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Is This the Beginning of a Hydrogen Economy in the U.S.?

The Bipartisan Infrastructure Law gave the Department of Energy billions to invest in clean hydrogen hubs. There’s broad agreement hydrogen is needed for the energy transition, but not about how it should be produced and used.

An airplane flying over a city as seen from directly underneath it.
Hydrogen fuel for aviation could decarbonize air travel, a major — and so far intractable — source of CO2 emissions.
This summer, the U.S. Department of Energy (DOE) is expected to publish a road map for an $8 billion investment to help develop at least four regional clean hydrogen hubs. The funding was included in the energy provisions of the Bipartisan Infrastructure Law (BIL).

The exact timing for proposal submissions and awards has not been announced, but the program is expected to move forward across fiscal years 2022-2025. Current plans call for five to 10 planning grants followed by a smaller number of deployment grants — deployment funds from DOE will need to be matched by grant recipients.

This isn’t the first time the federal government has put forward a vision of a “hydrogen economy,” a term first used in 1970 to describe a society running on energy from solar- and nuclear-generated hydrogen. In his 2003 State of the Union address, George W. Bush announced a $1.2 billion investment in research to make the U.S. the world leader in hydrogen-powered vehicles.

Funding for that program was cut by the Obama administration. Nobel laureate Steven Chu, the Secretary of Energy at the time, said the decision was based on an assessment that even within 20 years, a transition to a hydrogen car economy was not likely.

Federal support for hydrogen R&D dropped over the last decade, but pressure to reduce greenhouse gas emissions has increased continuously and hydrogen technology has continued to advance.

Today, there is worldwide recognition that “to get to the next level of decarbonization, you need hydrogen as a fuel resource and as a storage medium,” says Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association (FCHEA).

According to Goldman Sachs, the present “unprecedented momentum” could lead to a 400-fold increase in global clean hydrogen capacity in this decade, and a $250 billion market by 2030.

“It’s more than just a hydrogen ‘moment,’ it’s the starting point of a trend,” Wolak says. “Investment is tracking that, not just waiting for government money.”

At present, hydrogen energy use by industry accounts for about 1 percent of energy consumption in the U.S., and less than 5 percent comes from clean sources. Wolak views the DOE funds for the hubs as a “deposit” that will enable technology innovation, demonstrate an expanded range of uses for clean hydrogen, and fuel more private investment.
(Carbon Brief)

Tackling Tough Decarbonization Challenges

The hubs could act as a catalyst for running everything from home heating and fueling automobiles to power generation and industrial processes. The BIL mandates at least one hub demonstrate the use of hydrogen in the power sector, one in the transportation sector, one in the industrial sector and one in the residential and commercial heating sector.

Some applications have greater support than others from energy analysts and climate scientists. “The business case lines up better when you are offsetting the greatest number of hard-to-decarbonize sectors, applications with large, scalable ability to introduce hydrogen in industries that are fossil fuel intensive and can’t decarbonize otherwise,” says Wolak.

Hydrogen can power industrial processes with high energy needs and, if produced using renewable energy, decarbonize a sector that accounts for 24 percent of U.S. greenhouse gas emissions. Taken together, airplanes and container ships account for almost six percent of global CO2 emissions. Developing hydrogen fuel for them and the infrastructure to deliver it would end these emissions. When solar and wind sources create more electricity than the grid needs, it can be used to make hydrogen that is stored for long periods and burned in gas turbines to make more electricity when it is needed.
Container ships outside the Ports of Los Angeles and Long Beach waiting to unload on Oct. 13, 2021.
Hydrogen fuel could decarbonize maritime shipping, a sector of the economy that accounts for 3 percent of CO2 emissions.
(Carolyn Cole/TNS)
Dan Esposito, senior policy analyst at Energy Innovation, says his biggest worry is that too much money will be spent trying to use hydrogen for home heating, which does not appear to have much potential to reduce emissions before running into some big challenges.

In meeting home energy needs, only green hydrogen — the purest form of hydrogen production — would have a carbon footprint comparable to that of renewable energy. But Energy Innovation’s Assessing the Viability of Hydrogen Proposals report says it is 14 times more expensive than current energy sources. Existing gas appliances and industrial equipment can only handle a gas mix that contains about 20 percent hydrogen mixed with natural gas, says Esposito.

“If your plan is to really lean on hydrogen, eventually you’re going to have to replace every appliance on that distribution system with one that can burn any combination of hydrogen and natural gas, which would be a whole different type of technology than we have available today,” he says.

Electrification of passenger vehicles and buildings has gained considerable momentum and funding in recent years, with the potential for interoperable storage and supply resources for electrical grids. A report from the think tank supporting Germany’s energy transition expresses certainty hydrogen won’t keep electrification from winning the day on building energy, warning that gas distribution grids “need to prepare for a disruptive end to their business model.”

“I don’t think we want to go down a road where we spend 10 to 20 years doing research and demonstrations that get nowhere while other jurisdictions are achieving their net zero goals through electrification,” says Esposito.
carbon hubs.jpg
The Great Plains Institute identified 14 potential sites for hydrogen hubs based on factors including concentrations of emissions, availability of fossil fuel, potential for geologic storage of hydrogen and existing transportation and fuel distribution infrastructure.

Siting Hydrogen Hubs

In early 2022, the nonprofit Great Plains Institute (GPI) published an atlas of maps highlighting existing factors in regions around the country that could make them candidates for hydrogen production hubs.

GPI identified 14 potential hubs in the U.S. based on factors including existing concentration of industrial emitters, availability of fossil fuels, availability of tax credits for carbon capture retrofits, current hydrogen and ammonia production, potential for geologic storage of hydrogen, and existing transportation and fuel distribution infrastructure.

The maps were not meant to capture every opportunity. “Since industrial production and emissions occur throughout the country, carbon capture, hydrogen production and direct air capture facilities will need to be deployed wherever beneficial and feasible,” said GPI in releasing the atlas.

New Jersey, Connecticut, Massachusetts and New York signed an agreement in a step toward hub development. With backing from U.S. Senators Joe Manchin and Shelley Capito, West Virginia is working on a proposal, as is a public-private group from the same region that would build on resources from Ohio, Pennsylvania and West Virginia.

Other contenders for DOE funding could include the HALO hub coalition in Louisiana, Arkansas and Oklahoma; a Gulf Coast hub in Texas; projects in both Northern and Southern California; and independent hubs in Washington, Arizona, Illinois, Nebraska and Kentucky. A hub being co-developed by Utah, New Mexico, Wyoming and Colorado would be built around a project in the Utah desert that aims to be the largest green hydrogen production and storage facility in the world.

Pennsylvania state Rep. Steve Malagari is working to clear a path for his region, introducing H.R. 178, a resolution calling for Congress and the Biden administration to designate the southeastern region of his state as a hydrogen hub. “I was simply urging the Biden administration to utilize the southeast of Pennsylvania because of our existing infrastructure for natural gas,” he says, noting that it’s also home to nuclear energy resources.

Malagari sees an opportunity to power trains in the northeast corridor with hydrogen and long-haul trucking, a focus that reflects his roots as a Teamster. “Private company conversations are already occurring,” he says. “If the designation were to go through, I think people would jump on board.”
Energy from exisiting nuclear power plants could be used as a CO2-free means of producing hydrogen.
(PPL Susquehanna/Nuclear Regulatory Commission/TNS)

Mining a Vast Resource

Hydrogen is an abundant gas, accounting for about 90 percent of all atoms in the universe, and 75 percent of detectable matter. Hydrogen can be made available as an energy source by separating it from the methane released when coal or natural gas are burned, or from the oxygen in water. Various colors have been assigned to hydrogen produced from differing energy sources and chemical processes.

Almost all hydrogen production in the U.S. is currently accomplished by “steam reforming,” a process that involves burning natural gas and using steam to catalyze a chemical reaction that produces hydrogen and CO2. This is “grey” hydrogen. If the production process incorporates a system to capture CO2 emissions, the product is “blue” hydrogen.

Hydrogen produced using renewable energy to split water with electricity (hydrolysis) is known as “green” hydrogen. If nuclear energy is used to power hydrolysis, the result is “pink” hydrogen. (There are other colors included in the hydrogen “spectrum,” but these are most central to discussions regarding clean hydrogen in the U.S.)

While there’s broad agreement that hydrogen has a place in a zero-carbon economy, energy analysts warn that not all hydrogen is created equal and not every end use has equal benefits. Rather than achieving net emission reductions, some approaches could tip the scale in the other direction.
The “colors” of hydrogen denote the energy source for producing hydrogen and the process used to release hydrogen. Carbon capture for “blue” hydrogen production is an evolving technology, without set standards. Blue and gray hydrogen also involve methane emissions both upstream and at the site of production. Other colors exist in this spectrum, but these are central to clean carbon discussions in the U.S. 

Can Blue Be Green?

The BIL calls for at least two of the hubs to be in regions with the greatest natural gas resources. It does not specify that these resources must be used to make “blue” hydrogen, but climate activists are worried.

Daniel Savery, senior legislative representative for Earthjustice, hopes that DOE will “resist the temptation” to invest heavily in hydrogen projects that use fossil fuels. “There are projections that the cost of green hydrogen will be at parity with blue hydrogen in the next five to 10 years,” he says. Facilities built for hydrogen production with natural gas could become stranded assets.

One solution to this problem would be to capture carbon and store it underground. The notion that carbon capture can turn grey hydrogen production “blue” is more concept than reality, however. In 2021, scientists at Cornell and Stanford made the first peer-reviewed attempt to calculate the carbon footprint of blue hydrogen.

At that time, only two facilities in the world were producing blue hydrogen at commercial scale. The results were not promising in terms of carbon capture efficiency. Blue hydrogen also involves methane emissions from gas mining, pipeline leakage and at the production site, as well as CO2 emissions from the energy used to make hydrogen and power carbon capture.
A hydrogen fueling station in Orange County, Calif.
Hydrogen fueling stations in Orange County, Calif. Hydrogen passenger vehicles face tough competition from EVs, which also have the potential to serve as resources for the electric grid. Heavy-duty vehicles using hydrogen fuel might be more competitive.
(Carolyn Cole/TNS)

Too Tiny to Contain

Hydrogen may be a no-emission fuel, but evidence is accumulating that hydrogen leaks during production and transmission can contribute to warming. A paper from scientists at the Environmental Defense Fund (EDF), to be published in Atmospheric Chemistry and Physics, urges greater attention to their warming potential.

“We’ve found that hydrogen has significant climate impacts that at this point are widely overlooked and underestimated,” says Morgan Rote, senior manager of U.S. climate at EDF. “The hydrogen molecule is really small and slippery — it’s hard to contain and has large potential to leak out of pipelines, storage tanks, and other parts of the supply chain.”

Increased hydrogen levels in the atmosphere could contribute to warming in several ways, including increasing the atmospheric lifetime of methane and raising ozone levels and concentrations of water vapor. An April policy paper published by the U.K. government observed that any leakage of hydrogen will have an “indirect warming effect on climate, partially offsetting some of the climate benefits of the reduction in carbon dioxide.”

The potential for leakage needs to be considered in infrastructure plans, says Rote. “We need to build in measurement, reporting and verification systems to be able to detect the leaks, to report leakage rates and then verify that we’re doing things to reduce them.”

Sensor technologies are being developed that can make this possible, she says. Federal funds could speed their implementation as well as research to refine them, eventually bringing their cost down. “I think it’s a really exciting opportunity.”

Beyond Paper Talk

The DOE solicited input from stakeholders to help guide the regional hub program, with governments, research organizations, companies and nonprofits providing responses. When the road map is published this summer, it will be possible to see how these comments might have shaped what it is looking for in funding proposals.

“We’re still building up our renewable energy capacity, and we don’t want green hydrogen to sort of cannibalize that market,” says EDF’s Morgan Rote. “Investing in wind and solar resources is not only the No. 1 priority for grid electrification, it also enables green hydrogen production.”

Energy Innovation’s Esposito doesn’t deny that hydrogen can play an important role in net zero economy plans but advises state and local officials to ask questions and do research about use cases for hydrogen that are proposed for their communities, including how what is being put forward compares to other decarbonization strategies. “It’s really important to compare these things on their merit, side by side, rather than just going with something because it sounds like it’s decarbonizing.”

Interest in hydrogen as an energy source has waxed and waned over the decades, according to FCHEA’s Wolak. Thirty years ago, there was a lot of talk about hydrogen, but climate wasn’t an issue as it is today. In the past 10 years, as climate problems became more urgent, hydrogen has re-emerged as a potential tool to fight change.

“My hope is that the sum total of all the hubs are able to demonstrate scale and the ability to drive down cost,” says Wolak. “That’s a very encouraging starting point for fall-on investments, versus a lot of applications that just show improvements in technologies.”
Carl Smith is a senior staff writer for Governing and covers a broad range of issues affecting states and localities. He can be reached at or on Twitter at @governingwriter.
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