Brian McCowan, Zondits staff, 11/7/2023
The Biden administration is making good on its pledge to invest billions in “clean” hydrogen, with the announcement of $7 billion in awards for regional hydrogen hubs. The funding was included in the 2021 Infrastructure Law to establish multiple regional hubs to produce hydrogen for fuel, agricultural, and industrial uses. States and regions were invited by the DOE to compete for the funds.
Seven regional hubs with projects spanning 16 states were officially announced in mid-October. The awarded entities have proposed using the funds to generate an additional $40 billion in private investment.
President Biden announced the awards on October 13 at a cargo terminal in Philadelphia, stating, “I made it a goal for our country to get to net-zero emissions from pollutants no later than 2050.” He promoted hydrogen as a critical supplement for renewable wind and solar, and a key to clean power for heavy industry and shipping. “That’s where hydrogen comes in; using hydrogen, you can power industries like the production of steel and aluminum. It’s going to end up changing our transportation system. That lets us get to this place without putting more carbon in the atmosphere.”
The $7 billion awarded for the hubs accounts for the vast majority of the $9.5 billion in funding for hydrogen projects authorized by the Infrastructure Law. Twenty-two proposed hubs competed for the seven final awards.
The selection of the hubs is not without controversy, both on political and environmental grounds.
According to the DOE, the hubs will include:
- An Appalachian hub, located across West Virginia, Southeastern Ohio, and Southwestern Pennsylvania. This hub will be the largest producer and will derive hydrogen from the region’s natural gas. Consortium members include natural gas producer EQT, gas and electric utility Dominion Energy, industrial gas producer Air Liquide, chemical producer Chemours, and hydrogen fuel-cell manufacturer Plug Power.
- A California hub was awarded to the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), a public-private consortium with more than 400 members. Proposed projects will span the state and encompass the ports of Long Beach, Los Angeles, and Oakland.
- The Texas-based HyVelocity Gulf Coast Hydrogen Hub includes Chevron, Air Liquide, offshore-wind-power developer Ørsted, and Sempra Infrastructure, a developer of LNG terminals and gas pipelines. The Gulf Coast hub proposes becoming the largest producer of blue hydrogen from carbon capture as well as green hydrogen produced with renewable energy sources.
- The Heartland Hydrogen Hub, which spans Minnesota and North and South Dakota, includes the utility Xcel Energy and Marathon Petroleum. It is partnering with Canadian pipeline operator TC Energy. The hub plans to produce hydrogen using electricity from wind farms and Excel’s Prairie Island nuclear power plant. The hydrogen produced is planned for both electrical generation and fertilizer production.
- The Midwest Hydrogen Hub will span parts of Illinois, Indiana, and southwest Michigan. It plans to use hydrogen for power generation, heavy-duty transportation and sustainable aviation fuel, and the production of steel and glass. Nuclear power will provide a significant share of the electricity to produce hydrogen from this hub, according to the DOE. Two groups, the Midwest Alliance for Clean Hydrogen (MachH2) and the Midwest Hydrogen Corridor Consortium (MHCC), lead this large consortium which includes Air Liquide, British Petroleum (BP America), steelmaker ArcelorMittal, power electronics firm BorgWarner, fuel-cell maker Bloom Energy, gas and nuclear power plant owner Constellation, manufacturers Cummins and Rolls-Royce, and utilities Ameren and NiSource.
- A Pacific Northwest hub will span parts of Washington, Oregon, and Montana and will focus on hydrogen fuel for freight and fuel and fertilizer for agriculture. Unlike the other hubs, the intent is to make hydrogen using exclusively renewable energy. Members include Amazon, BP America, Plug Power, Australian mining and hydrogen developer Fortescue, and multiple investor-owned and public utilities.
- The Mid-Atlantic hub is where Biden delivered his remarks. In addition to Pennsylvania, the Mid-Atlantic hub will include projects in Delaware and New Jersey and will make hydrogen through electrolysis using renewable energy sources such as wind and solar, as well as nuclear power. The consortium includes DuPont, Air Liquide, utility and pipeline company Enbridge, refiner PBF Energy, Philadelphia’s gas utility PGW, and public transit systems in Delaware and Pennsylvania.
A portion of the funds will be available for initial project planning. The remaining funds will become available as the projects progress and milestones are reached, according to DOE officials. Similarly, the private funding proposed will be contingent upon project progress and may take some time to materialize.
According to reporting from multiple news outlets, reactions to the hydrogen hub awards have been mixed. On political and economic development fronts, the awarded consortium member firms and organizations are enthusiastic. Others, however, express concerns over a lack of transparency in the selection process and what they see as a pattern of funding awarded in political battleground states.
On environmental fronts, climate activists are expressing some disappointment that a larger percentage of the funds is not earmarked for hydrogen fuel projects and/or hydrogen produced through electrolysis powered by renewable energy. The administration counters that the funds were always intended to include a variety of hydrogen production methodologies and a variety of end uses, including the production of agricultural and industrial products.
According to reporting by the Associated Press (AP) Environmental groups are concerned that while hydrogen is a clean-burning source of power, it takes a great deal of energy to produce, and when made with electricity from coal or natural gas, it has a bigger carbon footprint than simply burning the source fuel. “We need strong guardrails to ensure that U.S. hydrogen does not create an emissions mess, and that we are not subsidizing hydrogen that is clean in name only,” said Erik Kamrath, the federal hydrogen advocate at the Natural Resources Defense Council.
Anna Menke, senior hydrogen hubs manager at Clean Air Task Force, told AP that the new hubs are “a critical first step” and “potential game changers” to reduce emissions from carbon-intensive industries such as ammonia used for fertilizers and petrochemicals, and new uses of hydrogen in trucking, shipping, and aviation. “We must ensure the program delivers on these promises.”
At a DOE press conference, administration officials stated that all seven hubs will produce at least some hydrogen using renewable energy. But that most will also convert fossil gas to hydrogen using carbon-capture technology to limit emissions and three will also use nuclear power. Renewable energy, carbon capture, and nuclear power were all mandated to be included in the funding, according to the enacted legislation. The DOE estimates that the hubs will eliminate 25 million metric tons of carbon dioxide emissions per year and is encouraging the hubs to follow “best practices” to reduce methane leakage from fossil gas hydrogen production. Methane leaks are also targeted in other administration climate action programs.
According to a comprehensive piece in Canary News Media, there is a mix of opinions as to the focus of the hydrogen hub projects. Aaron Bergman, a fellow at the non-profit research group Resources for the Future who previously worked at DOE and the White House, told Canary, “In my mind, the hubs are less about how much emissions will be reduced by the individual hubs and more about demonstrating new technologies. I see the role of the hubs as providing government funds to guide the development of these technologies so that the private sector can take on the risk of investing in them.”
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