People claim hydrogen is the “fuel of the future,” so Air Products invested a ton of money on hydrogen. That turned out to be very costly, resulting in its CEO losing his job, reports the Wall Street Journal:
The chief executive of Air Products & Chemicals visited the Louisiana governor’s mansion in 2021 to unveil the industrial-gases supplier’s biggest-ever investment: a $4.5 billion facility that would make the fuel of the future by the Mississippi River. Seifi Ghasemi’s plan was to produce hydrogen from natural gas, capture the carbon dioxide, pipe it through wildlife-rich wetland and sequester it below picturesque Lake Maurepas. Ghasemi had a grand vision. Beyond its regular uses in oil refining and ammonia for fertilizers, hydrogen would power buses, trucks, trains, ships, planes and steel mills after the plant opened in 2026, he predicted.
Nearly five years after his visit, the project’s price tag has swelled to $8 billion, the construction timeline has slipped and the company is still seeking customers. Ghasemi has been ousted as CEO….The idea that low-carbon hydrogen could replace oil and gas in many applications was taking off when Ghasemi visited Baton Rouge, La., as politicians and executives were vowing to slash emissions. But sentiment has since soured. This fossil-fuel alternative remains stubbornly expensive, and governments in the U.S. and elsewhere have shied away from putting their weight behind it.
The tax bill approved by House Republicans would cut off hydrogen production tax credits, part of an effort to undo many Biden-era climate programs….Companies that once looked like early movers—such as the steel producer ArcelorMittal and Airbus, the plane maker—have delayed plans to use hydrogen.
“The main challenge right now is finding buyers,” said Martin Tengler, a BloombergNEF analyst who estimates that just 4% of the announced low-carbon hydrogen production capacity had secured funding as of 2024. Hydrogen hype isn’t new. High oil prices spurred an earlier wave in the 1970s. But high costs and impracticality—hydrogen is explosive and can leak through gold—meant that the plans fizzled.
When concerns about global warming revived interest in hydrogen as a power source, Ghasemi became a fervent believer. Air Products began projects before it had customers lined up, and took on technical challenges that its competitors left in the hands of experienced partners and contractors.
Air Products suffered as a result, and the value of its stock declined. Stock in Air Products was worth over $297 on June 9, 2021. Today, it stock is worth only about $279. By contrast, the stock of the typical American company has risen a lot since 2021. The S&P 500 Index, measuring the average stock price of 500 major companies, has risen by 87% over the last five years, even as the stock price of Air Products fell.
