Biden announces huge investment in hydrogen. How much will it help the climate?

PHILADELPHIA – President Joe Biden traveled to a marine terminal here on Friday to announce billions in funding for new clean hydrogen projects that he said will help the country meet its climate goals while generating thousands of new, high-quality jobs. Surrounded by rows of shipping containers on a dock along the Delaware River, Biden positioned the program as an important part of his economic and climate programs.

“The investment we make today will be for our children and grandchildren,” Biden said. “Today’s announcement is transformative.”

The announcement included up to $7 billion in grants for seven hydrogen “hubs” across the country, including two in Pennsylvania, and represents the biggest move yet in a controversial pillar of the president’s climate agenda.

Many advocates and policy experts say the new clean hydrogen industry could, if well designed, play an important role in reducing climate pollution from sectors of the economy that don’t have good low-carbon alternatives, such as steelmaking, fertilizer production and aviation. But some of these same experts warn that without the right guardrails, expanded use of hydrogen could also undermine climate goals and expand dependence on fossil fuels while costing the government hundreds of billions of dollars in subsidies.

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“It’s really imperative that we get it right,” said Morgan Root, director of US climate policy at the Environmental Defense Fund. She added that the center’s announcement this week, combined with the tax break Congress passed last year, will throw a huge amount of public money at technology, “and there are a lot of ways we can get off track.”

More importantly, Root and other experts say, the ministry has not yet published enough information about hydrogen centers to determine whether the necessary guardrails are in place. It is even possible, according to one analysis, that some centers will fail to meet the Department of Energy’s own definition of “clean hydrogen.”

“They seem to have the right goals and objectives,” Root said of the department. “To what extent the projects actually align with that I think remains to be seen.”

The seven centers are spread across the country, supported by a range of industries, universities, and local and state governments, and will aim to produce nearly 3 million metric tons of hydrogen annually by 2030, or a third of the Biden administration’s goal. The administration said the centers would eventually eliminate 25 million metric tons of climate pollution annually, equivalent to the emissions of about 5.5 million cars, but it released few details that would allow experts to evaluate that estimate.

While the total emissions reductions are relatively small, less than 1% of the country’s total of more than 6 billion metric tons annually, the goal of these centers is to test the technology and provide a model for a larger industry. If the effort succeeds, the new production tax credit could provide much greater support to companies building clean hydrogen projects, by the tens or even hundreds of billions of dollars over a decade.

The answer to whether hydrogen will help meet climate goals will depend on a range of questions, some of them highly technical, about how the fuel is produced and where it is used.

Hydrogen burns without generating climate pollution, which means it can replace fossil fuels in a number of applications. But producing it requires pulling it from other molecules, usually either methane from natural gas, or water. Both processes require large amounts of energy.

To make it “clean,” this energy must come from a low-emission source, such as wind or solar energy. Many oil and gas companies are also trying to use equipment that would capture and store carbon dioxide emissions that are released when hydrogen is separated from methane.

Of the seven announced hubs, at least three of them will use natural gas and carbon capture. Many scientists and environmentalists have warned that making so-called “blue hydrogen” may fail to meaningfully reduce emissions, and in some circumstances may lead to increased climate pollution. One problem comes from natural gas leaks, which consist primarily of methane, a greenhouse gas that traps 86 times more heat than carbon dioxide over a 20-year period. If leaks from drilling and delivering natural gas to a hydrogen plant are too high, they could outweigh the benefits of capturing carbon emissions and replacing fossil fuels with hydrogen.

Another question is whether companies will be able to achieve the success they claim they can through carbon capture. Until now, there have been no commercial-scale projects that remove the high levels of carbon dioxide needed to make blue hydrogen actually qualify as clean.

In a report published last month, the Institute for Energy Economics and Financial Analysis, which has criticized carbon capture technology, warned that the Energy Department’s modeling of emissions from blue hydrogen was wrong. One problem they identified was that the department’s models assumed that methane leaks were much lower than most scientific studies indicate.

If projects use these default assumptions, rather than providing information about their projects’ leaks, it could make projects appear to meet the “clean” threshold when their true emissions are much higher.

The Department of Energy declined to answer a question about whether it would require applicants to provide information about their projects’ methane leaks.

The Department’s publicly available information to applicants said it “encouraged” projects to use project-specific data when estimating greenhouse gas emissions, but did not require them to do so, and said it would rely on assumptions in its models in the absence of specific parameters. Information.

Even if the projects were able to clean up methane leaks and capture almost all of the carbon dioxide they pollute, they would still stimulate more drilling and hydraulic fracturing for natural gas, processes that have been linked to numerous health impacts on people living near development areas, including That’s high oil prices. Incidence rates of some types of cancer.

One of the largest blue hydrogen proposals came from ExxonMobil, which said it plans to build a large blue hydrogen plant at its Baytown refinery and petrochemical complex near Houston. Exxon is part of a consortium of companies, including Chevron, that is behind a Gulf Coast hydrogen center for which the Energy Department received up to $1.2 billion. Oil companies, which own huge natural gas assets, have been big supporters of the idea of ​​government investment in hydrogen technology, which could give them a market for their products in a climate-constrained future.

The center can be particularly problematic when it comes to greenhouse gas emissions because some of the highest rates of methane leaks in the country are in the nearby Permian Basin.

A Gulf Coast Center spokesperson did not respond to questions in this article about where the natural gas comes from, what rates of methane leakage it expects to be, or whether it will provide specific data to the Department of Energy or instead rely on national data. Default average. The project said it will also produce hydrogen using renewable energy.

However, many local environmental groups are unhappy with this news.

“We are extremely disappointed by today’s announcement of hydrogen centers,” Elida Castillo, program director for CESPA Texas, a chapter of the League of Conservation Voters, said in a statement. “While we appreciate the recognition of the climate crisis, we cannot support initiatives that benefit the same industries that got us here and that demand questionable emissions reductions. Our frontline communities, which already bear the brunt of the costs to our health and environment, must be the beneficiaries of those The $7 billion instead, Congress misdirected that taxpayer money.

A group of companies forming a hydrogen hub in Appalachia have secured nearly $1 billion and will also use carbon capture and natural gas. It will achieve a “production-weighted average” of 1.15 kilograms of carbon dioxide equivalent emissions for every kilogram of hydrogen it produces, Hub spokeswoman Aria Hines said. She added that this number could include a certain amount of hydrogen produced with renewable energy.

This would put it well below the ministry’s definition of “clean”, or 4 kilograms of carbon dioxide equivalent for every kilogram of hydrogen. It would also put it well below the ministry’s estimates of what the blue hydrogen project should achieve, and would imply a marked reduction in the rate of methane leakage and roughly lower overall carbon sequestration rates.

Haynes declined to say whether the center’s estimate would be based on direct measurements, rather than modeling, or whether it would make its methodology publicly available and independently verified, all of which are considered best practices.

The Appalachian Center is “neither the most effective nor the least expensive way” to reduce emissions, said Sean O’Leary, a senior researcher at the Ohio River Valley Institute, an advocacy group that has criticized hydrogen and carbon capture.

The Biden administration said two-thirds of the center’s funds would go toward “green hydrogen,” which is made using renewablely generated electricity. Most climate advocates argue that this is a better use of money and should ultimately be the only type of hydrogen produced. But even green hydrogen has its risks.

If projects divert clean energy from the electric grid, for example, they could increase the demand that can be met by fossil fuel power plants, in effect increasing emissions.

Two projects also plan to use electricity from nuclear power to produce hydrogen.

Regardless of the type of production, the use of hydrogen can be equally important. Some studies have shown that using hydrogen to heat homes, for example, or blending it into natural gas pipelines to burn in power plants, would be much less efficient than using electricity generated by wind or solar, and could lead to higher energy costs.

The Environmental Protection Agency has proposed rules to reduce climate pollution from the energy sector that would allow companies to rely on fueling their plants with hydrogen, and the centers could help shape how those efforts evolve.

Four of the seven hubs say they plan to use hydrogen in the energy sector, while two mention its use for heating.

Beyond climate impacts, the hydrogen centers will be a test of the Biden administration’s stated goals of using the clean energy transition to help improve the lives of people who have suffered most from polluting industries and lost jobs in the fossil fuel sector.

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For example, the Appalachian Center said it would create more than 21,000 jobs, many of them in coal communities. But many community groups say they were left out of the process of selecting the center’s award winners.

“The amount of community engagement and community protection will be critical to the success of the projects,” Root said. “Without this, projects could create truly unfair health and environmental impacts. There is the potential for worsening air pollution, and disruption to existing water resources.

Rutte said it is impossible yet to determine whether civil society groups will receive enough information from the ministry to effectively influence the development of the centers before it is too late.

Announcing the winners is just the first step. The management will now enter into negotiations with the centers and can cancel those awards depending on the outcome. The ministry said it will publish more information as negotiations continue.

“I kind of give them the benefit of the doubt and assume that this information is out there for people to be able to participate,” Root said. “They know what is needed.”

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