Friday Focus:  Many Were Called, Few Were Chosen – Regional Hydrogen Hubs

In Home, News by wp_sysadmin

Today’s Key Takeaway: Biden administration accelerates hydrogen industry while Green groups push back on the program. 

Major investment for regional hydrogen hubs
Clear Path Action, October 13, 2023

Seven new public-private partnerships spanning 16 states will receive $7 billion in funding for the DOE’s Regional Clean Hydrogen Hubs program (H2Hubs), which was created by the bipartisan infrastructure law.

  • The seven chosen hubs will attract approximately $40 billion in private funding,
  • A combined public and private investment of nearly $50 billion that will reduce emissions across sectors of the U.S. economy including power, industry, building heating, and transportation.
  • Combined, they’ll create more than 330,000 direct jobs and produce 3 million metric tons of clean hydrogen a year.
  • Total emissions reductions could be the equivalent of over 5.5 million cars.

What’s clear: “Today’s energy and national security crisis is driving calls for increased American energy leadership,” said Rich Powell, CEO of ClearPath. “Accelerating the hydrogen industry forward with these hubs allows the U.S. to leverage domestic energy resources while reducing emissions.”
The seven hubs include:

  • Appalachia – Appalachian Regional Clean Hydrogen Hub (ARCH2): $925 million for regional natural gas with carbon capture and storage (CCUS) to produce hydrogen, new hydrogen pipelines, and hydrogen fueling stations across western Pennsylvania, Ohio, Kentucky, and West Virginia.
  • California – Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES): $1.2 billion for renewable and biomass hydrogen production, heavy-duty trucking, and port operations in California.
  • Gulf Coast – HyVelocity Hydrogen Hub: $1.2 billion for regional natural gas with CCUS and renewable hydrogen production to benefit local industry in Texas.
  • Heartland – Heartland Hydrogen Hub: $925 million to create clean fertilizer for the agricultural sector as well as use clean hydrogen for electric generation and space heating in Minnesota, North Dakota, and South Dakota.
  • Mid-Atlantic – Mid-Atlantic Clean Hydrogen Hub (MACH2): $750 million for renewable- and nuclear-powered hydrogen production in Pennsylvania, Delaware, and New Jersey.
  • Midwest – Midwest Alliance for Clean Hydrogen (MachH2): $1 billion for renewable, nuclear, and natural gas hydrogen production for use in steel and glass manufacturing, power generation, refining, heavy-duty trucking, and sustainable aviation fuel in Illinois, Indiana, and Michigan.
  • Pacific Northwest – Pacific Northwest Hydrogen Hub (PNW H2): $1 billion for renewable-powered hydrogen production in Washington, Oregon, and Montana.

What’s next: The U.S. Department of Treasury must issue guidance on the 45V Hydrogen Production Tax Credit that complements these public-private partnerships and further enables hydrogen as a clean energy solution across the American economy.

From the Washington Examiner, Daily on Energy: 

HYDROGEN HUB HEADACHE: The Biden administration announced on Friday they would grant $7 billion to fund seven regional hydrogen hubs across the country — projects that will accelerate the use of the odorless gas as an energy source for vehicles, manufacturing, and more, Nancy reports. However, green groups are already pushing back on the program, arguing that some of the projects don’t actually reduce emissions and could actually run down a slippery slope towards polluting communities and raising energy prices.

Green groups are already weighing in on the announcement, finding fault with the administration funding hydrogen powered by processes such as natural gas and marketing it as “clean.”

Only two projects are expected to use renewable sources exclusively to power operations — the California hub and the Pacific Northwest hub.

Ben Jealous, the executive director of Sierra Club, issued a word of warning to the administration: don’t be fooled by the oil and gas industry’s attempt to prolong their operations.

“The fossil fuel industry is working to continue our nation’s reliance on fossil fuels by any means necessary – and hydrogen offers yet another possible inroad for Big Oil and Gas to lock in polluting and non-economic uses of gas for decades to come,” Jealous said in a written statement. “Decision-makers in the administration and at the local level must be wary of these attempts and ensure as much hydrogen-specific funding as possible goes to green hydrogen and its most efficient end uses to ensure this investment actually addresses climate change.”

A bit of background: “Green hydrogen” is produced using renewables such as solar and wind — and less than 1% of hydrogen is now produced through this method. However, hydrogen that is created from natural gas is considered “grey,” while “blue hydrogen” is created through the same process but is coupled with carbon capture and storage. “Pink” hydrogen is powered by nuclear.

Marion Gee, the co-executive director at Climate Justice Alliance, called the projects a “corporate scam” that could further pollute local communities and “present a safety risk in transit.” There has been public debate on the safety of transporting hydrogen, with many asserting that hydrogen is seen as more hazardous than natural gas.

Local groups are also raising concerns with the buildout of the hubs in their states. The Ohio River Valley Institute, a left-of-center think tank, stated that the buildout of the Appalachian Regional Clean Hydrogen could yield “little economic or climate benefit” – and instead, may actually raise energy costs for families.

However, a number of lawmakers are praising the administration’s hydrogen projects – including members from across the aisle. GOP Sen. Shelley Moore Capito, the ranking member of the Senate Environment and Public Works Committee, called the project a “major win” for energy production in West Virginia.

Looking ahead: President Joe Biden will name the winners during his trip to Philadelphia later this afternoon, where he’s expected to tout the bipartisan infrastructure bill that paid for the project. The Regional Clean Hydrogen Hubs program, which allocates $8 billion total toward clean hydrogen production and use, will finance projects that are estimated to produce 3 million tons of hydrogen per year, or nearly one-third of the country’s 2030 clean hydrogen production goal.

“With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities in every pocket of the nation,” Energy Secretary Jennifer Granholm said in a written statement.