Biden Administration Announces Huge Subsidies For Unproven “Hydrogen Hubs”
On Friday, October 13th, the Biden administration announced a huge subsidy for seven regional “clean hydrogen hubs.” The announcement said $7 billion from the Bipartisan Infrastructure Law would go to “accelerate the domestic market for low-cost, clean hydrogen,” part of the Left’s dramatic push for a “green” electricity future.
The only problem? The technology to efficiently store and cleanly burn hydrogen (H2)gas doesn’t currently exist, while attempts to harness hydrogen as a zero-emission fuel have failed for decades.
Hot Air
The press release from the White House said President Biden and Energy Secretary Jennifer Granholm would fund seven regional hubs to “catalyze more than $40 billion in private investment” in electrolysis-based H2 production.
“Several of the hubs were developed in close partnerships with unions,” the White House announced, “with three requiring project labor agreements (PLAs). In addition to job creation and creating healthier air for communities, the selected hydrogen hubs are committed to robust Community Benefit Plans to ensure local priorities are at the forefront and all communities share in the benefits of the clean energy transition.”
This represents just a portion of the Biden administration’s enormous expenditures in what it calls “clean energy investments.” Long on hype but short on details, the press release also said, “$1 billion of the remaining funding will be used for demand-side support for the hubs to drive innovative end-uses of clean hydrogen.”
In other words, they must create a market where none actually exists.
The administration made sure the announcement contained all the proper social justice buzzwords:
The Biden-Harris Administration is committed to ensuring safe hydrogen deployment and mitigating potential social, economic, technical, and environmental risks. The hubs are covered under the Justice40 Initiative, which aims to ensure that 40 percent of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution. Hubs have also submitted detailed Community Benefits Plans, including how the project performers will transparently communicate, eliminate, mitigate, and minimize risks [emphasis added].
A number of objections to this “investment” have emerged in the communities chosen to site these hubs. For instance, in Lewis County, Washington, the Pacific Northwest hub will rely on a significant amount of “green” electricity generation, at a time when a nearby coal plant will go offline. An Australian mining company called Fortescue has invested in constructing hydrogen electrolysis facilities in an effort to “decarbonize” its industry, and will lead the project in Washington. Lindsey Pollock, a Lewis County (WA) Commissioner, raised several unanswered questions in an op-ed piece:
1.) Who is paying for construction?
Concern: Fortescue’s “green” spin-off FFI is applying for U.S. tax dollars through the Department of Energy’s Hydrogen Hub multi-billion dollar grant program. In other words, we will pay for an Australia-based corporation’s construction costs.
2.) It is claimed the Centralia School District will benefit by receiving property tax dollars from the facility. How much will they get?
Concern: Washington state law has been altered to grant exemptions to green energy facilities, including hydrogen. I have asked and no one has been able to explain why Fortescue’s plant would not qualify for these exemptions.
3.) Where will they get the 300 megawatts of electricity they need to run the plant?
Concern: They don’t know, or aren’t willing to say. The problem we have is that we’re going to be short approximately 240 megawatts of electricity when the coal plant comes offline. (For comparison, the entire City of Centralia uses 30 megawatts.) Adding Fortescue’s hydrogen plant puts us at a deficit of 540 megawatts. We all know what happens to prices when something becomes scarce [emphasis added].
Beyond the obvious questions, Pollock also doubts a sufficient market exists to make H2 production viable. Nobody has identified a buyer for the hydrogen gas, but she suspects China would be the main consumer. Her conclusion? It sure looks like American taxpayers will send hundreds of millions of dollars to a foreign construction company to create a facility that will provide a few dozen local jobs, to create a product consumed by one of our main global adversaries, while causing significant rate increases for regional power consumers.
Even a favorable report by the left-leaning States Newsroom referred to the details of the hub projects as “secret” and “vague.”
Viability Problems
Clean hydrogen is not a new idea. Power companies have studied the potential since at least the 1960s. According to a Department of Energy report in 2004, when the department attempted to revive government subsidized research and development into the technology, most private producers abandoned the technology in the 1970s for various reasons revolving around viability.
The idea of burning hydrogen gas has merit, but the devil is in the details. Producers have yet to overcome three main obstacles to making it viable and affordable:
- Efficient production
- Safe and efficient storage
- Keeping the fuel cell clean
Hydrogen gas creates a strong exothermic reaction when exposed to oxygen, creating a lot of heat as hydrogen and oxygen atoms combine to produce water. Picture the Hindenburg zeppelin, held aloft with lighter-than-air hydrogen gas, suffering a sudden breach and causing a massive fireball. There’s lots of potential in hydrogen as a fuel source… if we can find a way to safely contain the reaction.
Therein lies the problem. Department of Energy studies in the early 2000s (in both the Bush and Obama administrations) identified electrolysis as a somewhat efficient means of production, but pointed out that storage and keeping dust out of the fuel cells proved prohibitive. Large-scale expansion of the industry stalled. Storage of H2 requires very high-pressure tanks, which are prohibitively bulky, and while fuel cells work well on the space station, in an atmosphere on earth with innumerable sources of dust, they cannot be kept clean.
Never mind that their own hydrogen tax credit rules tucked away in the Inflation Reduction Act don’t allow for any of this. On his Substack, energy expert David Blackmon wrote that the Treasury Department has yet to resolve regulations governing that hydrogen tax. This affects which projects will and will not qualify for the tax credit. This is no small matter. As Blackmon writes:
At issue is the concept of “additionality,” a standard that would require electricity for production of hydrogen to be generated from new “green” sources, i.e., renewable energy. Given that the IRA itself did not specify any such requirement, many are concerned that an attempt by Biden Treasury officials to include one would inevitably lead to a raft of litigation that would in turn lead to delays and cost increases in pending new projects.
The irony, of course, is that these new “clean hydrogen” projects have the best chance of succeeding if we use dirty power generated by burning “fossil fuels.”
Has any of this stopped Jennifer Granholm and Joe Biden? Of course not. What this problem clearly requires is more money poured into it, without any rules, because Big Oil obviously wants them to fail.
