XOM Halts Plans for Massive Blue Hydrogen Plant Amid Weak Demand

Core Insights - Exxon Mobil Corporation has paused its plans for the construction of the blue hydrogen facility in Baytown, Texas, due to weak customer demand for blue hydrogen [1][9] - The facility was intended to produce 1 billion cubic feet per day of blue hydrogen, which is a cleaner fuel produced from natural gas with carbon dioxide captured and stored underground [1][2] - The higher costs associated with blue hydrogen production have led to insufficient customer willingness to pay, further exacerbated by economic uncertainty in Europe [2][3] Company Challenges - The company has struggled to secure offtake agreements from customers, which are essential for advancing the hydrogen project [4] - Previous delays and setbacks in the construction of the hydrogen production facility highlight broader challenges faced by oil and gas companies transitioning to lower-carbon businesses [4][9] - The potential for resuming the project in the future is contingent on a strengthening demand for blue hydrogen [3]