Change Agent

Fall 2023
By Laura Furr Mericas

Vice president of BP’s U.S. hydrogen business Tomeka McLeod ’95 has the task of helping the company rapidly scale up its production of low-carbon hydrogen, which many experts view as essential to addressing climate change. The International Energy Agency notes that hydrogen could play a key role in transitioning to a cleaner energy system, because it is light, storable and dense with energy and produces no greenhouse gases directly.

“It’s an element that can help the world achieve net zero emissions faster,” McLeod says. “We’re excited about its potential to decarbonize our refining operations and parts of the economy where full electrification is technically or economically unfeasible.” It sounds simple enough, but scaling up the production and use of hydrogen involves many challenges, including financial, technological and governmental.

For McLeod, whose 17-year career at BP has included finance, commercial, leadership and advisory positions, a big part of her new executive role is to tackle those challenges. We sat down with her to discuss her career and the realities of hydrogen in today’s evolving energy market.

How did you begin working in hydrogen?

When BP reorganized [around 2020], I was asked to help set up the business that I’m in now, which is called Gas and Low Carbon Energy. I was asked to be the chief of staff for the executive vice president who was leading that sector. I have seen this part of BP grow as we made decisions about getting into offshore wind, growing our solar power projects and scaling up hydrogen. When it was time for me to move on from that position, I said, “You know, I have to stay in this business.” I felt that this is where I could really have impact.

We’re excited about [hydrogen’s] potential to decarbonize our refining operations and parts of the economy where full electrification is technically or economically unfeasible.

What are your main goals in this role?

My main goal has been building the organization — when I came in, there was a very small team. Second is demonstrating progress. In the Midwest, we are progressing a clean hydrogen hub that is part of the Midwest Alliance for Clean Hydrogen that recently applied for U.S. Department of Energy Hydrogen Hubs funding. In the Pacific Northwest, we’re looking to potentially develop a project using green hydrogen to produce sustainable aviation fuel. Third, there are a number of things in the industry — like rules for tax subsidies and incentives — that we need to work on with the government and other partners, so we can really make sure that the industry takes off.

How does hydrogen compare to other options for lower-carbon energy?

I think all of the potential options that we have to decarbonize are critically important. Electrification is super important. Biofuels are going to be really important, as well.

We think there’s going to be quite a bit of demand [for clean hydrogen] in the U.S. because [it] will be able to decarbonize a number of industrial applications, like oil and gas refining. Hydrogen is really important for ammonia, so we start thinking about [how hydrogen can be used to create] fertilizer. There are big opportunities in marine, aviation, steel, heavy-duty transportation, power and other industrial applications where it would be really hard to electrify, because it’s too costly or just doesn’t make sense technically.

In the near term, the technology to produce clean hydrogen is pretty much there. But long term, the production cost has to come down significantly.

What needs to happen for hydrogen to take off?

In the near term, the technology to produce clean hydrogen is pretty much there. But long term, the production cost has to come down significantly. The current cost for electrolyzers, which produce hydrogen from water, does not support the industry getting off the ground. The U.S. government has laid out a target that by 2030 the cost of production for a kilogram of hydrogen should be $1, and the current cost of hydrogen production is many times higher than that.

There are so many different technological players who come to me all the time and say, “We have a novel way of producing ‘green’ hydrogen, which does not include an electrolyzer.” Or, “We can produce an e-fuel [a synthetic fuel generated with electricity] using hydrogen to provide fuel for the shipping industry.” We’re really going to need some of those technologies to take off in order for the industry to get to the scale that we’re talking about. We are definitely going to need to see some innovation.

Is that innovation coming from within BP or from partnerships with industry, universities and other interests?

It’s all of the above. If you look at where the most technological advancements and ideas have come from historically, [they] have often come from research institutions working collaboratively with industry. And that’s basically what we see now. We see opportunities for BP to partner with research institutions, governments around the world, wherever we can get the biggest brains trying to solve these problems. That’s what we’re really going to need to make this work.

How might government subsidies and regulations play into these goals?

The Inflation Reduction Act introduced tax subsidies, and we need to understand what the real guidelines look like. Permitting and approval is key — we need to make sure that we’re going to be able to get through the permitting process in a timely fashion in order to get our projects off the ground.

Another super critical thing for hydrogen is power — 70% of the cost of producing “green” hydrogen is related to the cost of power. We need to be able to get enough renewable power but also have the ability to pull power from the grid.

The final one: I don’t believe [that] “if you build it, they will come.” There’s still a gap, even with the tax subsidies, across a number of the potential uses for hydrogen between what customers are paying today and what it will cost to produce [clean hydrogen]. We need something on the demand side to incentivize these customers to switch to clean hydrogen or to even come to use hydrogen. I think players like BP are communicating that from an industry perspective, because we’re committed to it, but we need to make sure we’re doing projects that actually have a customer.