A Drop in Emissions, and a Jobs Bonanza? Critics Question Benefits of a Proposed Hydrogen Hub for the Appalachian Region

PITTSBURGH—As the federal government nears a decision on which of the nation’s proposed “hydrogen hubs” will share up to $8 billion in startup money, critics of the idea in the Appalachian region are asserting that the program would do little to curb greenhouse gas emissions or create jobs, while increasing electricity prices for consumers and businesses.

The U.S. Department of Energy plans to fund six to 10 regional hydrogen hubs to produce, store and use hydrogen as an alternative fuel for industry, transportation and power generation. Two rival proposals for the Appalachian region are still in the running, with separate support from the Pennsylvania and West Virginia state governments.

But at a meeting this month in Pittsburgh, detractors argued that the economic and environmental benefits of building the hubs had been overstated. “The risk that we run is pushing hydrogen and carbon capture into applications where it’s not cost-effective,’’ said Sean O’Leary, a senior researcher at the Ohio River Valley Institute, the research nonprofit that sponsored the Sept. 11 forum. 

He warned that the program, known as Regional Clean Hydrogen Hubs, or H2Hubs, would siphon resources from more effective efforts to arrest climate change. The adopters would be “causing ourselves to pay far more money for a half measure—something that would cost a great deal more than other solutions and do a much worse job of reducing carbon emissions without any significant economic development to accompany it,’’ O’Leary said.

The hubs would generate so-called blue hydrogen, using natural gas to heat water that would then be separated into hydrogen and oxygen. Carbon generated from the gas combustion would then be captured and buried in underground spaces that would be fed by a pipeline network.

 Advocates of the process say it would significantly reduce carbon dioxide emissions from major sources such as power plants and transportation while creating thousands of jobs. A regional hub would particularly benefit communities suffering from the long declines in the coal and steel industries, they add, which have traditionally dominated the economies of Pittsburgh and the Appalachian region. 

When approached by Inside Climate News, neither of the two public-private initiatives proposing to build a hub in the Appalachian region supplied projections of the hoped-for economic impact, however. And some analysts say the Department of Energy has not only exaggerated the benefits of the program but also risks worsening greenhouse gas emissions through leakage of the methane involved in burning and distributing the natural gas—and through the escape of hydrogen itself.

“The reality is that blue hydrogen is neither clean nor low-carbon,” the nonprofit Institute for Energy Economics and Financial Analysis, or IEEFA, declared in a report released the day after the Pittsburgh event. Equally worrying, it said, “pursuing it will waste substantial time that is in short supply and money that could be more wisely spent on other, more effective investments for reducing greenhouse gas emissions in the immediate future.”

Disputing the Government’s Emissions Projections

The report said that a model generated by the DOE significantly understated the amount of methane that would be emitted by producing hydrogen from fossil fuels. The model also based its projections for methane’s global warming potential on a 100-year period, although the gas is 80 times more potent than carbon dioxide over 20 years, it noted. And it fails to include an estimate of the warming potential for hydrogen, the institute added, saying that the gas has 30 times the warming potential of CO2 over 20 years.

“IEEFA is extremely concerned that the current blue hydrogen hype is going to result in the funding of projects that exacerbate climate change and lock in our reliance on fossil fuels for decades,” the paper states.

The Department of Energy said it does not comment on outside analyses but defended its hydrogen hub program as an essential part of the Biden administration’s efforts to reach net-zero emissions by 2050 while creating thousands of clean energy jobs.

 “DOE’s Regional Clean Hydrogen Hubs program is essential to achieving President Biden’s vision of a strong clean-hydrogen economy that creates healthier communities, strengthens energy security, and delivers new economic opportunities across the nation,” the agency said in a statement.

The agency said there had been a “tremendous” response to its call for initial proposals, called concept papers, from groups that hope to develop the hubs, with 79 submitted from across the nation. The agency then asked some groups to make final applications, based in part on their expected contributions to a national hydrogen network, and how their plans would benefit the communities where they would operate. The DOE says it will announce the projects that will share in the $7 billion pie, created by the 2021 Infrastructure Investment and Jobs Act, this fall.

Two groups in the Ohio/western Pennsylvania/West Virginia region were asked to submit final applications: the Decarbonization Network of Appalachia, or DNA, and the Appalachian Regional Clean Hydrogen Hub, or ARCH2. Each wants to build a hydrogen-production and carbon-capture infrastructure that would reduce emissions and stimulate the regional economy.

The DNA group is led by Team Pennsylvania, a 26-year-old public-private initiative that includes senior industry leaders and Gov. Josh Shapiro and other state officials. Its project would extend to Ohio and West Virginia as well.

In an interview, Tom Murphy, TeamPA’s senior managing director for special energy initiatives, rejected arguments from the Ohio River Valley Institute and others that hydrogen is unsuitable for generating electric power because it will sharply increase production costs and result in higher bills for households.

Murphy maintained that a power plant that burns blue hydrogen would emit 90 percent less carbon dioxide than a regular natural gas-fired plant. And a blue hydrogen plant would be unable to sell power at higher prices, he said, because of the competitive power-supply auctions operated by PJM, the nation’s largest grid operator, whose territory includes the Appalachian region.

Some critics have asserted that building a carbon sequestration network would be very costly. But Murphy said that the technology has been deployed to some degree in the U.S. and Europe and that the CO2 could be transported through existing pipeline rights of way for storage at designated facilities. 

He declined to say whether DNA’s project would proceed if it is not selected for federal funding but emphasized that its proposal was commercially viable and well beyond the exploratory research phase. “They wanted to know that whatever investments they made would hit the ground running,” he said. “We have put in an application that would subscribe to that same line of thinking.”

Murphy also declined to say how much federal money his project was seeking or how many jobs it would create. But if it gets the federal go-ahead, he said, he expects it to be up and running within five to six years and to create a “very substantial” number of jobs.

A Rival Project With West Virginia’s Support

The ARCH2 group, meanwhile, whose leaders include state officials in West Virginia and the regional natural gas producer EQT, said the Appalachian region, with its long history of energy and steel production, was well placed to participate in a national hydrogen network that would counter the emissions impact of those traditional industries.

“Our proposed hub’s hydrogen production will enable hard-to-abate sectors to decarbonize through reduced life-cycle emissions by utilizing our region’s abundant natural gas resources and carbon sequestration,” the group said in a statement. Its network would encompass West Virginia, Ohio, Pennsylvania and Kentucky.

But Morgan King, the climate campaign coordinator for the environmental nonprofit West Virginia Rivers, maintains that a blue-hydrogen network would be damaging to public health, pollute water supplies and contribute to climate change. A hydrogen hub would stimulate fracking for natural gas, which involves using toxic chemicals to unlock gas reserves from rock formations deep underground, she contends.

Like other critics, she asserts that carbon emissions across the oil and gas supply chain are higher than those estimated by the federal Environmental Protection Agency and the DOE, and that cancer risks are far higher in the West Virginia, Pennsylvania and Ohio counties where fracking is common than in the U.S. overall.

O’Leary, the Ohio River Valley Institute researcher, said that because of the costs involved and its potential greenhouse gas production, hydrogen is unsuited for most of its proposed uses, including heating homes and office buildings, fueling cars and other light vehicles, and, especially, generating power. He argued that a 20 percent blend of blue hydrogen in gas-fired power generation would raise the fuel price by 50 percent while reducing greenhouse gas emissions by only 7 percent.

The exceptions, he said, are the steel and cement industries: Even some critics of the proposed hubs say that hydrogen could vastly reduce the carbon footprint of those industries by helping to curb their emissions, which have contributed to poor air quality in the Pittsburgh region since the 19th century. 

But O’Leary, a native of Wheeling, West Virginia, fears that the proposed hydrogen hub won’t deliver on its promise of an economic rescue for a region where the steel industry’s collapse cost tens of thousands of jobs in the 1960s and ‘70s.

He ticked off disappointments in the recent past, like a proposal in 2016-17 to create a regional storage hub for natural gas liquids and much-heralded plans for four or five petrochemical plants, of which only one—a Shell plant in Monaca, Pennsylvania, that makes feedstock for plastics—has been built.

“The hydrogen hub threatens us with going through yet another cycle of delusional expectation that this development is going to be an economic savior,” O’Leary said. “I’m tired of watching my town get obliterated.”