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Natural gas

Blue Hydrogen Market Outlook: Oil and Gas Players' Shift in Strategy

Strategic Insights

— 1 min read

The oil and gas sector's interest in blue hydrogen has seen a shift in strategy over the past year, with some companies scaling back investments in low-carbon solutions and focusing on high-margin projects. Blue hydrogen currently dominates the low-carbon hydrogen capacity market, accounting for 84 percent of active capacity. However, its growth is forecasted to be outpaced by green hydrogen, driven by falling renewable energy prices.

Key Takeaways:

  • Oil and gas companies have broadly maintained their competitive positioning within the blue hydrogen market, with ExxonMobil and Shell being the largest participants investing in blue hydrogen projects.
  • ExxonMobil and Shell have cumulative capacities of 952ktpa and 797ktpa, respectively, but their strategies differ, with ExxonMobil focusing on a lower volume of projects.
  • Key players in the blue hydrogen market include Shell, ExxonMobil, BP, Nutrien, Air Products and Chemicals, Qatar Fuel Additives, and others, with various companies having announced the halting or complete cancellation of some blue hydrogen projects.
  • Green hydrogen is expected to see strong growth, driven by lower levelized production costs, but it continues to face barriers to reaching completion.
  • Royal Dutch Shell has announced the halting of some blue hydrogen projects, while companies like BP and ExxonMobil have maintained their focus on blue hydrogen, with the latter's Baytown Hydrogen Facility driving a significant portion of its capacity.

Statistics:

  • 84 percent of active low-carbon hydrogen capacity is attributed to blue hydrogen (ResearchAndMarkets.com).
  • ExxonMobil and Shell have cumulative capacities of 952ktpa and 797ktpa, respectively, in blue hydrogen projects (ResearchAndMarkets.com).
  • ExxonMobil's blue hydrogen capacity is driven primarily by its Baytown Hydrogen Facility in the US.
  • Recoverable natural gas resources were estimated to be around 175 trillion cubic meters (Source: International Energy Agency).
  • Global energy-related CO2 emissions in 2020 stood at around 33.1 billion metric tons (Source: International Energy Agency).

Sources:

  • ResearchAndMarkets.com's "Oil and Gas Sector Strategies in Blue Hydrogen" report.
  • International Energy Agency (IEA). (n.d.). Recoverable Natural Gas Resources. Retrieved from https://www.iea.org/data-and-statistics#
  • International Energy Agency (IEA). (n.d.). CO2 Emissions from Fuel Combustion. Retrieved from https://www.iea.org/data-and-statistics#

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