Big Liquid Hydrogen Project In Teesside, UK – BP Are Still Pushing The Envelope.

Bp have lived on the innovation edge for many years, as is clear by listing a few ventures and misadventures from the past. I have bent the list to include a bit of Amoco history before they merged with bp in 1998 (I joined Amoco in 1986).

The first unconventional resource was tight sand, when Nolte and Smith at Amoco introduced massive hydraulic factures that enabled gas and oil to flow from low permeability sandstone.

The second unconventional resource was coalbed methane, when Amoco led the charge in the prolific San Juan basin where gas flowed at high rates from openhole cavity wells (that were not fracked) and where coal permeability strangely increased with depletion.

In 1998 bp merged with Amoco, in a deal valued at $48 billion, the largest in the oil business to that point. Only two years later, bp acquired Arco for $26 billion to form a company leviathan.

In the 2000 decade, bp made great strides in producing oil from deepwater plays in the Gulf of Mexico, based around four hubs called Atlantis, Mad Dog, Na Kika, and Thunder Horse. An exhilarating recent wave of projects includes a $1.3 billion expansion of Atlantis, a second extension at Thunder Horse to add 50,000 bopd, plus a $9 billion Mad Dog 2 play expected to produce 140,000 bopd from 14 new wells by 2022.

In April of 2010, a drilling rig called Deepwater Horizon exploded then sank with the death of 11 men working on bp’s Macondo prospect. Bp eventually paid out $56 billion to rectify the disaster.

In 2018, bp paid $10.5 billion for BHP shale properties in oil-rich onshore basins in USA – bp’s biggest deal in twenty years.

In 2020, bp reinvented itself as an integrated company as summarized in its Energy Outlook 2020. It predicted that oil production and greenhouse gas (GHG) emissions from fossil energies had peaked in 2019.

The latest renewable venture is Teesside hydrogen, referring to an industrial hub on the northeast coast of England.

The few selective ventures above indicate the company called BP-Amoco, then later bp, have been innovative and brave even when faced with failure.

Let’s dig a little deeper into this integrated energy company by examining bp’s recent investments in the UK and the US.

Bp renewables in the UK. 

Bp’s portfolio includes an offshore wind project in the Irish Sea estimated at 3 Gw (Gigawatts or billion watts), installing 16,000 charging stations by 2030, and Teesside hydrogen.

Teesside, population almost 400,000, is a built-up area on the northeast coast and about two-thirds of the way up from London to Glasgow.

The industry of Teesside is dominated by the commodity and integrated chemical producers in the northeast of England. These companies make products such as petrochemicals, commodity chemicals, fertilizers and polymers.

This industry center has 5 of the UK’s top 25 greenhouse gas (GHG) emitters, and Teesside altogether contributes 5% of the nation’s industrial emissions.

The vision is for Teesside to become a major hydrogen hub for transport in aviation, shipping, and heavy trucks – all sectors where its hard to use battery power. But the concept would also include powering hard-to-abate industries such as cement and steel-making.

The original plan, called H2Teesside, was to generate “blue” hydrogen by decomposition of methane, CH4, while the byproduct of CO2 would be captured and buried (CCS) beneath the ocean.

The recent HyGreen addition would electrolyze water into “green” hydrogen and oxygen. This is more expensive due to the cost of electrolysis and clean electricity if that is used.

Regarding jobs, Louise Jacobsen Plutt, bp’s senior vice president for hydrogen and CCUS, said: “‎Together, HyGreen and H2Teesside can help transform Teesside into the UK’s green heart, ‎strengthening its people, communities and businesses. This is exactly the type of energy we want to ‎create and more importantly deliver.”

Related bp visions:

Bp has signed an understanding with Daimler Truck to initiate the infrastructure required for fuel-cell hydrogen trucks in the UK.

HyGreen Teesside is bp’s first green hydrogen project in the UK. But the company is pursuing similar projects in its refineries at Rotterdam, Lingen in Germany and Castellon in Spain.

Bp is also the preferred bidder for a green hydrogen hub in Aberdeen, and has done a feasibility study for a plant in Western Australia.

The Teesside projects of bp mesh with the goals of the UK government. Combined, HyGreen and H2Teesside could generate 1.5 Gw of hydrogen production and deliver 30% of the government’s target of 5 Gw by 2030.

Bp renewables in the US.

Bp is established in solar and wind projects in the US. They have added 9 Gw of solar energy, and anticipate financial returns of 8-10%. Bp’s goal is 50 Gw of global renewables of all types by 2030.

Solar projects are a 50-50 venture with Lightsource bp. This company has six solar projects operating in five states — California, Kansas, New Mexico, Pennsylvania and Texas. Four more projects will be finished by the end of this year. Altogether, these projects will generate around 1,045 Mw (megawatts or million watts) of renewable electricity – enough to power more than 180,000 homes each year.

One project close to Dallas, also operating, generates 260 Mw while saving 318,000 metric tons of CO2 per year (same as taking 69,000 gasoline cars off the road).

Another project in Pueblo, Colorado, is a joint venture between Lightsource bp, Xcel Energy, and EVRAZ North America. Generating 300 Mw, it will save 434,000 metric tons of CO2 per year (same as taking 92,000 gasoline cars off the road). It will also support 1,000 workers at EVRAZ’s steel mill – the first steel mill in the world to be powered by solar and provide green steel.

Lightsource bp has 8 Gw under development. But bp has separately purchased an extra 9 Gw of solar from 7X Energy for $220 million. This is a big step toward their goal of 20 Gw by 2025 and 50Gw by 2030. Things are moving fast!

Nine onshore wind projects are operating in six states: Colorado, Idaho, Indiana, Kansas, Pennsylvania and South Dakota. Altogether, they supply enough electricity to power 450,000 homes for a year.

Bp has partnered with Equinor, the oil giant owned by Norway, to construct two large offshore wind projects totaling 4.4 Gw of power off the northeast coast of the US, called Empire Wind and Beacon Wind.  The first should be operating by mid-2020s. These should provide enough electricity for about 2 million homes.

In closing…

bp has a global goal of 50 Gw of net renewable electricity by 2030, compared with only 3.3 Gw installed in 2020. That’s a stretch but knowing bp’s vision and resilience, you wouldn’t want to bet against it.

To give some context, these numbers can be compared with typical energy of a new coal- or gas-fired power plant (600 Mw) and a new bp solar grid (260 Mw northeast of Dallas, Texas.)

For hydrogen, a reality check has been put out by heavy thinkers at Rystad Energy. Hydrogen is expensive and unproven, and these are serious headwinds. Their forecast for hydrogen is not a silver bullet, because only 7% of the world’s energy by 2050 will be consumed in a niche market of aviation and shipping fuel, and manufacture of metals and chemicals (fertilizers and plastics). Although prices of hydrogen will come down over time, it seems a case of too little too late for other than niche applications.

Just this week, Caterpillar, BNSF Railway, and Chevron announced they will develop and build a hydrogen-powered locomotive.