Hydrogen Hub Hoopla Raises Hope and Troubling Question
Jim Willis on NGL Pipelines
Editor & Publisher, Marcellus Drilling News (MDN)
[Editor’s Note: Pennsylvania could be the home of a new hydrogen hub that will utilize Marcellus Shale natural gas, but why is our commonwealth not working with other states?]
Last November, the state of Pennsylvania decided to endorse a private industry application (by Shell and Equinor) instead of doing the hard work of submitting its own official application to attract a $1 billion hydrogen hub (see PA Decides to Back Shell/Equinor Application for $1B Hydrogen Hub). The Shell/Equinor project is called DNA H2Hub (Decarbonization Network of Appalachia).
Although most applicants vying for one of the 6 to 10 regional hydrogen hubs have released their applications (their “concept papers”) making them public, the DNA H2Hub has not. The PA project is keeping it secret–at least for now (see PA Officials Keep Secret Details of State Hydrogen Hub Application). Even though it’s secret to the public, the federal government likes what it sees in the concept paper and has given DNA H2Hub its blessing to continue on to the next step.
What is the next step? Filing a “full application” in early April. The first step was to file a concept paper last fall. Some 79 concept papers were received for what will likely be 6-10 projects that eventually get funded by the Bidenistas (using your money).
The feds have now informed the 79 submitters whether or not they have “Mother May I?” permission to proceed to the next step. No one from the West Virginia-led Appalachian Regional Clean Hydrogen Hub (ARCH2) proposal has said whether or not that project received a green light for step two. Our money has been on the ARCH2 proposal, given the broad coalition of states, companies, and organizations (over 200) that support it, including Ohio (see Finally! Ohio Joins Effort to Locate Hydrogen Hub in West Virginia), and now, Kentucky (see today’s companion post).
At any rate, PA is blowing the trumpet that they’ve been green-lighted for the next round.
From the Pittsburgh Business Times:
Pennsylvania’s hydrogen hub application has been given the green light by the U.S. Department of Energy to go to the next step in the quest for about $1 billion in federal funding.
The local initiative, called the Decarbonization Network of Appalachia, or DNA H2HUB, involves Shell, Equinor and United States Steel Corp. (NYSE: X) along with the lead applicant, Team Pennsylvania Foundation, and others. It’s vying for up to $7 billion in overall funding for the development of large-scale deployment of hydrogen hubs that would create clean energy for fossil fuel-heavy industries like steel, cement and plastics manufacturing.
Another effort, called ARCH2, is being backed by West Virginia and Battelle, and also includes a number of Pittsburgh-region companies, including EQT Corp. and CNX Resources Corp.
The initial step, a concept paper outlining the potential hydrogen hub, was due late last year. DOE has been reviewing them over the past several weeks and sent feedback. There were 79 concept papers received across the country, including the ones by Team PA and West Virginia, along with another application in Philadelphia, for between seven and 10 projected funding of hydrogen hubs. The concept papers and the DOE responses have not be released publicly.
Pennsylvania’s application received encouragement to take the next step, which is a full application in early April.
Team PA was tapped by the Wolf administration to be the lead applicant for the funding for Pennsylvania. Team PA in turn started a separate organization, Decarbonization Network of Appalachia LLC, to manage the process so that it doesn’t get in the way with all the other things Team PA does.
“This is an opportunity that demands collaboration,” said Abby Smith, president and CEO of Team PA. “The DNA H2Hub represents a commitment by a broad-based coalition of partners to the economic and environmental future of Ohio, Pennsylvania and West Virginia.”
Pennsylvania’s application involves the production of hydrogen from natural gas to be then provided to steel and chemical manufacturers, along with carbon capture and storage.
“The energy transition presents a generational opportunity for leadership in industrial decarbonization and low-carbon manufacturing,” said Pennsylvania Gov. Tom Wolf, who also supports the effort. “The members of DNA are ready to develop a large, low-CO2 infrastructure network to provide a pathway to sustain and grow family-sustaining wage jobs while delivering industry-wide decarbonization.”
The Allegheny Conference on Community Development and Carnegie Mellon University, are also involved in the Pennsylvania application.
From the Pittsburgh Post-Gazette:
The Pennsylvania-blessed effort to develop a “blue hydrogen” hub in the region, which would use natural gas to make the new fuel, has secured encouragement from the U.S. Department of Energy, which is overseeing a fierce competition for $7 billion in hydrogen hub funding.
The Keystone state proposal, dubbed Decarbonization Network of Appalachia (DNA), submitted its concept paper to the energy department in the fall, along with 79 other consortia, including a West Virginia-based effort that includes some of the same companies.
Team Pennsylvania, a public-private partnership between the state and industry, announced Friday that its proposal with Shell and Equinor as technical leads, passed the first hurdle in the federal funding process.
While the partnership has declined to provide the details of the project, the concept revolves around a cluster of facilities that would use hydrogen derived from natural gas to decarbonize their operations.
The carbon emissions that result from turning methane into hydrogen would be captured and sequestered in geological storage wells, which have not yet been developed. That would create another industry for the hub — carbon dioxide management, transportation, and storage.
Federal money available for these hubs stems from the Infrastructure Investment and Jobs Act of 2021, which sought to establish several such centers across the country.
The DOE, which is administering the program, said it would issue ‘encourage’ or ‘discourage’ notices to applicants in order to prevent projects that aren’t as likely to win funding from spending more money on preparing a full application, due by April 7.
According to the Department of Energy, 33 applicants received encouragement to proceed, although any of the discouraged entities could still go forward with a full submission. The agency didn’t release the names of the groups, leaving it up to them to disclose the news as Pennsylvania’s team did on Friday.
Teams in California, Colorado, Texas, Louisiana and Hawaii announced receiving notices of encouragement, too.
A West Virginia-based effort called Appalachian Regional Clean Hydrogen Hub, or Arch2 — which includes EQT Corp., Peoples Natural Gas, CNX Corp., and a number of other Pennsylvania-based companies — has not yet said which notice it received from the DOE.
We remain keenly interested in the issue of hydrogen hubs because 95% of the hydrogen created today comes from cracking natural gas. A hydrogen hub has the potential to be a HUGE new customer of Marcellus/Utica gas. That is, IF we don’t blow our opportunity to grab one of these hubs in our region. The lack of cooperation by PA with WV and OH to attract the project in a joint application is troubling.
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