HIF Global's Gentle on E-fuels Project, Renewable Fuels Misconceptions [WATCH]

When it comes to powering the future of transportation, EV batteries and hydrogen get a lot of attention. But companies like HIF Global see opportunity in synthetic fuels made using renewable power. These are electro fuels like e-gasoline and e-diesel. In this Hart Energy Live exclusive interview, we're speaking with Meg Gentle, executive director at HIF Global, a company seeking to build a $6 billion e-fuels project on the Texas Gulf Coast. 

Chris Mathews, senior editor of shale and A&D, Hart Energy: Would you mind giving us a brief overview of the e-fuels market and where you all see opportunity?

Meg Gentle, executive director, HIF Global: Sure, Chris. So e-fuels are synthetic fuels that are made from green hydrogen and recycled carbon dioxide. So they're really made from air and water. We take the hydrogen from water from a process of electrolysis. Electrolysis needs a lot of power—electricity—to make the process happen. And we use renewable electricity so that we're making, you know, completely carbon-free hydrogen. And then we bring recycled CO₂ to our facility. So this is CO₂ that's in our atmosphere already, and we can recombine the hydrogen and the carbon and make a hydrocarbon. And that's first, a shipping fuel. And then we can take the shipping fuel and refine it further into gasoline and eventually into jet fuel. So, these are considered e-fuels because they're made from renewable electricity and they're also drop-in, meaning they can be used by existing infrastructure. They're chemically equivalent to their fossil fuel counterpart. So all the things we have in use today already, you know, pipelines, filling stations, ships, cars, trucks, airplanes—really anything that we use fossil fuels for—these can be a replacement.

CM: You all have built a demonstration plant in southern Chile. Can you tell us a bit about that project and of course, [HIF is] seeking to build a larger $6 billion-plus facility here in Texas. Tell us how your Chile plant is guiding thoughts about how the Texas plant might work.

MG: As you would imagine, since large input for us is the renewable power, we actually started this plant in the southern part of Chile where the wind is the very best wind resource for wind power. And so we've been working on the project there for I would say about seven years. We brought it into production in December. It was an amazing day. We started up the wind turbine and then the facility that produce[s] the e-fuels and we put the fuels into a Porsche 911, drove around the turbine and we sent it on its way. And so that was a demonstration plant size, and it really proved that all of the equipment can work together to produce these synthetic fuels. So we have a footprint in Chile to be able to continue expanding that, ultimately, for about 15 gigawatts of wind power and about 75,000 barrels a day of e-fuels. And in the meanwhile, we have taken that same concept and said, where else in the world do we have the right inputs? And Texas was an obvious answer because the wind resource in Texas is also really good. In addition, we have a transparent regulatory process. We have a lot of existing infrastructure we can leverage. We have a very well-interconnected electric grid that can give us security on our power. We have a lot of CO₂, so a lot of CO₂ emissions in Texas that we need a solution for. And so you're exactly right. We have a plan in Texas that we will start construction next year. It's about a $6 billion facility. It'll be producing 14,000 barrels a day of e-fuels, shipping fuel and gasoline to start. That's about 200 million gallons per year. Or, if you think about it, it will decarbonize about half a million cars on the road today.

CM: Can you tell us just about securing renewable power and the environment for that here in Texas? 

MG: Few people realize that Texas actually has more renewable power than any other state in the country. And so there today even is, I think, 30 gigawatts of renewable power that has been permitted, that is in various stages of trying to come to market. And similar to the way we will need long-term contracts for our fuels, those permitted projects need, you know, long-term contracts, people that will buy the power. The e-fuels facility will actually be a demand catalyst for some of that renewable power to be built. We need 2000 megawatts of power at our plant. For that, we will have to contract for 5,000 megawatts of renewable power capacity because, in general, wind power in Texas is running at a 40% capacity factor. So, you have to vastly overbuild the wind capacity to make sure that we are adding all of the power that we need to keep the ERCOT grid secure.

CM: Can you give me a roadmap in terms of bringing costs down or your thoughts over the next decade, two decades, about where this goes in terms of cost?

MG: You can see the power of scaling up the facility, right? Because the Haru Oni [hydrogen] facility where Porsche is taking the gasoline today is not optimized for scale, right? So it's built to prove out the technology and to do that as quickly as possible. As we move then to commercial-sized scale, we're reducing the cost of production down almost to parity with fossil fuel prices and some carbon market pricing. And we put together the power of scale economies on construction and in the U.S. with the Inflation Reduction Act tax credit mechanisms, which are able to bring us down to almost cost parity with fossil fuels. So there are a lot of, I guess myths almost, in the market about synthetic fuels being many multiples of their fossil fuel alternative. But we're finding that actually to be untrue. So without any help from the tax credits, we're about two times the cost of fossil fuels. And with the benefit of the tax credits, we're now almost at parity. So, you can see we're becoming in reach even for retail customers as we bring that into production in 2027.

CM: Thank you for taking the time to speak with us. Learn more about HIF Global online at hartenergy.com.