The Department of Energy’s announcement Wednesday of $2.2 billion in new “clean” hydrogen funding is renewing questions about the future of the low-carbon industry after President-elect Donald Trump takes office in January.
DOE said it’s committing up to $1.2 billion in federal cost share for the Gulf Coast Hydrogen Hub and as much as $1 billion to the Midwest Hydrogen Hub (MachH2) — two pledges meant to cement the Biden administration’s ambition to build up the U.S. sector.
“The Biden-Harris administration has followed through on its promise to kickstart a new domestic hydrogen industry that can produce fuel from almost any energy resource in virtually every part of the country,” Energy Secretary Jennifer Granholm said in a statement.
The two hubs are part of a $7 billion Biden administration effort to jump-start the nascent industry using funds from the 2021 bipartisan infrastructure law. The administration considers clean hydrogen to include “blue” hydrogen, which involves burning fossil fuels and trapping the emissions through carbon capture and storage, as well as “green” hydrogen made with renewables and “pink” hydrogen produced with nuclear power.
In October of last year, DOE picked seven hubs to receive infrastructure law funding and develop hydrogen systems for the transportation, industrial and power sectors. The department has made initial awards to hubs in California, the Pacific Northwest and Appalachia.
For the Midwest hub, planned production sites are located in Michigan, Illinois, Indian and Iowa, according to a department fact sheet. The plan envisions using wind, natural gas and nuclear power for hydrogen production to decarbonize power generation, as well as heavy industries like steel. The hub, which is led by the Midwest Alliance for Clean Hydrogen, would create approximately 12,000 jobs over its lifetime, DOE said.
Project sites for the Gulf Coast hub are located in the Houston area and in South Texas. Led by HyVelocity, the hub plans to produce hydrogen from both low-carbon sources and natural gas tied to carbon capture. DOE said the Gulf Coast hub would create roughly 45,000 jobs over the project’s lifetime.
While DOE’s pledge for the two hubs is $2.2 billion, the department awarded roughly $22 million to each project Wednesday to launch their initial respective phases, which includes “planning, design, and community and labor engagement” work.
“By moving into Phase 1 with $22.2 million in federal funding, MachH2 will help accelerate the clean hydrogen economy and we are looking forward to working with communities throughout the Midwest to deliver the benefits of the clean energy future,” said Dorothy Davidson, CEO of MachH2, in a statement.
It’s unclear how much hydrogen and other infrastructure funding could be rescinded administratively or through new legislation in a Republican Congress next year.
Trump’s views on hydrogen hubs are not fully known, although his campaign website criticizes the fuel as “untested” and “plagued with safety and effectiveness concerns.” He’s also said he wants to claw back, or “impound,” infrastructure law funding.
Spokespeople for the Trump transition team did not respond for comment.
Some of Trump’s picks for top Cabinet positions have been supportive of hydrogen, however.
Among the backers of the hubs are North Dakota Gov. Doug Burgum (R), Trump’s choice to lead the Interior Department, and a new energy council.
Any efforts by Trump to stall the hubs also could face opposition from major oil companies.
“We’re pleased to be part of HyVelocity and look forward to continued collaboration with our partners from industry, academia, and government to help advance the low-carbon hydrogen industry,” said Dan Holton, senior vice president of Exxon Mobil Low Carbon Solutions. “DOE’s support is a key enabler in developing this emerging market, and this award marks an important step in that direction.”
An oil and gas win?
DOE materials for each of the hydrogen hubs included a summary of community benefits commitments. The documents noted that the commitments “will be refined and updated at the end of each project phase.”
Companies behind the projects and industry associations applauded DOE’s new pledges.
“These Hubs will be integral in driving domestic clean hydrogen production and utilization, which will create tens of thousands of good paying jobs and help ensure American leadership in this global market, while driving broad decarbonization,” said Frank Wolak, CEO and president of the Fuel Cell and Hydrogen Energy Association, in a statement.
Environmentalists have mixed views of hydrogen.
“There’s a potential for hydrogen to do good,” Cyrus Reed, conservation director with the Sierra Club’s Lone Star Chapter, said in an interview Wednesday. There’s also “the potential for it to be a false clean energy solution and do harm.”
He said “the devil’s going to be in the details.”
The Sierra Club supports green hydrogen, as long as it doesn’t “take away from existing wind and solar and batteries that’s helping to power our grid right now in a clean way,” Reed said.
Others like Robert Bullard, a professor of urban planning at Texas Southern University, said he was concerned about the effects on public health from the Gulf Coast hub.
“Community members have made it clear that the hub, instead of helping communities, will most likely allow large oil and gas corporations to continue polluting at the expense of public health and the environment,” Bullard said.
The funding for the Gulf Coast and Midwest hubs is greater than the federal cost share for the Appalachian Hydrogen Hub — which is set to receive up to $925 million. A Mid-Atlantic Hub and a “heartland” hub in Minnesota, Montana, North Dakota and Wisconsin have yet to ink deals with DOE.
Representatives at those hubs did not respond for comment. A DOE spokesperson said the department is “focused on getting these hubs” finalized for awards.
