In 2022, the Department of Energy launched the $8 billion Regional Clean Hydrogen Hub initiative with the goal of accelerating commercial deployment of clean hydrogen. This program later allocated $925 million to the Appalachian hydrogen hub, also known as ARCH2. Almost all of the hydrogen produced by ARCH2, however, would be created from natural gas, a feedstock that is anything but clean. How did this happen?
Innocuous Origins
To understand how we got to this point, we have to go back to the statutory language guiding the creation of the hydrogen hubs. The Regional Clean Hydrogen Hubs program was created by the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL). Now codified at 42 U.S. Code § 16161a, this statute directs the Department of Energy to establish a program to support the development of at least four clean hydrogen hubs.
These hydrogen hubs were expected to “develop a national clean hydrogen network to facilitate a clean hydrogen economy.” The language in the statute encouraged diversity in the feedstock used to produce this hydrogen, the end-uses planned for this hydrogen, and the regions where these hubs would be located. The statute also called for at least two hubs “in the regions of the United States with the greatest natural gas resources” and allowed for the consideration of hydrogen produced from natural gas in its definition of clean hydrogen. This section of the BIL was “inspired” by H.R. 4904, a bill introduced by Representatives Brian Fitzpatrick (R-PA), Mike Doyle (D-PA), and Conor Lamb (D-PA).
H.R. 4904, titled the Clean Hydrogen Energy Act, likewise called for the creation of a clean hydrogen standard and the development of regional clean hydrogen hubs. However, the bill summary and the accompanying press release both reference the importance of supporting the commercialization of electrolysis and neither directly references the use of natural gas for the production of hydrogen aside from the possibility of “utilizing existing infrastructure and fuel supplies.” Even more notable is the fact that the only direct reference to natural gas in either the bill summary or the press release is through an unfavorable comparison with the combustion of hydrogen, which produces only water and NOx in contrast to the greenhouse gas emissions of burning fossil fuels. This is a curious choice from three members of Congress representing the second-largest natural gas-producing state in the U.S.
Like the BIL, H.R. 4904 incorporates fossil fuels in a number of ways but the presentation of the bill invites a reading where Appalachia, a region dominated by fossil fuels, could receive a massive infusion of federal funding to jumpstart a regional network of clean electricity and clean hydrogen production. It’s possible that the framing of the legislation was not intentional or, if it was, that it was done so in order to present yet another fossil fuel subsidy as something that would fix the climate crisis rather than deepen it. But this is an easy conclusion to draw now, years after the hydrogen hub program launched and our region was set to be saddled with even more pollution infrastructure.
Stacking the Deck
At the time, it was not a foregone conclusion that Appalachia was to receive a natural gas-powered hydrogen hub but many forces in our region were working hard to make it so. Throughout the course of 2021 and 2022, the Ohio River Valley was the subject of growing calls to enlist the region’s vast natural gas and geologic resources in the struggle to decarbonize heavy emitters in the industrial sector:
- Representatives from EQT, AFL-CIO and others met in May 2021 to discuss industrial decarbonization strategies, including “the conversion of natural gas being produced in Appalachia into hydrogen”
- Energy Futures Initiative and the American Federation of Labor and Congress of Industrial Organizations hosted a workshop in July 2021 focused on “the value of hydrogen and CCS market formation” in the Ohio River Valley
- MIT’s Roosevelt Project released a draft report in October 2021 recommending, among other actions, the development of hydrogen and carbon capture and storage “to continue the use of existing fossil fuels in ways consistent with the rising demand for low greenhouse gas production”
- Battelle and Equinor, companies that would later go on to lead competing hydrogen hub proposals, signed a memorandum of understanding in February 2022 “to examine the regional potential for carbon capture and storage”
- EQT, Equinor, Marathon Petroleum, Mitsubishi Power, Shell Polymers, and U.S. Steel — all companies that would later be affiliated with hydrogen hub proposals — formed an “alliance” in February 2022 to pursue “a shared vision for a low-carbon and hydrogen industrial hub” in Ohio, Pennsylvania, and West Virginia
- National Energy Technology Laboratory released a report in March 2022 assessing “the potential for the Appalachian region to develop a hydrogen economy with fossil-derived hydrogen with CCS production”
What these initiatives all had in common was the understanding that the sources of our region’s industrial pollution were not liabilities but assets and that Appalachia’s natural gas industry could continue to operate business-as-usual.
To be sure, industrial activities are a significant source of greenhouse gas emissions in Appalachia and our policymakers have yet to invest in the interventions needed to reduce or eliminate the climate footprint of this sector. However, the scope of responses to this problem has been limited by the misguided expectation that the existing fossil fuel industry is not a central contributor to the problem but the key to solving it.
These boosters and beneficiaries largely sought to use natural gas to produce hydrogen, which could then be substituted in place of fossil fuels to limit carbon emissions in applications as diverse as power generation, heavy industry, transportation, and residential heating. This hydrogen production would be paired with technology that its supporters hope will allow operators to capture their carbon emissions and transport them to facilities where they can be stored in deep geologic formations for hundreds or thousands of years.
Time and time again, the response from policymakers and industry to the immense sources of pollution in the Ohio River Valley and the immiseration resulting from the capital-intensive but not labor-intensive industries we’re saddled with entails only minor adjustments that maintain our region’s landscape of fossil fuel infrastructure and the associated health impacts.
A Headless Blunder
Momentum on its own was not enough to call into existence a proposal like the Appalachian hydrogen hub. These interest groups also required the support of the people whose hands were on the levers, a role these functionaries, it turns out, were more than comfortable playing.
To oversee the hydrogen hub program, the Department of Energy created the Office of Clean Energy Demonstrations, also known as OCED. Founded in 2021 and authorized by the Bipartisan Infrastructure Law, OCED’s mission was to deliver demonstration projects at scale in partnership with the private sector. The $8 billion hydrogen hub program was a significant part of OCED’s $62 billion portfolio.
Through the funding opportunity announcement and the resulting cooperative agreement with each hydrogen hub, OCED had “shared responsibility” for the success of each hub and was expected to have “substantial involvement” in the hubs’ implementation. At the same time, OCED was expected to evaluate the progress of each hub and decide whether the projects could continue to receive further allocations of funding. This placed OCED staff in an awkward position where any interest in disciplining the hubs had to be tempered with the expectation that OCED was as responsible for the success of the project as the hub backers themselves. In this way, OCED was more like a project partner or industry consultant than a regulator, a dynamic that became apparent during conversations with advocates and community groups in Appalachia.
The first signs of trouble could be seen in OCED’s treatment of the statutory language. The section of the Bipartisan Infrastructure Law involving the hydrogen hubs included criteria that called for at least one hub that would produce hydrogen from natural gas. The BIL also called for “at least 2 regional clean hydrogen hubs… in the regions of the United States with the greatest natural gas resources.” However, this criteria was qualified with statutory language that these conditions should be established “to the maximum extent practicable.” In other words, these criteria were intended to be a guide, not a mandate. Similarly, the statute did not suggest that these gas-producing regions should host a hub producing hydrogen from natural gas.
Unfortunately, OCED interpreted this language in the narrowest possible sense and at least four of the seven designated hydrogen hubs relied heavily on hydrogen produced using fossil fuels, including the two hubs located in the largest natural-gas producing regions of the country: HyVelocity in the Gulf South and ARCH2 in Appalachia.
At the same time, OCED failed to take advantage of the expansive discretion it was imbued with through the Bipartisan Infrastructure Law. Section (c)(4) of the authorizing statute allows the agency to “take into consideration other criteria that… are necessary or appropriate to carry out this subchapter.” At first glance, it might seem that OCED’s use of community benefit plans in the hydrogen hub program might be an example of this broad discretion. These plans were intended to “support meaningful community and labor engagement” and “[a]dvance diversity, equity, inclusion, and accessibility.” However, the plans were actually a response to the now-rescinded Executive Order 14008, which sought to ensure that “40% of the overall benefits of certain federal investments flow to disadvantaged communities.”
The community benefit plan for ARCH2, as implemented by OCED, failed to set any meaningful equity, engagement, or environmental justice requirements for the hydrogen hub. Despite the agency’s emphasis on “two-way engagement,” the agency did not mandate that applicants consult with local communities or even disclose information about their projects prior to submitting their applications. This hands-off approach allowed ARCH2 to require that interested parties sign a non-disclosure agreement prior to divulging any project details with seemingly no repercussions.
A more courageous OCED might have evaluated ARCH2 on the basis of the pollution and local harms associated with its planned activities or used the $925 million funding award to discipline the hub. Instead, OCED chose to do the easiest thing, which was to do nothing at all and let events unfold along the well-worn path carved out by the natural gas industry and its enablers.
The Unnatural World
When announcing the slate of designated hydrogen hubs, a key agency leader remarked that federal officials were “once again coming to frontline communities to ask them to bear the burdens of the clean energy transition simply because so much of the existing energy infrastructure already exists in those communities.” This admission mirrored the strained logic of the boosters that spent the months leading up to the passage of the Bipartisan Infrastructure Law making the case for CCS and natural gas-powered hydrogen — the argument that since natural gas is so damaging to the climate we must use it to produce hydrogen.
This sleight of hand, now mimicked by OCED, relies on the abundance of natural gas in our region and the problems created by its continued extraction to naturalize their chosen strategy. These actions foreclose on any alternatives that don’t accept the starting principle that pollution is Appalachia’s status quo and must be maintained at any cost. We cannot forget that these conditions do not arise naturally from our region’s physical or geologic characteristics; instead, it is people that made this so and people that can act to make it otherwise.
This is the first article in a series about the past, present, and future of ARCH2.