Big Tent Ideas

DAVID BLACKMON: Saudi Arabia Could Cash In On Democrats’ Climate Cash

OZAN KOSE/AFP via Getty Images

Daily Caller News Foundation logo
David Blackmon David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
Font Size:

As the ongoing “energy transition” progresses, hydrogen has once again become a trendy topic of conversation in the energy space as a fuel with high potential in both the transportation and power generation sectors.

The array of new incentives and subsidies applicable to hydrogen contained in the Inflation Reduction Act (IRA) play a big role here, nowhere more prominently than in the state of California.

For example, the Los Angeles City Council voted in early February to approve an $800 million proposal to convert one of the city’s biggest natural gas power plant to “green” hydrogen to great fanfare from the local press. The Los Angeles Times reported that “Council President Paul Krekorian described hydrogen as crucial to meeting L.A.’s goal of 100% clean electricity by 2035.

But then Krekorian went onto say something that’s important here: “It was widely seen as being an impossible goal. And we’re now on the precipice of achieving that,” he said.

Krekorian’s statement means that the governing body of the nation’s second-largest city just voted to spend $800 million of its citizens’ money to convert its biggest power plant to a technology that is not currently even proven in any real way.

Whether the city can make this all work remains to be seen, but it all seems like a pretty bold risk with the potential to generate an ultimate price tag many times higher than the original estimate.

The hydrogen story related to California became even odder a few weeks later at S&P Global’s CERAWeek conference in Houston. There, Air Products Chairman, President and CEO Seifi Ghasemi informed the audience of his company’s intention to help supply the California market with its own “green” hydrogen production. He sees the Golden State as a big potential market, and Air Products plans to capitalize on it, taking advantage of the new federal incentives in the process.

But there’s a catch: Air Products’ intent is not to manufacture the hydrogen domestically using U.S. workers and U.S.-centric supply chains and equipment, but to make it in Saudi Arabia, in partnership with Saudi interests. This may all come as a bit of a surprise to West Virginia Sen. Joe Manchin, who repeatedly assured the press and his constituents that the intent of the IRA was to incentivize domestic projects with domestic supply chains.

As reported by S&P Global, Air Products’ plan would involve producing the green hydrogen at a massive production plant in Saudi Arabia and shipping it halfway across the globe to California, where it would compete with hydrogen produced in that state and other U.S. domestic locations. “Right now, we think most of that product will be sold either in Europe or in the state of California,” Ghasemi said during a March 8 panel discussion.

The plan is a part of a partnership formed in 2020 by Air Products with Saudi Arabia’s ACWA Power Co. and the planned Red Sea city the Saudi government has named Neom. The $8.5 billion hydrogen facility would be the world’s largest to date and would come online in 2027 if all goes to plan. The hydrogen produced at the plant would be loaded onto tankers in the form of ammonia and then be separated back into hydrogen at facilities located in market destinations.

S&P Global reports that Ghasemi’s remarks “drew pushback from California stakeholders seeking to develop domestic production capacity to meet nascent demand. The comments also underscored growing competition among companies trying to gain a foothold in a space recently backed by ample federal incentives,” a reference to the incentives contained in the IRA and the Bipartisan Infrastructure Law (BIL) enacted in 2021.

Today, according to the American Chemical Society, ammonia is most commonly made by combining hydrogen with nitrogen recovered from natural gas at high heat generated by natural gas. The plan approved by the Los Angeles city council envisions producing the hydrogen with wind and solar power, similar to the process to be used in the Saudi Arabian plant operated by Air Products.

There, the similarities end, however. Perhaps someone should ask the drafters of the IRA and Sen. Joe Machin, who provided the law’s decisive Senate vote last August, if the establishment of a new market that would make the U.S. partially dependent on imports of hydrogen from Saudi Arabia was really their intent?

Because that was certainly not what anyone was told at the time.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel