Houston Chronicle

Chevron, Toyota to team up on hydrogen

Partnershi­p aims to combine their expertise to create ‘large-scale business’ for the future

- By Paul Takahashi STAFF WRITER

Chevron is pursuing a strategic alliance with Toyota North America to develop large-scale hydrogen businesses.

The California oil major on Wednesday said it has signed a memorandum of understand­ing with the Japanese automaker to collaborat­e on joint research and developmen­t of hydrogen-powered transporta­tion and storage, particular­ly for hydrogen-powered fuel-cell electric vehicles. The companies also agreed to seek government support for the infrastruc­ture, such as hydrogen fueling stations, needed to build a hydrogen economy.

“Working towards a strategic alliance on hydrogen presents an opportunit­y to build a large-scale business in a low-carbon area that is complement­ary to our current offerings,” Andy Walz, president of Chevron’s Americas Fuels & Lubricants, said in a statement. “This opportunit­y supports our efforts to help advance a lowercarbo­n future.”

Oil companies are increasing­ly looking to diversify into hydrogen as the world shifts away from fossil fuels over growing concerns about climate change. Hydrogen, the most abundant element on earth, can be harnessed and stored to deliver a tremendous amount of energy for transporta­tion, power generation and industrial uses.

For oil companies, hydrogen offers properties similar to oil and natural gas in that they can be transporte­d through pipelines and distribute­d through existing fuel station networks with some adjustment­s.

Houston, the nation’s oil and gas capital, is particular­ly wellpositi­oned for a hydrogen future. The region is already home to nearly 50 plants that extract hydrogen from natural gas, ac

counting for about onethird of U.S. hydrogen production.

Toyota has researched and developed fuel cell technology for nearly 25 years. The company manufactur­ed its first hydrogen fuel cell vehicle in 2014.

In December, Toyota unveiled its second-generation hydrogen car — called Mirai, after the Japanese word for “future” — which starts just below $50,000. Toyota projects that fuelcell electric vehicles, powered by hydrogen, will one day be as common as hybrid gas-electric vehicles.

“This is another important step toward building a hydrogen economy,” Bob Carter, Toyota North America’s executive vice president, said in a statement. “Combining Toyota’s decades of experience in developing

hydrogen powered fuel cell electric technology with Chevron’s deep resources in the energy sector has the potential to create new transporta­tion choices for both consumers and businesses that move us toward our goal of carbon neutrality.”

Today, however, hydrogen is too expensive to produce in vast amounts, costing the equivalent of $200 to $250 per barrel to produce, as much as five times

the cost of a barrel of oil. Many oil companies believe if they can bring the cost of hydrogen down, it could become a major energy source powering the global economy.

Chevron has invested in hydrogen before. The company over a decade ago installed several hydrogen fuel stations in California, but the effort to develop a so-called “hydrogen highway” has been slow going.

In 2018, California set a

target to build 200 hydrogen stations by 2025. The state currently has 45 hydrogen stations, but is planning to invest up to $115 million to build 111 new hydrogen fueling stations in the state by 2027.

Oil executives speaking at industry conference CERAWeek by IHS Markit last month said hydrogen will likely need incentives from government and investment­s from industry to rival fossil fuels.

“As an industry, we can’t give the market what it doesn’t want,” Chevron CEO Mike Wirth told CERAWeek attendees virtually last month. “We’ve got to find a way to work across the value chain in order to create that pull through for hydrogen into the right markets and the right uses that make sense for our customers.”

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