Federal Hydrogen Program Is Cutting Out Local Groups, Threatening Climate Goals, Advocates Say

As a key piece of President Joe Biden’s climate agenda takes shape, environmental groups are warning that his administration is undermining its own goals by shielding a federal grant program from public scrutiny. 

The Energy Department’s $8 billion clean hydrogen program is poised to begin funding projects later this year, but officials have refused to disclose information about who has applied or how applicants plan to use the public money.

Some of the nation’s largest environmental groups joined with local organizations in a letter sent last month to Energy Secretary Jennifer Granholm, saying that the lack of transparency was leaving communities “entirely in the dark about planned projects, with little to no opportunity to meaningfully weigh in.”

The clean hydrogen program was established by the 2021 bipartisan infrastructure law to help finance the construction of “hubs” around the country that would produce and use the climate-friendly fuel. The goal is to help cut carbon pollution from sectors of the economy that will be difficult to electrify, like heavy manufacturing and long-haul transport.

But many scientists and climate advocates have warned that new hydrogen projects could also have local impacts and safety risks that need to be disclosed and addressed, and might fail to substantially cut climate pollution if they are not developed properly.

“It’s a huge opportunity there that we’re really excited about,” said Pete Budden, who leads state and regional-level hydrogen policy work for the Natural Resources Defense Council, one of the groups that signed the letter. But “there’s risks that if we do it wrong we can delay other climate action and we can even increase emissions if we’re using dirty hydrogen,” he added. ”We want to make sure that there’s an appropriate level of scrutiny on these plans.”

Hydrogen is currently used in a handful of industries, including oil refining. And because it burns without generating any climate pollution, it could be used to replace fossil fuels in other applications, from steel mill blast furnaces to cargo ship engines. Currently, however, most hydrogen is produced from natural gas in a process that releases large volumes of carbon dioxide. Using this “dirty” hydrogen to replace natural gas in a furnace, for example, would actually increase emissions.

The Energy Department program aims to support several cleaner methods of making the fuel. Hydrogen can be split from water with electricity, generating few emissions if the power comes from renewable sources or nuclear energy. Companies can also attach equipment to capture and store the carbon dioxide emissions when the fuel is made from natural gas.

Last year, the department received 79 “concept papers” from groups interested in applying for funding, and an unknown number sent final applications ahead of an April deadline this year. The department has declined to publish a list of who submitted concept papers or applications, or to disclose any details about the hub proposals. 

Applicants are free to discuss their proposals publicly, however, and many have given limited information. Most applications have come from consortiums of private companies, state and local governments and universities. 

In interviews, several local environmental groups around the country struck a common theme in response: Their organizations have either not been included in planning hub proposals, or have been asked to provide support too late in the process to help shape them.

Annie Regan, campaign director for PennFuture, a Pennsylvania environmental watchdog that signed the letter to Granholm, said an applicant in the region didn’t approach local advocacy groups until a few weeks before submitting their proposal. 

What’s more, she said, the Appalachian Regional Clean Hydrogen Hub—which includes the state of West Virginia, the gas driller EQT and other companies—required them to sign a non-disclosure agreement, or NDA, before sharing details about their proposal.

“If you have to sign an NDA to see the full plan, it’s not a sign of good community input,” Regan said. PennFuture declined to sign the non-disclosure agreement or lend its support to the proposal.

Stephanie Pethtel, a spokesperson for the Appalachian hub, known as ARCH2, said the group was “actively working” to communicate with people in the region and that “outreach and engagement efforts with relevant communities associated with specific projects proposed under ARCH2 are underway or are planned on a timeline appropriate to each project.”

In Texas, Erandi Treviño, an organizer with Public Citizen, a national watchdog group, described a similar process in Houston, where a consortium of local governments, universities and some of the nation’s largest energy companies has applied for funding.

“A lot of these projects in the Houston area, they’re all going to go into environmental justice neighborhoods,” Treviño said, referring to largely Latino communities clustered along the Houston Ship Channel that have some of the dirtiest air in the nation. Treviño works with a coalition of groups focused on pollution in the area, and while she said the groups are not opposed to expanding clean hydrogen production, they have not been involved in any of the planning. Public Citizen was not among the groups that signed the letter to Granholm.

According to its website, the Gulf Coast’s HyVelocity Hub would produce hydrogen mostly from natural gas, with a smaller amount from renewably-generated electricity. The hydrogen would be used in heavy industry, vehicles and for generating power. 

ExxonMobil, which is a partner on the application, has said it plans to build a major hydrogen production plant at its Baytown refinery and petrochemical complex that would make the fuel from fossil gas while using carbon capture equipment to reduce climate emissions. The company has yet to make a final investment decision on the project.

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Treviño and others are concerned that these projects will fail to address the toxic pollution that spews from the area’s refineries and petrochemical plants, and may even add to it. Safety is top of mind, too, she said: The region had three refinery fires last month, one of which killed a worker.

“The same people can’t keep being sacrificed time and time again,” Treviño said.

Brian Weeks, a spokesperson for the HyVelocity Hub, said the application process “includes at least 12 to 18 months of community benefits planning and community stakeholder outreach before any hub-related projects are funded. The HyVelocity Hub team looks forward to working with many community organizations, other clean regional hydrogen hubs, and stakeholders once the initial [Energy Department] proposal review process is complete.”

On the Navajo Nation, which is a part of at least one hydrogen hub application, some communities have not been able to weigh in on project proposals, said Jessica Keetso, an organizer with Tó Nizhóní Ání, a Navajo, or Diné, advocacy group that signed on to the letter to Granholm. Keetso said she wanted to know more about the water demands of hydrogen projects—many residents of the nation do not have access to running water—and expressed concerns about a pipeline being planned to carry hydrogen there.

The Energy Department declined to make anyone available for an interview, but Jeremy Ortiz, a spokesperson, said in an email that “due to the confidential nature of the applications, the Department is not planning on releasing more information on the applicants until award selections have been made—including the number of applications received.” He added that the government will release more information when projects “enter the negotiation phase” and after awards are announced in the fall.

He noted that all applicants will be required to develop “community benefits plans” describing how they will work with residents and labor groups.

Clark Miller, the director of the Center for Energy & Society at Arizona State University, said those plans should ensure meaningful engagement. Miller is leading the community benefits planning for the hydrogen hub proposal that would include Arizona, Nevada and the Navajo Nation, and he said he understands the concerns being raised by environmental groups.

“The letter is right. Community trust is critical around the development of these industries, and that requires engagement, openness, dialogue,” Miller said. But he noted that the grant program is structured with multiple phases and that the awards this year will allocate money only for planning. It will be three or four years before any construction begins, he said, during which there will be ample opportunity for groups to help shape projects.

“The guidance makes clear that community sentiment has to be an important element in the development of projects,” Miller said. “Community engagement has to go substantially further than just letting people know that they’re going to build a project.”

One of the biggest concerns of environmental groups is that the hydrogen produced by the hubs won’t be all that clean. If it is produced from natural gas, for example, leaks of methane, which is the primary component of natural gas, can counteract any carbon dioxide that is captured by equipment. Over 20 years, methane in the atmosphere traps more than 80 times more heat than carbon dioxide.

The final use of the hydrogen is important, too. Some utilities have been pushing to mix hydrogen into pipelines to be used in home heating and cooking. Some research has shown that would be an inefficient use that would consume far more energy than if homes used electricity instead. There are similar concerns for when hydrogen is used to generate electricity.

For all these reasons, the environmental groups are calling on the Energy Department to release more information about the applications. The groups also asked the department to open a public comment period before announcing awards.

“We want to see some information being disclosed, especially about impacts to greenhouse gas emissions, the types of end uses that are being proposed, the public health impacts and pollution impacts of these projects so that we can actually facilitate meaningful engagement, particularly with the communities that these projects are going to affect,” Budden said. “Because if we wait until they’ve already picked their chosen projects, it really narrows the scope of the impacts that that engagement can have.”

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