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BROWNSVILLE, Texas – Element Fuels Holdings, a Dallas-area startup, is proposing to build the first all-new U.S. oil refinery in nearly 50 years at the Port of Brownsville.
The company says it has completed site preparation and pre-construction on 240 acres at the port for a new hydrogen-powered refinery and combined-cycle power plant. It says its facility will be designed to process high gravity domestic shale oil to produce low-carbon intensity fuels. It could be operational by 2027.
Element Fuels made the announcement on June 6. It said the plan is to produce and recycle hydrogen using advanced technologies that will generate and deliver significantly cleaner, higher-quality fuels, including much-needed high-octane gasoline and electricity for commercial and consumer consumption.
“Element Fuels is not only ushering in the next generation of clean fuels, we’re also proving that, without a doubt, there is a way to produce higher quality, cleaner, higher-octane fuels that significantly advance the energy transition,” said Element Fuels’ Founder and Co-CEO John Calce.
“This changes everything – for the industry, for consumers, and for the well-being of the planet.”
The day after the announcement, Arturo Gomez, deputy port director for the Port of Brownsville, spoke about the project during a podcast with the Rio Grande Guardian.
“I think they made their public announcement just yesterday. But we’ve been working with them for several years now. It’s a very interesting concept (because) they’ve seen an opportunity to transition from conventional fuels and take us towards the greener renewable fuels,” Gomez said.
“So, their whole process is basically a refining plant to produce conventional fuels, but to produce them in a green way. And what does that mean? That the combustion needed in the refining process, instead of being heavily carbon emission, they’ll do it using hydrogen fuel and basically reducing carbon emissions to zero.”
Gomez said one of the “fascinating things” about this project is that Element Fuels will do a very clean version of the refining process, but they will also have a surplus of energy production.
“So, they’ll have an excess of 100 megawatts of power that they could throw back into the grid and offer it to other companies and investors looking at the port.”
Gomez said one of the reasons that they haven’t made a final decision is because, at this point in time, there is not sufficient energy for all of these projects.
“These guys will not only provide us with cleaner fuels, cleaner production of the fuels, but also with an additional 100 megawatts of energy to the to the region.”
Asked what the final financial investment will be, Gomez said: “I think the project will be divided into four phases. I think once all four phases are complete it would be close to a $4 billion.”
Element Fuels’ Founder and Co-CEO John Calce said he expects the project to be operational in 2027. He said it would be a “first of its kind” refinery, combining advanced, commercially proven technologies provided by best-in-class partners. Designed to process exclusively high gravity domestic shale oil, the refinery will produce low-carbon intensity fuels that will materially reduce carbon emissions, Calce explained.
“Element Fuels has received the necessary permitting to construct and operate a refinery capable of producing in excess of 160,000 barrels, or approximately 6.7 million gallons, per day of finished gasoline, diesel, and jet fuel,” Calce said.
“A permit for a greenfield refinery of this size, scope, and functionality has not been granted in the United States since the 1970s. This speaks to the innovative approaches we are taking to address climate and sustainability concerns in cleaner, greener ways that are new to the refinery space.”
Calce said the facility will also produce enough low-carbon hydrogen to supply approximately 100 percent of the refinery’s fuel requirements, essentially eliminating CO2 emissions.
In a press release, Element Fuels said hydrogen produced in excess of the refinery’s needs will be used to generate low carbon, utility-scale electricity from its hydrogen-capable combined-cycle gas turbine power plant.
“Over 100 megawatts of excess electricity generated from Element’s power plant will be made available to the Energy Reliability Council of Texas (ERCOT) to reliably support the surrounding community’s needs. The facility is an industry-first example of a sustainable economy and represents a significant step forward for the fossil to renewable and lower-carbon energy transition,” the press release stated.
The press release says the Port of Brownsville has become “an emerging, strategic location for the movement of bulk petroleum and refined products, natural gas liquids, and other specialized bulk liquid commodities.”
Element Fuels says the project will boost the local economy and improve quality of life for workforce members and their families by creating hundreds of jobs at above market wages.
To further support the region, Element Fuels says it is working with local and port officials to advance the Justice40 initiative established by the U.S. Department of Commerce to contribute to a climate-positive environment that provides residents of the Brownsville area and Rio Grande Valley with clean energy and affordable and sustainable housing.
“As a responsible corporate citizen, Element Fuels is working collaboratively with Brownsville and Rio Grande Valley stakeholders, including residents, businesses, and communities, to ensure that our corporate goals align with local needs and priorities,” the company says.
“By incorporating local and regional needs into our decision-making processes and operations, we are building an environmentally sustainable and inclusive future for residents while boosting economic vitality within the region and throughout the State of Texas for generations to come.”
Element Fuels has contracted with McDermott, to provide front-end engineering design services for the facility, including offsites and utilities.
“Building on our successful collaboration during early project phases, we believe we are uniquely positioned to leverage our expertise and knowledge to further support Element Fuels throughout the next stages of this unique project,” said Rob Shaul, senior vice president for low carbon solutions at McDermott.
“We remain focused on the delivery of low carbon pathway projects and are committed to advancing the landscape of energy production.”
Previous attempts
A Reuters news story says Calce has proposed the Brownsville project at least twice before – by his ARX Energy, and JupiterMLP startups, with one leading to a bankruptcy filing. The story says the project was originally owned by a holding company that also owned Centurion Terminals.
The story quotes John Auers, managing director of refining consultancy Refined Fuels Analytics.
“The hardest thing (for a new refinery) to get is financing,” Auers told Reuters, explaining that new refining projects could have a limited life with demand for gasoline expected to peak in 2030-2031, and for middle distillates such as diesel and jet fuel after 2040.
Element Fuels could turn its refinery into a petrochemicals plant down the road if such demand destruction occurs or export the refined products to countries with less electric vehicle adoption, Calce told Reuters.
The refinery is also designed with flexibility to produce various fuel grades, Calce added.
About Element Fuels
Element Fuels is a clean fuels producer advancing the energy transition through the development of a new hydrogen-powered clean fuels refinery in Brownsville, Texas. In development and planned to be operational in 2027, the Element complex in Brownsville will produce the cleanest fossil-based fuels in the United States, with near-zero CO2 emissions, utilizing the latest advanced technology from proven, best in class partners. Powered by world-class management and technology teams comprised of energy industry veterans, Element Fuels is setting a new standard for clean, green fuels production. To learn more, visit www.elementfuels.com.
Element Fuels’ website says the company’s management team has “over 100 years of combined experience leading multiple startups of chemical and refining facilities as well as major expansions.” The About Use page says: “We have successfully managed and delivered over $500 billion of complex capital projects, including individual greenfield development projects up to $40 billion.”
As for Element Fuels’ leadership, the website states: “With more than a century of combined experience in the chemical and refining industries, Element Fuels’ senior management is comprised of industry veterans who have successfully engineered, developed, and managed over $500 billion of complex capital projects, including individual greenfield developments of nearly $40 billion.”
As for its impact, the website says: “Element Fuels is focused on creating a positive impact on the environment, the community, and the local and regional economies.”
About John Calce
“As the founder and chairman of Element Fuels, my mission is to set a new standard for clean, green refining. Element Fuels is redefining refining to produce higher-quality, low carbon fuels that contribute to the energy transition and a more sustainable tomorrow,” Calce said, on his LinkedIn page.
“With over two decades of experience in creating, funding, and managing early-stage companies, my background spans a wide range of industries such as entrepreneurship, deals and strategy, finance, clean energy, education, and athletics. I’ve founded and grown ventures within these industries, i.e. an oilfield services company and a consulting and software company, and advised at broker-dealers such as Tritaurian Capital, Inc., facilitating transactions worth billions in the oil and gas sector. Today, as chairman and co-CEO of Element Fuels, I lead innovation in bespoke refining solutions.”
About McDermott
McDermott is a premier, fully integrated provider of engineering and construction solutions to the energy industry. Our customers trust our technology-driven approach engineered to responsibly harness and transform global energy resources into the products the world needs. From concept to decommissioning, McDermott’s innovative expertise and capabilities advance the next generation of global energy infrastructure—empowering a brighter, more sustainable future for us all. Operating in over 54 countries, McDermott’s locally focused and globally integrated resources include more than 30,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world. To learn more, visit www.mcdermott.com.
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