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One major hurdle to building out the clean hydrogen industry is the absence of a federal hydrogen production regulation, permitting and siting agency.
The Biden administration's clean hydrogen goals are in a state of hurry up and wait. The industry is champing to get started, but there may be too many challenges to advance the president's dream of building out the U.S. clean hydrogen industry. The biggest issue may be the fact that with a possible change in administration next year, one that heavily favors fossil fuels, all progress may be reversed.
The fed wanted to prove it means business by setting aside $7 billion from the IIJA for the construction of seven clean hydrogen hubs around the country.
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The funding raises alarm bells where there is a lack regulation for transporting the clean fuel. These concerns may put the kibosh on the administration's plans.
Delivery of millions of tons of the gas from production to buyer will require a hard look at transportation, infrastructure and new pipeline construction.
According to Politico's energy and environment news site, in all likelihood trucks will be unable to move hydrogen to satisfy the expected demand.
"The possibility of hydrogen mixed with gas in existing pipelines is spurring fears of potential leaks, explosions and nitrous oxide emissions," reported eenews.net.
Plus, no federal agency is currently authorized to issue permits for interstate pipelines to carry clean hydrogen.
"Many states also don't have rules outlining who can issue permits for moving hydrogen within their borders," wrote Christian Robles.
The industry is hamstrung. A principal with research firm Rocky Mountain Institute said there is a "great degree of urgency" to start infrastructure planning.
Quick Implementation Needed
Like renewables or natural gas tied to carbon capture, making fuel out of low-carbon power is the end goal of clean hydrogen efforts.
But the DOE maintains that hydrogen infrastructure, including pipelines, calls for "a rapid scale-up" and $2 billion to $3 billion annual investment growth.
The agency believes that some $15 to $20 billion must be earmarked for clean hydrogen infrastructure needs by 2050 to meet fed goals. But in order to do that, experts say a more comprehensive assessment of fuel movement is critical.
"It's currently unclear how many miles of new pipelines are necessary and where they would be located," wrote Robles.
Details about production plants and potential buyers of the fuel processed are still in flux.
"We need to figure out where we're going to end up using hydrogen," said Dan Esposito, hydrogen policy analyst of Energy Innovation. "Because that'll have a huge impact on to what degree we want to rely on building pipes."
The fed wants to see 10 million metric tons of clean hydrogen produced annually by 2030. Current low-carbon fuel production is near zero, reported eenews.
Who Handles Permitting?
Another issue affecting the progress toward clean hydrogen is confusion surrounding the permitting process. No permitting agency currently exists.
The DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) handles hydrogen pipeline safety regulation. The agency also funds safety research and development projects for hydrogen.
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At the same time, it seems the Surface Transportation Board, whose primary function is railroads, may have little if any control over an energy pipeline.
"If the agency did have jurisdiction," said eenews.net, "it could potentially regulate rates and charges for interstate hydrogen pipelines."
With no federal agency permitting or siting pipelines, companies currently must go to each state for project permits.
States such as Texas, and the Dakotas have specified which agencies regulate hydrogen pipelines within their borders, but most have no such laws.
Other entities want a say in pipeline regulation. One faction wants to give the FERC the power to regulate. If that were to happen, federal eminent domain land rights would be granted to hydrogen pipeline developers, noted Politico.
FERC also would set quality standards for the concentration of hydrogen gas flowing through the nation's interstate pipelines.
Those against FERC authority believe the move could hamper industry development by saddling projects with costly regulations and delayed deadlines.
Not Sitting Idly By
Meanwhile, plans for the construction of DOE's hydrogen hubs are progressing.
A plan to connect hydrogen production facilities to glass manufacturing is being considered by the Midwest MachH2 Hub, reported Politico.
The Pacific Northwest Hydrogen Hub is considering building pipelines to complement transport trucks. And the Appalachian Regional Hydrogen Hub is assessing how existing natural gas infrastructure could be utilized for hydrogen delivery.
Houston, Texas, is positioning itself to host at-scale hydrogen production. The Gulf Coast currently produced 3.5 million tons of hydrogen annually. Home to the largest hydrogen pipeline in the country at more than 1,000 miles, the oil and gas region boasts three of the world's six salt storage caverns.
Houston is home to the country's largest renewable energy market, with 36 GW of wind power and 15 GW of solar. Hefty growth is predicted for the future. Plus, the region has a highly skilled energy workforce and more than 2 billion tons of CO2 storage capacity to draw on.
"The Gulf Coast is the most attractive region in the world to produce hydrogen," said Nikhil Ati, partner of consultancy group McKinsey.
Cheap feedstock, existing infrastructure, domestic consumption, existing expertise all make it attractive, he told Reuters news service.
"There are lots of reasons we remain very confident that, if there is to be a hydrogen industry at scale, it will happen out of Houston."
Houston's Gulf Coast HyVelocity Hub is one of the DOE's Regional Clean Hydrogen Hubs Program and envisions being one of the largest.
Seven sponsors — AES, Air Liquide, Chevron, ExxonMobil, Mitsubishi Power, Orsted and Sempra Infrastructure — are working on nine projects.
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These projects are focused on four demand areas: ammonia, petrochemical and refining, ground transportation and power and utilities.
"HyVelocity is building on many years of experience, decades of partnership," said Liz Dalton, hub executive director.
It's "taking positive advantage of an ecosystem and infrastructure that already exists and expanding upon it to meet emission reduction goals," she said.
Regional hub programs come as bills circulate in Congress to boost funding for clean hydrogen infrastructure.
Early this year, efforts to create a program of grants and loans to help build out the industry were put forward.
Last summer, DOE worked other agencies to establish a working group for infrastructure, siting and permitting.
The Hydrogen Interagency Task Force is a collaboration created to support the clean fuel's production.
DOE announced plans to earmark part of a $59 million grant to hydrogen projects that propose solutions to siting and permitting challenges.
"We're looking holistically as to where could there be large demand and then focus some of the infrastructure there," said Sunita Satyapal of DOE.
Earlier in May, DOE's Loan Programs Office (LPO) made a conditional commitment to Plug Power Energy for a $1.66 billion loan guarantee. The loan will help finance the construction of six facilities across seven states to produce clean hydrogen with the company's electrolyzer technology.
Advancing clean hydrogen is a key component to building a robust clean energy economy, said Jigar Shah, LPO director.
The effort "creates healthier communities, strengthens energy security and delivers new economic opportunities across the nation."
Shah said it also helps unlock the full potential of a "versatile" fuel and supports the growth of strong industry.
Once finalized, the loan program will result in the creation of 100 to 300 jobs during construction and 50 new jobs at each location.
"Together with the Regional Clean Hydrogen Hubs, this announcement will help strengthen local economies," said Shah.
It will "create and maintain high-quality jobs," and "reduce greenhouse gas emissions in sectors critical to meeting U.S. net-zero goals."
Finally, he added, it will "enhance America's manufacturing and industrial competitiveness.
The program will facilitate build-out of clean hydrogen facilities in several potential locations across the country to supply end-to-end clean hydrogen at scale.
"This conditional commitment advances Pres. Biden's efforts to strengthen domestic clean energy supply chains," said Shah.
These supply chains are essential to meeting the nation's ambitious climate goals and enhancing national and energy security, he said.
"If finalized, the project will support an integrated and resilient commercial scale clean hydrogen fueling network across several regions."
The fuel generated is expected to power fuel cell-electric vehicles used in material handling transportation and industrial sectors.
As a result, an estimated 84 percent reduction in greenhouse gas emissions compared to conventional hydrogen production is anticipated, said Shah.
"What you see is a strong need for hydrogen," said Neil Navin, senior vice president of SoCalGas. "We need production to begin and we need off-takers."
Other companies are moving forward without the fed's blessing. Offshore Wind Power Systems of Texas, a wind and water desalination company, is one.
Doug Hines, president, said the company has financing and insurance deals already agreed upon but will accept federal dollars if they are offered.
He told Reuters that the OWPST can have hydrogen production of 1,000 tons a day within 60 months of an order.
Approximately 24 to 30 months of that timeframe is spent ordering the necessary electrolyzers, said Hines.
"It's taken us about 20 years to get to this point, and it's been blood, sweat and tears all the way," he said. "Because of that, we're competitive without the subsidies and we're bringing our product to the market right now." CEG
Lucy Perry
Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.
Read more from Lucy Perry here.
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