Joe Biden’s administration awarded $7bn on Friday to US clean hydrogen project, which included several fossil fuel companies. Washington is moving to build up this sector, which has been hailed as a key part of its decarbonisation efforts.
ExxonMobil, Chevron and other oil giants are partners in the $1.2bn Hydrogen Hub project. Another $925mn is being granted to a West Virginia project that will be partnered with Marathon Petroleum & EQT. Both hubs will produce most of their hydrogen using fossil fuels, and then capture the emissions.
The administration officials have named seven projects, including two partially located in Pennsylvania, the swing state for 2024. Other projects are based in Ohio and Texas, North Dakota and South Dakota as well as Minnesota and the Pacific Northwest. The seven hubs will invest nearly $50bn between them.
Exxon, Chevron and other companies that have prioritized hydrogen and carbon capture in their decarbonisation strategies, applauded this announcement. Mark Klewpatinond is the head of Exxon’s hydrogen business. He said that his company’s “extensive expertise” would help to advance hydrogen development on the Gulf Coast.
The announcement could attract criticism from environmental and clean energy groups who have been pushing the Biden administration not to fund as many fossil-fuel based hydrogen projects. The money, approved by the Infrastructure Act of the Biden administration, must go to hydrogen projects that come from various sources.
Patrick Drupp said that the Sierra Club doesn’t support fossil-based hydrogen or think it is a long-term solution to climate change. “Today’s announcement is promising, but there are also reasons to be concerned. Especially in the Gulf where it could keep us dependent on oil and gas.”
These companies have large balance sheets that they can use to increase the production of clean hydrogen. . . “Smaller developers, who didn’t have to compete with larger companies for funding, would benefit more,” says Oleksiy Tsarenko of the non-profit RMI hydrogen initiative.
The federal government has invested the most in this nascent industry to date. This announcement is the first of two decisions that are expected to be made by the sector in this fall.
The Inflation Reduction Act (Biden’s clean energy bill) contains $5.3 billion in additional tax credits for clean hydrogen production, and has made the US one of the most competitive markets for this fuel. The lobbying campaign has brought together the biggest oil companies to ensure that the rules governing the tax credit are flexible.
It has been long hailed as a revolutionary alternative to fossil-fuels that could power heavy industry and store energy. Almost all of the US’s current hydrogen is made from natural gas, which produces large amounts carbon dioxide.
Scientists have discovered that the way hydrogen is produced differs, and this can lead to significant differences in carbon emissions. While “green” hydrogen is produced using wind and solar power, “blue hydrogen” uses natural gas with carbon capture technology.