US refiners and chemical manufacturers are at the forefront of hydrogen production and consumption in the States. In light of impending legislative changes, this is expected to redefine the way hydrogen is consumed and distributed across the country.

When it comes to hydrogen production and consumption, manufacturers in the chemical and petroleum refining sectors have traditionally been the main players. Their notable volumes of hydrogen usage lend them more bargaining power compared to other subsectors.

Insights on the consumption, expenditure, and characteristics of energy in US manufacturing establishments are provided by the Manufacturing Energy Consumption Survey (MECS). This data is crucial for understanding energy intensity and tracking efficiency gains or losses within the industry. MECS data is gathered every four years with the next set expected in the summer of 2025 through spring 2026.

In 2018, the chemicals subsector, which includes petroleum and coal product refineries, were recorded to pay an average of $6.18 per million British thermal units (MMBtu) for hydrogen, closely followed by the petroleum and coal products subsector paying $6.77/MMBtu.

Of the total hydrogen production in the US, petroleum refiners used 68% of it, and ammonia and derivatives industries utilised 21%.

There is a significant variation in the purchase price of hydrogen among US manufacturing industries. Industries doing manufacturing of electrical equipment, appliances, and components that require high-purity hydrogen pay the highest average price for hydrogen at $86.19/MMBtu.

Data from MECS and the Petroleum Supply Annual (PSA) records that in 2018, total US production of hydrogen was 10 million metric tons. Two-thirds of this output was sourced via the steam methane reformer (SMR) process, primarily using natural gas as a feedstock. One-third was the byproduct of other chemical processes. A small, but increasing amount comes from water electrolysis — a process that separates water into hydrogen and oxygen.

New US-based merchant plants using SMR enjoy the lowest levelized cost of hydrogen estimated at $1.06 per kilogram in 2018 or $8.00/MMBtu in 2018 US dollars, including the cost of hydrogen

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