agriculture, steel and cement production, and the ammonia and methanol industries.
Bracewell’ s lawyers have advised clients on the nuances of utilization and safety issues related to the distribution of hydrogen as retail fuel, the development of mobile hydrogen refueling stations, the use of hydrogen as pollution control in refineries, hydrogen distribution networks in the Gulf Coast region, supply of hydrogen to industrial customers and as a fuel into California. We represent hydrogen suppliers and providers of tube trailers inside third party industrial facilities, among others.
Joint Venture and Contractual Expertise
Hydrogen projects often involve an interdependent combination of processes and technologies that are used to produce, transport, store and / or utilize hydrogen As such, any hydrogen project will require a tailored set of contractual arrangements between the various project participants, which allow for the integration of these processes and address the various risks that each participant is exposed to by virtue of its participation in the project. Additionally, each project structure will need to take into consideration the goals of a potentially diverse set of investors which can range from tax equity investors and sponsoring governmental agencies to the base project owners and their capital providers.
Whether in the form of an equity level joint venture arrangement or commercial arrangements with outside service providers, Bracewell’ s project development team has the expertise to advise clients on all steps of structuring and documenting these project level structures.
Drawing on our extensive experience in the power, upstream and midstream energy space, we are able to assist clients in developing project structures which balance and allocate risks associated with processspecific operational and reliability issues( such as how power purchase agreements might impact a baselevel of feed stock for production of green hydrogen as well as how transportation and storage agreements may be impacted by those provisions) and regulatory compliance requirements( such as qualifications for relevant production and investment tax credits and the transferability of such credits) with the underlying assumptions on which the project was underwritten.
Project Development and Real Property Expertise
Bracewell’ s project development team has counseled clients on a wide variety of real property issues relevant to hydrogen production, transportation, storage and utilization projects. We have the expertise to assist clients in navigating the often-complex set of state and federal legal issues surrounding which real property rights project participants must obtain to conduct underground storage of hydrogen at a given site. Our teams’ extensive experience in the midstream space allows us to advise on emerging regulatory issues related to the transportation and distribution of hydrogen and to assist clients in negotiating applicable off-take and transportation agreements for hydrogen.
Additionally, project sponsors and investors will have to understand and comply with extensive permitting and regulatory regimes applicable to each jurisdiction in which they operate. This often requires addressing concerns of, and interactions with, other stakeholders in the area where the project is located, including governmental entities as well as affected landowners in and around the project area. Bracewell has a full-service team that can assist project participants with the relevant permitting, notice and other regulatory compliance requirements associated with hydrogen projects. Our team also has extensive experience engaging with outside stakeholders who may attempt to impede project development and preemptively addressing the risks that they pose to a project.
Tax Expertise
Bracewell’ s transactional tax practice is almost exclusively focused on the energy industry and has developed significant expertise in energy transition incentives, particularly federal tax credits enacted through the Inflation Reduction Act. Bracewell’ s tax group has been an important part of market leading energy transition projects including carbon capture, clean hydrogen and clean fuels utilizing hydrogen. The tax group not only focuses on qualification for credits, but also commercial agreements including covenants necessary to claim the credits, and indemnities for lost credits in the event of a failure to perform. In addition, the tax practice advises on the monetization of tax credits, including through tax equity transactions, and elections for direct pay or transfer of energy credits. The appropriate monetization strategy is evaluated in the early stages of project development, so early planning is done with a view toward long term capital opportunities. bracewell. com