The U.S. Department of Energy (DOE) is looking to clean up the hydrogen supply chain, and it is casting a wide net. Natural gas and nuclear energy are part of the plan, but green hydrogen from renewable resources clearly has the edge.
Hydrogen is an attention-getter as a zero-emission fuel for cars, trucks, boats, locomotives and other vehicles. However, hydrogen plays a far larger role in the global economy. Fertilizer, food processing, toiletries and pharmaceuticals are among its many other uses.
To avoid the worst impacts of climate change, the global economy must decarbonize the hydrogen supply chain. That would have been all but impossible just a few years ago, when natural gas was the primary feedstock for hydrogen production.
Most of the global hydrogen supply still comes from natural gas, but the picture has shifted in recent years. The game-changer is low-cost wind and solar power. With an economical source of zero emission electricity at hand, the global hydrogen economy is beginning to pivot towards electrolysis systems that push “green” hydrogen gas from water.
The Energy Department has been supporting research and development for the green hydrogen industry, and now it is taking the next step towards scaling up the commercial market. In June, the agency announced that it will provide $8 billion in funding to establish at least four Regional Clean Hydrogen Hubs around the country.
The program is funded through the Bipartisan Infrastructure Law, and there is a catch. As much as the Energy Department appears to prefer green hydrogen from renewable resources, the law stipulates supply chain diversity.
The Energy Department’s funding announcement specifies that “at least one H2Hub shall demonstrate the production of clean hydrogen from fossil fuels, one H2Hub from renewable energy, and one H2Hub from nuclear energy.”
Although the law only requires one gas-based hydrogen hub, it also includes a geographic diversity clause aimed at opening the door to a second gas-friendly hub.
“Each H2Hub will be located in a different region of the United States and leverage energy resources abundant to that region, including at least two H2Hubs in regions with abundant natural gas resources,” the Energy Department explains.
The Energy Department will begin accepting hydrogen hub proposals this fall. In the meantime, various states are already racing to get their proposals on the boards.
Pennsylvania, Ohio and West Virginia have already partnered up to propose a gas-friendly H2 hub with carbon capture. That makes sense in light of the considerable gas resources among all three states. Hydrogen production could also salvage plans for a new petrochemical hub in the Ohio Valley region. The Energy Department promoted the plan during the Obama administration, and it still has yet to be fully realized.
The Ohio Valley plan makes sense from the perspective of gas stakeholders. However, public opinion is working against natural gas, “clean” hydrogen or not. Part of the issue involves the powerful greenhouse gas methane, which escapes all along the natural gas supply chain from gas wells to transportation networks and storage facilities.
The potential for water contamination, as well other local environmental and health impacts, has also gathered more attention over the years. Among the documented impacts are an increased risk of low birthweight babies and childhood leukemia near gas fracking sites.
Given this dark backdrop, it is difficult to see growth in the market for gas-based hydrogen. Manufacturers are rushing to clean up their supply chains in response to consumer demand and sustainable policymaking. They are looking for ethical sourcing opportunities as well as decarbonization.
The Energy Department funding opportunity stipulates that successful H2Hub proposals will demonstrate a plan for economic viability that extends past the expiration date of their grant, and the emergence of competition from green hydrogen stakeholders could put a serious crimp in the Ohio Valley plans, and others like it.
Sitting cheek-by-jowl with the Ohio Valley region is the northeastern U.S., where massive offshore wind power resources could be called into play for green hydrogen production. Earlier this year, the coastal states of New York, New Jersey, Massachusetts and Connecticut joined forces to propose a green hydrogen hub. Maine and Rhode Island also joined as partners last week.
The northeastern hydrogen hub could also count on its nuclear fleet for an assist. Hydrogen and nuclear researchers have been investigating the potential for nuclear power plants to run more efficiently and economically under a grid scenario that includes more wind and solar, and green hydrogen production could help achieve that goal.
To be clear, the 2011 Fukushima nuclear disaster and Russia’s murderous rampage through Ukraine cast a long shadow over the safety and security of nuclear power plants. However, the possibility of shutting down all 90-odd of the remaining commercial reactors in the U.S. is a dim one, at least for the foreseeable future. In addition, the Bipartisan Infrastructure Law also stipulates a role for nuclear energy in the clean hydrogen hub program.
To the extent that nuclear power plants can help accelerate wind and solar development while taking an edge away from natural gas in the clean hydrogen field, the northeast H2Hub partnership appears to have a huge advantage.
That could explain why other hub partnerships are hedging their bets with green hydrogen, whether or not they have fossil resources in hand.
Earlier this year, for example, Colorado, New Mexico, Utah and Wyoming announced a new H2Hub partnership that aims to leverage the region’s ample wind and solar resources, along with biomass. The proposal does open the door to fossil sourcing with carbon capture, but the massive ACES green hydrogen and energy storage project in Utah indicates that the coalition is heading in a more sustainable direction — one that more closely aligns with the demands of today’s consumers and business stakeholders.
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Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.