Oregon wants to be a hydrogen hub, but federal dollars make competition fierce

WESSELING, GERMANY – JULY 02: A general view during the inauguration of a green technology hydrogen production plant ‘REFHYNE’ at Shell Energy and Chemicals Park Rheinland on July 02, 2021 in Wesseling, Germany. The REFHYNE plant must produce sustainable fuel for aircraft. (Photo by Andreas Rentz/Getty Images)

Oregon and Washington have signed an agreement for a federally funded Pacific Northwest Hydrogen Center, and as we Previously reported, they now have a private company looking to compete with them. But that’s just the beginning of this story, and in 2023, Oregonians may hear a little more.

Across the country, states are making deals with neighbors or going on their own to seek billions of dollars in federal funding to set up “hydrogen hubs”, clustered centers for the production, storage and use of gas that many see as a crucial piece of the puzzle to decarbonize the US economy.

The extent of the role he should play, however, is a matter of debate.

The US Department of Energy is seeking to distribute $7 billion from the bipartisan infrastructure bill that could fundup to 10regional clean hydrogen hubs, defined as “a network of clean hydrogen producers, potential clean hydrogen consumers and nearby connection infrastructures” which will be established throughout the country.

“The H2Hubs will be a central driver in helping communities across the country benefit from clean energy investments, well-paying jobs and improved energy security – while supporting President Biden’s goal of a net-zero carbon economy by 2050,” the department said inA press releaselast month, calling the federal cash injection one of the largest in DOE history.

This mass of money joins the provisions of the Inflation Reduction Act – which has created a clean environmenthydrogen productiontax credit and enacted major changes incarbon capture tax credit– which could also stimulate hydrogen.

“Some states are going to be driven by climate goals. Hydrogen is an important tool in achieving these climate goals,” said Bryan Willson, professor of mechanical engineering and executive director of the Energy Institute at Colorado State University. “Others are really driven by economic development and hydrogen represents a tremendous new business opportunity.”

Willson is also the director ofRocky Mountain Alliance for Next Generation Energywhich is made up of universities and national laboratories from four western states that are providing technical support to the effort to create the Western Interstate Hydrogen Hub,a collaborationbetween Colorado, New Mexico, Utah and Wyoming, two red and two blue states.

Matt Fry, senior policy officer focusing on carbon management at the nonprofitGreat Plains Instituteand a former adviser to Republican Wyoming Gov. Matt Mead said even conservative states have understood the need to capture carbon and the obvious effects of climate change.

“We know that’s what we’re going to have to do,” he said. “We will use hydrogen to move from a more fossil fuel-based economy to a more electrified economy.”

Similar hub agreements have been concluded betweenLouisiana, Oklahoma and Arkansas;Minnesota, Montana, North Dakota and WisconsinandConnecticut, Massachusetts, New Jersey and New York. Minnesota and Wisconsin also have aprotocol of agreementwith Illinois, Indiana, Kentucky, Michigan and Ohio aiming to “accelerate and improve” clean hydrogen production. AndOregon and Washingtonare also collaborating on the creation of a Pacific Northwest hub.

Other states, likePennsylvaniaandGeorgiahave launched efforts to create their own hubs.

“Hubs try to focus on areas where you have resources to produce it, resources to use it, and resources to balance that supply and demand,” said Jeffery Preece, director of research and development at the Electric Power Research Institute.

“We are still working on where and how to deploy hydrogen in a decarbonized future. It is important to bring stakeholders together… to understand this. Focusing it on the hubs really helps to find the ways in which we face the limitations of infrastructure today. »

Why hydrogen?

There is a consensus that hydrogen, which releaseszero carbon emissionsonce burned, could be a major part of solving hard-to-decarbonize parts of the economy where electrification is not possible, includingdispatch,aviationheavy land transportlike the trainand industry, assteel industryand cement. Hydrogen fuel cells canmotorized heavy vehiclessuch as long-haul tractor-trailers that need more range than batteries can currently provide or hydrogencan be usedproduce fuels compatible with existing internal combustion engines.

It can also be mixed —until a certain pointcurrently — with natural gas to be burned in gas turbines for electricity generation. In what he called the biggest test of its kind, Georgia Powerreported in Junethat it was able to burn a 20% mixture of hydrogen in one of the turbines at its Plant McDonough-Atkinson natural gas power plant outside Atlanta, achieving a 7% reduction in CO2 emissions.

“We are probably the most aggressive state in terms of decarbonization. Along with that, we have growing storage needs, and hydrogen basically fills the gaps when the wind isn’t blowing and the sun isn’t shining,” said Willson of Colorado State University.

But the cleanliness of hydrogen depends on how it is produced. Currentlythe most hydrogenin the United States is produced by steam methane reforming via natural gas, the so-called ““grey” hydrogen. “Green” hydrogen is produced by an electrolysis process with clean energy. “Blue” hydrogen is derived from a fossil fuel but coupled tocarbon capturein which CO2 that would normally rise up a chimney or flue is filtered from emissions andstored undergroundalthough there are more and more efforts to findbeneficial usesfor this carbon.

There is very little green or blue hydrogen being produced right now, but Willson said the money for hydrogen hubs, production tax credits and the Department of Energy “hydrogen shotan initiative to reduce the cost of hydrogen produced from renewables from the current cost of around $5 per kilogram to $1 per kilogram over the next decade, could change that.

“Right now, there is no doubt that hydrogen from fossil resources is cheaper,” he said. “But as the cost of renewables continues to drop and the cost of hydrogen continues to drop, the case for green hydrogen is becoming quite compelling.”

Given this dynamic however, environmental groups are concerned that pushing to use hydrogen in scenarios in which renewable energy and electrification (such as fordomestic heatingand appliances like stoves) make more sense could end up extending the life of fossil fuels, especially natural gas.

“Generally, when it comes to hydrogen, we think there are good opportunities there and there are also very bad opportunities depending on how it’s implemented,” said Patrick Drupp, Sierra Club Deputy Legislative Director for Climate and Clean Air.

Drupp noted that political wrangling over the infrastructure bill has resulted in some constraints for the Department of Energy as it assesses proposals for hydrogen hubs.

“Some things have been mandated in legislation that we don’t agree with,” he said. “The DOE should focus on the things where hydrogen has the best possible results.”

For example,at least onehub must demonstrate the production of hydrogen from fossil fuels (with carbon capture), one must be from nuclear and the other must be from renewable energies. They must also be located in different regions of the United States “and must use abundant energy resources in that region, including at least two H2Hubs in regions with abundant natural gas resources,” the DOE documents say.

Building a large hydrogen economy, with its unique storage and transportation requirements, Drupp noted, will require expensive infrastructure such as new pipelines to handle the high concentrations of hydrogen mixed into the gas system. natural.

As of March, natural gas and electric utilities had proposed more than two dozen pilot projects related to the production and distribution of hydrogen for power generation, building heating or other uses, according to areportby Energy Innovation, Policy & Technology, a nonpartisan energy and climate policy think tank. Mixing hydrogen and natural gas for these purposes would do little to reduce greenhouse gas emissions and could “thwart more viable decarbonization pathways while increasing consumption costs, exacerbating pollution air and imposing security risks,” the report warns.

“There’s a lot of money there,” Drupp said. “The gas industry sees the writing on the wall and sees this as an opportunity to extend their industry.”

By Robert Zullo from Oregon Capital Chronicle

. oregon wants to become a hub hydrogen but the dollars feds make competition fierce

. Oregon hydrogen hub federal dollars competition fierce

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