BP pausing blue hydrogen effort at Whiting Refinery

Blue hydrogen is produced by converting natural gas into carbon dioxide and hydrogen, with the CO2 being stored underground. The low-carbon hydrogen fuel can be used in a variety of areas, including steelmaking, power generation and agriculture.

The Whiting Refinery had been identified as the site to produce the hydrogen as part of the the Midwest Alliance for Clean Hydrogen, or MachH2, which was selected in 2023 by the Biden administration to receive up to $1 billion to develop a clean hydrogen hub.

MachH2, a coalition involving Indiana, Illinois and Michigan, used the refinery as a key part of its pitch to establish one of the seven hydrogen hubs that were selected for funding.

Congressman Frank Mrvan, D-Highland, previously said the project could generate an additional $6 billion in private sector funding and employ some 16,000 skilled tradesman over several years.

However, in a statement provided to Inside INdiana Business on Thursday, BP said other factors in its decision to pause the hydrogen project included a slow-developing hydrogen market in the Midwest and uncertainty created by current economic conditions.

“BP is committed to remaining a critical driver of the economic engine that powers northwest Indiana and the Midwest,” BP said in the statement. “While we are indefinitely pausing our low-carbon project in the region, our focus is on building a strong, economically competitive future for our Whiting Refinery.”

BP also noted that it has been unable to identify a location for a carbon storage facility. A spokesperson said carbon storage and sequestration is a necessary element to developing blue hydrogen.

Uncertainty at the federal level

After taking office in January, President Donald Trump signed an executive order, “Unleashing American Energy,” that paused the disbursement of funds appropriated through the Infrastructure Investment and Jobs Act, which includes funding for the hydrogen hub.

While MachH2 received $22.2 million in initial federal funding last November for the project’s first phase, which would support infrastructure building and workforce program development, officials in northwest Indiana said the project was “in limbo.”

Congressman Mrvan and Senator Jim Banks, R-Ind., sent a letter last month to Energy Secretary Chris Wright urging the Trump administration to prioritize northwest Indiana as a hydrogen hub.

“Prioritizing a Hydrogen Hub in Northwest Indiana is a bold, pro-America decision that plays to our state’s strengths,” the letter said. “Indiana offers the Hoosier workforce, infrastructure and industrial knowledge to deliver results fast. This project is a key step in strengthening America’s energy dominance, ensuring we remain the world leader in energy production while creating jobs and boosting economic growth. We respectfully ask that the Administration make the Hydrogen Hub project in Indiana a top priority.”

What’s next?

BP noted in its statement that the decision in Whiting relates solely to its involvement in the Midwest and “not to any other low-carbon hydrogen project [it] may develop elsewhere in the U.S. or globally.”

Officials from MachH2 have not commented on BP’s decision.

Inside INdiana Business has reached out to Indianapolis-based Energy Systems Network, one of the dozens of organizations involved in MachH2, but did not receive a response at deadline Thursday.