Regional Companies Form Hydrogen Alliance
Several large companies with ties to Appalachia recently announced they are forming an alliance to attract a low-carbon and hydrogen industrial hub to the tri-state area.
At the same time, the U.S. Department of Energy announced it is seeking feedback from stakeholders on the design and implement the clean hydrogen initiatives that are funded with $9.5 billion from the bipartisan infrastructure law approved by Congress late last year that provided $550 billion over the next five years for infrastructure and energy investments.
The bill included $8 billion for at least four Regional Clean Hydrogen Hubs, with at least two located in regions with abundant natural gas resources. Clean hydrogen is seen as a potential fuel to decarbonize hard-to-electrify economic sectors such as heavy-duty transportation, steel manufacturing, and other industrial processes.
“While most of the hydrogen produced today in the U.S. comes from natural gas through steam reforming, electrolysis technology, which uses electricity to produce hydrogen from water, is an emerging pathway,” a press release from the U.S. Department of Energy indicates. The U.S. now produces about 10 million metric tons of hydrogen annually of the 90 million tons produced globally.
However, producing hydrogen through steam reforming still results in carbon dioxide emissions, which the Biden administration it trying to sharply reduce in order to meet its goal of net-zero carbon emissions by 2050 in order to slow climate change.
The alliance announced in early February by EQT Corp., Shell, U.S. Steel, and others will work toward a low-carbon and hydrogen industrial hub in this area, with a focus on carbon capture, utilization, and storage. Hydrogen produced with CCUS is sometimes known as “blue hydrogen,” while that produced through no-emissions electrolysis is called “green hydrogen.” There is some debate over what constitutes clean hydrogen.
However, the Appalachian region was one of 14 areas identified in a recent study by the Great Plains Institute with the infrastructure, industry, energy, and natural resources needed to become a hub. “The co-located energy production, industrial and manufacturing capacity and geologic storage resources of a hub region offer a potential to create economies of scale from investments in shared infrastructure,” the report states. In addition to an abundant supply of natural gas from the Marcellus and Utica shales, this area also has geologic formations that would be suited for permanent storage of carbon removed during the production process, as well as significant industrial activity.
Clean hydrogen technology and carbon capture must be scaled up rapidly, which will take a concentrated approach and require huge investment. A press release announcing the hydrogen hub alliance said, “This large-scale, regional approach will require new levels of public-private partnerships across borders and sectors. The alliance is working to establish a collaborative network to directly engage industry, labor, universities, communities, government, research institutions, non-profit organizations, and other groups in these efforts.
“The Northern Appalachian Region brings tremendous assets, from world-class universities and national laboratories to deep-rooted industrial capabilities, with key strengths in manufacturing, materials, and energy. All of this is supported by the region’s highly skilled and experienced workforce, as well as a strong and growing startup ecosystem.”
Other participants in the alliance are GE Gas Power, Marathon Petroleum, and Norway-based Equinor.
“We look forward to working with other industry leaders to support the development of one or multiple low-carbon energy hubs in North Appalachia,” said Rob Wingo, EQT’s Executive Vice President, Corporate Ventures. “Our region has an abundant source of low-cost, low emissions-intensive natural gas which can be converted to low-carbon fuels and used to reduce our country’s carbon footprint. At EQT, we see a significant opportunity to expand beyond our existing business by leveraging this advantage to develop low-carbon fuel production and CCUS opportunities.”