Arizona loses bid for hydrogen fuel project, researchers vow to push ahead

The White House announced Friday that a proposal to develop hydrogen as a low-carbon fuel source in Arizona will not be funded as part of President Joe Biden's $7 billion Regional Clean Hydrogen Hubs program.

The news comes as a disappointment but not a complete surprise to the scientists and engineers behind the SHINe proposal, a collaboration between more than 40 organizations collectively known as the Southwest Clean Hydrogen Innovation Network, to bring clean hydrogen fuels to Arizona and Nevada.

In May, The Arizona Republic reported that the SHINe proposal had advanced to the final round of the federal application process, and detailed how clean hydrogen is produced and what a pivot to hydrogen might mean for local infrastructure needs and action on climate.

At the time, two leading authors of the proposal, Arizona State University scientist Ellen Stechel, who directs ASU's Center for an Arizona Carbon-Neutral Economy, and Southwest Gas engineer Joe Varela, who directs the utility on emerging technology and innovation, were hopeful their ideas would be chosen for funding.

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Their project aims to help the Southwest diversify its clean energy generation quickly to slow the impacts of climate change, which is caused primarily by the greenhouse gases emitted when fossil fuels are burned for energy.

'Very far from dead'

Earlier this week, Stechel expressed doubt to The Republic that SHINe would be among the successful applicants. When that hunch became a reality with Friday's announcement, she responded by congratulating the winners and affirming that this lack of funding will not be the end of work toward clean hydrogen fuels in Arizona.

"Growing a robust clean hydrogen industry in the SHINe region is very far from dead," Stechel said. "We are, of course, disappointed to not have been selected, but we are excited for the announcement today and for the hubs that were selected and we look forward to working with them. Given its abundant sunshine and fast growing industry and manufacturing sector, Arizona and Nevada are destined to have an important role in this critical new industry with or without a hub designation."

Stechel said she was not told by the Biden administration why the SHINe proposal was not selected. One possible concern about the viability and sustainability of clean hydrogen production in the Southwest is that the process requires water as a main ingredient, something Arizona is increasingly trying to ration and conserve.

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In a statement shared Friday in response to drought-stricken California being selected as one of Biden's hydrogen hubs, Chirag Bhakta, director of the environmental group Food and Water Watch's California division, criticized the federal investment in an unproven technology that relies on water in arid regions.

“Hydrogen is not a clean energy solution, and it is especially ill-suited for areas where water scarcity is a problem," Bhakta said. "Hydrogen is water intensive, which is particularly dangerous in a state that lacks water resiliency. Throughout its life cycle, each megawatt-hour of ‘green’ hydrogen consumes at least 5,000 liters of water, far more than clean energy sources like wind or solar. Instead of investing in sustainable climate change solutions, our leaders are buying into the false promise of hydrogen."

Environmental advocates have objected to the development of hydrogen (H2) as a fuel source based on the use, in some instances, of natural gas or even coal to break the bonds of water to create H2 in situations where not enough renewable energy is available. Others have worried that diverting greener energy sources like nuclear toward the production of hydrogen might just be a distraction from more straightforward progress in the form of expanding solar and wind, for example.

There are also concerns about existing utility infrastructure not being well suited to carry reactive hydrogen fuels, about carbon capture not being a reliable aspect of this process, and about H2 escaping into the atmosphere and interfering with the breakdown of methane, a potent greenhouse gas.

Varela spoke to The Republic about much of this in May and clarified that the Arizona projects would likely use a variety of energy sources to create H2, including natural gas, in combination with carbon capture to limit climate impacts. With various environmental and human risks a part of nearly every path forward, he believes in exploring multiple options at once.

"If you go too far in one direction, whether it be hydrogen from solar or wind and you leave out the potential for making hydrogen from renewable methane or biogas sources, then you kind of put yourself in a situation where you don’t have this nice diverse portfolio," he said.

Southwest Gas, Varela's employer, responded to the announcement Friday with a statement for The Republic from analyst and customer engagement representative Ariana Renick:

"Southwest Gas is strongly committed to the development of innovative solutions that support an inclusive and balanced energy future — meeting the energy needs of our customers and communities while helping to achieve economy-wide emissions-reduction."

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Stechel also thinks the benefits to Arizona of pursuing hydrogen as a clean fuel outweigh the risks. With her foot firmly on the gas pedal of the SHINe initiative, she now plans to turn to other funding options.

"The federal funding for hubs would have been a welcome catalyst to help kick-start some projects but the development is not solely dependent on that funding," she said.

Stechel is optimistic that money from the private sector, production tax credits, and investment tax credits in the Inflation Reduction Act and the option to pursue support through the Department of Energy's loan program office will keep the project afloat.

"We fully expect that the industry will flourish in the region and we are committed to supporting the clean energy transition and the multitude of benefits, not the least of which is cleaner air, a safe environment, responsible use of water and a resilient grid."

Hydrogen hub forms spokes that may help turn against the wheel of time

In Friday's announcement, U.S. Secretary of Energy Jennifer Granholm expressed her confidence in this step toward hydrogen fuels development as part of U.S. efforts to address climate change.

“Unlocking the full potential of hydrogen, a versatile fuel that can be made from almost any energy resource in virtually every part of the country, is crucial to achieving President Biden’s goal of American industry powered by American clean energy, ensuring less volatility and more affordable energy options for American families and businesses,” Granholm said in a prepared statement.

Collectively, the seven proposals selected to form Biden's clean hydrogen hub are expected to cut 25 million metric tons of carbon dioxide emissions each year and makeup about one-third of the 2030 U.S. clean hydrogen production goal. More details on each project (though not a lot more — the process has been and continues to be very secretive, with project specifics and even lists of finalists not released to the public) are available in The White House's full announcement, with brief descriptions below:

• The Mid-Atlantic Hydrogen Hub(Mid-Atlantic Clean Hydrogen Hub (MACH2); Pennsylvania, Delaware, New Jersey) will receive up to $750 million to "help unlock hydrogen-driven decarbonization in the Mid-Atlantic while repurposing historic oil infrastructure and using existing rights-of-way." It plans to make use of "electrolyzer technologies" to develop renewable hydrogen production facilities. It expects these efforts to create more than 20,000 jobs, about 6,400 of those permanent.

• The Appalachian Hydrogen Hub(Appalachian Regional Clean Hydrogen Hub (ARCH2); West Virginia, Ohio, Pennsylvania) will be supported with up to $925 million. It will create 18,000 green jobs (3,000 permanent) in coal country while working to use "the region’s ample natural gas" to produce low-cost clean hydrogen and safely store associated carbon emissions.

• The California Hydrogen Hub (Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES); California) has been awarded $1.2 billion to produce hydrogen exclusively from renewable energy and biomass, providing a "blueprint for decarbonizing public transportation, heavy-duty trucking, and port operations — key emissions drivers in the state and sources of air pollution that are among the hardest to decarbonize." Along the way, it will create 220,000 jobs (90,000 permanent) and take steps to expand labor opportunities for disadvantaged communities.

• The Gulf Coast Hydrogen Hub (HyVelocity Hydrogen Hub; Texas), headquartered in Houston, will also receive $1.2 billion to pursue "large-scale hydrogen production through both natural gas with carbon capture and renewables-powered electrolysis, leveraging the Gulf Coast region’s abundant renewable energy and natural gas supply to drive down the cost of hydrogen." This is expected to result in 45,000 jobs (10,000 permanent).

• The Heartland Hydrogen Hub(Minnesota, North Dakota, South Dakota) was granted up to $925 million to help decarbonize fertilizer production, decrease the cost of clean hydrogen, and advance its use to meet energy demands for indoor heating. This project plans to work with tribal communities and local farmers to offer equitable opportunities and ownership and will create close to 4,000 jobs (700 permanent).

• The Midwest Hydrogen Hub(Midwest Alliance for Clean Hydrogen (MachH2); Illinois, Indiana, Michigan) will have up to $1 billion to advance efforts to decarbonize the transportation corridor by using renewable energy, natural gas and nuclear energy to produce clean hydrogen fuels for use in steel and glass production, power generation, refining, heavy-duty transportation and sustainable aviation fuel. It will create more than 13,000 jobs (1,500 permanent).

• The Pacific Northwest Hydrogen Hub(PNW H2; Washington, Oregon, Montana) will also have up to $1 billion to produce clean hydrogen, which it proposes to do exclusively from renewable sources using electrolyzers. They hope that will help drive down costs for this technology while creating 10,000 jobs (350 permanent).

The funding will not be awarded all at once and may depend on these initiatives meeting scheduled progress benchmarks. As reported by Canary Media on Friday, the design and planning phase could take the next 12-to-18 months. After that, a development phase to line up commercial agreements and financing could last years.

The U.S. energy grid wasn't built in a day, and redesigning it will take time to ensure that new sources like hydrogen fuels are safe and economically viable to develop, transport and use in a variety of sectors. On the other hand, scientists and activists increasingly cite worsening impacts from climate change as a reason to accelerate investing in and developing all forms of clean energy, accepting that there will be some tradeoffs related to environmental and human health.

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Opposition to Friday's announcement from environmental groups spanned concerns about water conservation, ongoing petrochemical reliance in cases where fossil fuels are used to produce certain types of "clean" hydrogen and the critical issue of time. From Food and Water Watch's Policy Director Jim Walsh:

"In a moment when every political decision that we make must reject fossil expansion, the Biden administration is going in the opposite direction.”

Joan Meiners is the climate news and storytelling reporter at The Arizona Republic and azcentral.com. Before becoming a journalist, she completed a doctorate in ecology. Follow Joan on Twitter at @beecycles or email her at joan.meiners@arizonarepublic.com. Read more of her coverage at environment.azcentral.com.

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This article originally appeared on Arizona Republic: Arizona to pursue clean hydrogen fuels without federal funding