney General Ken Paxton (this guy), the Texas Tribune has a good rundown of the runaway AG’s legal problems.

Follow me on Twitter @TinaMCasey.

Image: More green hydrogen and green ammonia for the US and Texas (screenshot courtesy of HIF Global).

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