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One of the Biden administration’s flagship hydrogen energy projects faces an uncertain future amid strong public opposition, underscoring the difficulty of adopting a technology once hailed as key to the green transition.
The Appalachian Regional Clean Hydrogen Hub (ARCH2), which spans the prolific Marcellus Shale Basin in West Virginia, Ohio and Pennsylvania, is expected to produce hydrogen primarily through gas and carbon capture by mid-2030. But the $6 billion project, whose developers include fossil fuel companies EQT, CNX and Marathon Petroleum, has faced opposition from local communities and environmental groups due to its environmental footprint and doubts about its commercial viability.
Last month, more than 50 local environmental groups wrote a letter to the Department of Energy calling on it to pause negotiations on ARCH2 until there is more clarity about the project.
“This is just the latest reinvention of the [oil and gas] “The hydrogen industry is trying to stay relevant and position itself as the solution to a problem it created: the climate crisis,” said Tom Torres, hydrogen campaign coordinator at the Ohio River Valley Institute and one of the letter’s signatories.
Clean hydrogen is being touted for its potential to green hard-to-abate sectors like shipping and cement production. America’s abundant cheap gas reserves have made it an attractive target for projects like ARCH2 that use gas and carbon capture, also known as blue hydrogen.
However, the adoption of blue hydrogen is controversial because it generates emissions and relies on carbon capture technology that has not yet been proven to be cost-effective at scale. A study by researchers at Stanford University and Cornell University found that the emissions footprint of blue hydrogen is 20 percent higher than burning gas or coal to generate heat.
Environmental groups say blue hydrogen projects are a lifeline to the fossil fuel industry and that funds should instead go toward green hydrogen produced from renewable energy.
Kat Finneran, a geography doctoral student from Findlay, Ohio, where Marathon Petroleum is headquartered, warned that the hydrogen hub would “extend fracking activities for decades.”
“It not only extends them, it justifies them and makes them environmentally friendly,” said Finneran, who also testified at a Department of Energy hearing with nearly 200 participants in March.
By 2030, the United States is expected to be the world’s largest producer of clean hydrogen. According to consultancy BloombergNEF, blue hydrogen will account for more than three-quarters of production. Green hydrogen, produced using renewable energy, will make up the remaining fifth.
Shawn Bennett, ARCH2 project manager and former assistant secretary of state for oil and gas under the Trump administration, defended the hub’s environmental sustainability and economic viability.
He said the hub would “not create any new [gas] “Wells need to be drilled,” and attributed local resistance to a “misunderstanding” about the project’s development status. ARCH2 was negotiating with the Department of Energy and had not yet decided on locations for its hydrogen plants to begin engaging with the community in earnest, Bennett said.
“Instead of funding, it’s very difficult … to start making promises and commitments to communities,” said Bennett, who testified June 17 at a Pennsylvania House of Representatives hearing on hydrogen hubs where environmental groups and lawmakers raised concerns about blue hydrogen’s carbon footprint.
A Department of Energy spokesman said clean hydrogen was “essential” for a strong green energy economy and hydrogen hubs would “help unlock the full potential of this versatile fuel”.
The Biden administration has set a goal of producing 10 million tons of clean hydrogen annually by 2030. This puts production at virtually zero today and is equivalent to the size of the “dirty” hydrogen industry, which is derived from fossil fuels and generates a significant amount of emissions.
Community opposition has plagued other hydrogen projects as well. For example, France-based CMG Cleantech relocated its $113 million renewable energy technology park in Osceola County, Florida, after local residents opposed its green hydrogen plans. The move delayed the project by eight months.
Analysts say hydrogen projects are struggling to attract financing and customers. BNEF estimates that only 6 percent of U.S. projects have binding supply contracts.
“There is a real distrust of the existence of a real hydrogen market with competitive prices,” says Elina Teplinsky, partner at Pillsbury Law. “Many companies are waiting before making serious investments.”
The lack of final rules for the controversial clean hydrogen production tax credit from the Inflation Reduction Act is also hindering adoption in this sector.
In February, all seven hydrogen hubs wrote a letter to the Treasury warning that “investment and jobs will not fully materialise” unless the rules are “significantly revised”.
Climate Capital
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