South Dakota could soon regulate hydrogen pipelines, same as carbon

Just as the South Dakota's Governor's Office of 2009 foresaw the need for carbon dioxide pipelines to come under the purview of state regulators, so too did this year's legislative body decide the same for hydrogen transmission.

House Bill 1034, a bill requiring hydrogen pipelines to be permitted by the South Dakota Public Utilities Commission, was passed on a 27-5 vote by the South Dakota Senate on Wednesday.

HB 1034 now awaits Gov. Kristi Noem's signature to be made law.

The legislation was largely uncontested in the House, as it received a unanimous "yea" vote from the Commerce and Energy Committee on Jan. 12 and a 66-3 vote from the chamber on Jan. 16.

But in the equivalent Senate committee, the bill had a narrower split, earning a successful 5-3 vote to send it to the chamber floor.

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In 2009, South Dakota lawmakers passed House Bill 1129, which established the PUC's authority over carbon dioxide pipelines 13 years before they ever received a formal permit to build such a transmission network.

Similarly, today's HB 1034 is meant to be a forward-looking bill. Its passage would ensure a process exists for hydrogen pipelines to be permitted in the state, as long as potential projects withstand the PUC's regulatory oversight.

During the Jan. 12 committee hearing, PUC Commissioner Chris Nelson explained the quasi-judicial body has not received any permit applications related to hydrogen pipelines.

However, Nelson noted an interest in green hydrogen development has been spurred by the Biden Administration in the form of "hydrogen hubs."

One such network, the Heartland Hydrogen Hub (HH2H), has been proposed by University of North Dakota's Energy & Environmental Research Center, Marathon Petroleum Corporation, TC Energy, and Xcel Energy, a Minneapolis-based electric utility company and natural gas provider that services parts of eastern South Dakota.

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The project comprises three hydrogen production facilities in Minnesota, North Dakota and South Dakota. According to EERC's project website, the hub would be able to "produce commercial-scale quantities of clean hydrogen" for use in fertilizer and power generation. The hub also promises to create 3,800 jobs across the multistate region.

Currently, the project is in the "concept development phase," the first part of a four-phase approach.

The project developers are looking to northeast South Dakota as the site of a "Wind to Ammonia" production facility. The state's wind energy resources will be used to power electrolysis, the process of using electricity to split water into hydrogen and carbon, with the additional benefit of producing ammonia and urea fertilizer.

Potential hydrogen pipeline routes for the project have yet to be determined. Nelson told the House committee it was uncertain if the hydrogen hubs would use pipelines as their connective infrastructure.

According to the Office of Clean Energy Demonstrations, an agency within the U.S. Department of Energy, the HH2H would use pipeline infrastructure to move hydrogen gas across states.

In response to an inquiry to Argus Leader, Xcel Energy, one of the partners involved in the hub, denied plans to build pipelines in South Dakota.

The hydrogen hub's website indicates "connective infrastructure" will be used to transport low-carbon hydrogen produced in the region.

"Connective infrastructure refers to infrastructure required to transport intermediates and products along the supply chain and can include truck, rail, barge, pipeline, etc.," said Nikki Krueger, director of communications and information services of the Energy & Environmental Research Center, a University of North Dakota research facility and one of the hydrogen hub's partners.

This article originally appeared on Sioux Falls Argus Leader: South Dakota wants to regulate hydrogen pipelines, same as carbon