‘Where the action is’
CEO of Mitsubishi Heavy Industries America talks about the lure of Houston
Takajiro Ishikawa, CEO of Mitsubishi Heavy Industries America, said his company moved its headquarters to Houston seven years ago from New York City to be “where the action is.”
At the time, the company was in the throes of developing Petra Nova, a first-of-its-kind carbon capture facility at NRG’s WA Parish Plant southwest of Houston, one of the earliest demonstrations of the technology behind an emerging industry.
The transition into lowercarbon technologies has since become central to the company’s mission, Ishikawa said.
The firm is expanding its purview from being a company that manufactures original equipment to one that also works with industrial clients to help them reduce their carbon footprint.
Its subsidiary, Mitsubishi Power Americas, is involved in two regional hydrogen hubs selected last month by the Department of Energy, including the Pacific Northwest Hydrogen Hub (PNWH2) and HyVelocity Hub based in Houston.
It also has partnered with Chevron on a joint venture that aims to develop a green hydrogen facility in Utah capable of producing 100 million metric tons a day of hydrogen from renewable energy and storing it underground to support the power grid in times of seasonal fluctuations in renewable energy.
The U.S. operation is a subsidiary of the Japanese engineering giant that designs and manufactures industrial technology used in a range of sectors, including energy, defense and aviation.
It employs more than 1,300 people in Houston. This interview
has been edited for clarity and length.
Q: What role is Houston playing in your transition?
A:
Houston is really taking off as not only the fossil fuel hub of the world but also the energy transition hub of the world. Because you need both to really catapult this energy transition. That’s why our move to Houston really has played to the benefit of our mission and hence, we’re able to strike a joint venture with Chevron in our hydrogen project out in Utah. And we’re also in collaboration with Exxon Mobil to do carbon capture. So we have two supermajors located in Houston who are our
Q: Can you tell me more about your strategic alliance with Exxon?
A:
Exxon has subsurface technology. That’s what they’ve been doing for 150 years.
We’re very good at abovesurface technology and carbon capture plants.
We said, “Why don’t we enter into collaboration to solicit deals and work together to identify what makes sense and to build carbon capture plants. And maybe sometimes even co-own them together.”
Exxon will take care of the transportation of the gas, the CO2 gas, and the sequestration part.
Q: Besides Petra Nova, are there examples of your carbon capture technology being actively used?
A:
In America, the only one that’s running is Petra Nova.
The other 15 or 16 are all outside of the country but they’re all part of a chemical process, so it’s not big.
Petra Nova was the biggest in the world.
Q: Are there any examples, yet, of your hydrogen tech being deployed?
A:
Delta, Utah — that’s the first example. That’s the biggest one and the first one in America. And it also earned a $504 million (Department of Energy) loan.
We invited Chevron to be the partner in the project. It’s now a joint venture with Chevron and us.
Q: When Petra Nova was under development 10 years ago, Japanese import-export banks supported the deal because it was the first-ofits-kind. Is that type of support still in play, or is it now established enough that it doesn’t need it?
A:
The ( Japanese) government decided to help get that project off the ground because no American lender was sure of that technology, so it couldn’t be project financed.
Fast forward 10 years, now we’re talking to lenders. And this is still a new technology for the American finance market. So we have to go through an education process with them.
To tell him this is a technology that works. What are your fears? What are your concerns, and how can we address them? That’s the work that I do.
Q: Currently? A:
Yes. Is a Japanese bank ready to do deal No. 2? Yes, but in order for a Japanese bank or a government agency to get involved, they need a story. That it’s going to help Japanese industry.
A lot of the projects that are being developed here are going to be invested in by Japanese money. And also backed by Japanese offtake contracts.
Q: So it remains to be seen if American lenders will get involved?
A:
They see an opportunity. But there’s only been one project here in America that’s running: Petra Nova.
So they’re waiting for project No. 2. Maybe it’s up to us and our alliance partner Exxon to really put a project together and show the rest of the world that this technology works.
Q: How much of what Mitsubishi Heavy Industries does is in those two buckets, carbon capture and hydrogen?
A:
It is still very small. Hydrogen and carbon capture are still at the frontier end of really taking off as a business. The whole idea of hydrogen being a new fuel that would save on CO2 emissions only came about a couple years ago. And the (Inflation Reduction Act) that was passed into law last year really put it into the forefront. So it’s a very small business today, but we are intending to grow this very fast.
On carbon capture, because there was no demand for the technology, we haven’t built a plant in a while. The last plant that we built was commissioned in 2017 at Petra Nova. But currently, we probably have about 200 inquiries for carbon capture plants here in North America.
Q: Are they power plants, mostly?
A:
They’re power plants and I think one cement plant, but we’re doing a lot of studies for steel companies.
Q: What makes up the bulk of Mitsubishi Heavy Industries’ business?
A:
The big business is power generation equipment, so conventional gas turbines, steam turbines, turbochargers, nuclear power equipment. Also defense and military, ship building, some automotive parts, and engineering.
Q: What role do you think Houston will play in the future of energy?
A:
The energy transition’s new fuel industry is really about manufacturing in the chemical industry.
Houston has a huge chemical industry base. There’s a big talent pool. And of course you have UH, UT, Texas A&M — top schools where they can get bright young engineers to come work.
People don’t realize the draws of Houston, but I think a lot of the Japanese companies are also seeing it.
After we moved, I think six or seven major Japanese companies moved the North American head office to Houston.
For example, Nippon Steel, (power generation company) JERA.