This story was produced by Public Health Watch and published in partnership with Grist. Billions of dollars in public money are beginning to flow to seven “hydrogen hubs” around the country — regional nerve centers for a potentially clean fuel that could someday rival solar and wind and cut carbon from the atmosphere. On July 17, California’s hub, a public-private partnership called ARCHES, became the first to negotiate an agreement with the Department of Energy to build out hydrogen power plants, pipelines, and other projects. But researchers and community advocates warn that unless the federal government’s so-called hydrogen earthshot has adequate safeguards, it could worsen air pollution in vulnerable communities and aggravate a warming climate. They’re also concerned that specifics of the emerging efforts remain stubbornly secret from people who live near shovel-ready projects. That’s true even in California, a state that has declared a commitment not only to ambitious climate goals but also to environmental justice.
“The people got left behind in this conversation,” said Fatima Abdul-Khabir, the Energy Equity Program manager at Oakland-based Greenlining Institute, an advocacy group. “It’s a massive step backwards.” Hydrogen, a colorless, odorless gas, is the world’s most abundant chemical element. When it’s used in fuel cells or burned for energy, it generates no atmosphere-warming carbon emissions. That means it could power trucks and airplanes without spewing soot from a tailpipe or exhaust from an engine. Hydrogen could help steel plants and other heavy industries lower their carbon footprints. A hydrogen engine on display at the technology conference CERAWeek in Houston in 2023. Chen Chen / Xinhua via Getty Images
But stripping hydrogen molecules from water or methane to use as fuel can be expensive and complicated, and if that process relies on fossil fuels, it could actually prolong climate pollution. That’s not the only health risk: When even cleanly-produced hydrogen is blended with methane and burned, it can still dirty the air with toxic byproducts that contribute to lung-irritating smog. The nation’s hydrogen earthshot is a risky and ambitious bet. Congress created an $8 billion pot of money for the hub system. It also tucked nearly $18 billion in grants and incentives into the Inflation Reduction Act and the infrastructure bill. An uncapped federal tax credit for companies that produce hydrogen energy could cost the public at least another $100 billion.
“There’s so much hype right now for hydrogen because everybody wants a piece of the pie,” said Dan Esposito, an electricity policy analyst at the nonprofit firm Energy Innovation. To bring clean hydrogen to market as quickly as possible, the U.S. Department of Energy selected regional hubs based in part on their ability to quickly produce and find uses for clean hydrogen. The chosen hubs also must promise jobs and other community benefits that advance federal environmental justice goals. But California’s hub, a public-private partnership called ARCHES, is rejecting rules the federal government has proposed to help guard against the risk of rising pollution from incautious hydrogen projects. Along with the six other hubs, ARCHES signed a letter that warns of “far-reaching negative consequences” if the rules are made permanent. The Biden administration has set aside billions of dollars in grants, incentives, and tax credits for companies investing in new hydrogen energy. Anna Moneymaker / Getty Images
The position held by ARCHES is directly contrary to that of experts who say such rules are the only guarantee that this huge investment will lead to a sustainable hydrogen economy. “What our research has shown is that if we do this wrong from the start, either the hydrogen industry will fall apart or it’s going to lose a bunch of public support or it will really significantly delay our ability to clean up the power grid,” Esposito said. Multiple analyses based on public data and modeling, including Esposito’s own, have concluded that hydrogen produced under the wrong circumstances could worsen air pollution instead of improving it. So far, the message from ARCHES is: Trust us. Trust California to do what is right with the $1.2 billion it has been awarded for its hub. Trust the hub’s projects to cut carbon and lung-searing emissions from the air.
“There’s reason to trust California,” said Dan Kammen, an energy professor at the University of California, Berkeley. “But only if California continues to follow the rules that California created.” California’s hub began as an agreement among the Governor’s Office of Business and Economic Development, or GO-BIZ, the University of California, the state building and trades unions and a nonprofit called Renewables 100, founded by ARCHES CEO Angelina Galiteva. It has around 400 network partners, including Amazon, Cemex, Chevron and investor-owned utilities, including SoCal Gas and Edison International. Building on the state’s development of the world’s first standard to cut the carbon intensity of fuel, ARCHES promises to develop zero-carbon hydrogen using solar, wind, biomass and other renewable sources. “We came together to go after the federal funding, but that federal funding is just a start,” said Tyson Eckerle, a senior advisor for GO BIZ, at an environmental think tank’s conference in the spring. “It’s the pebble that launches the avalanche.” But California argues that its progress will be slowed if hydrogen developers have to meet rules the U.S. Department of the Treasury has proposed for projects seeking the lucrative 45V tax credit. Angelina Galiteva is CEO of California’s hydrogen hub, which is the first in the country to negotiate terms with the U.S. Department of Energy for a billion-dollar award. Courtesy of the California Hydrogen Leadership Summit Those rules are based on what energy experts refer to as the “three pillars” of clean hydrogen production. To make hydrogen clean and sustainable, it should be produced from a new source using carbon-neutral electricity. That electricity should be geographically close to where it’s needed, so delivering it isn’t costly. It should also be available when it’s needed, not traded or obtained through accounting from another time and place. California’s hydrogen leaders counter that the state already has a successful strategy — and numerous requirements — for getting clean energy on the grid. Complying with the federal rules would undermine that progress, ARCHES has said in a public response, making it “impossible” to integrate hydrogen “in a timely and cost-effect manner without disrupting our carefully calibrated energy system.” “We’re at almost 60 percent, 24/7 renewables across the board, which is a huge, huge step forward. We’re ahead of our goals in terms of meeting those obligations,” Galiteva told Public Health Watch. If these federal conditions “had been required for the nascent solar or battery or any other industry, those industries would never have taken off,” she said. Julie McNamara, a senior energy analyst at the Union of Concerned Scientists, called California’s position contradictory. Even if the state’s renewables-rich grid deserves freedom from constraining rules, why would California support a free-for-all that gives states that continue to depend on fossil fuels a pass? “ARCHES is trying to have it both ways,” she said. Fossil fuel-focused energy companies, including BP and Shell, have also argued for more leeway in qualifying for the federal money. Clean hydrogen could be the angel of decarbonizing the energy sector, but Earthjustice senior research and policy analyst Sasan Saadat said that poorly defined hydrogen could be the devil, because it might prolong the use of fossil fuels. “You’ve taken this thing that is really dangerous and muddled it up with the world of climate solutions and clean energy and that’s why it’s so risky,” Saadat said. “The fossil fuel industry knows this and they can blur the lines.” ARCHES has prioritized 37 projects to spend its federal money, according to CEO Galiteva. This “tier one” investment reflects the hub’s vision for bringing clean hydrogen to California. “We have another 33-plus projects … that can actually slide into a tier one project if a tier one project hits a bump on the road for any reason,” she said at a recent hydrogen trade conference in Sacramento. “So the economy and the scale is going to be pretty big once we start moving.” There’s an incentive to move quickly: To qualify for the federal tax credit, shovels have to be in the ground by 2032. In Los Angeles County, the Element Resources Project could be one of 37 projects granted money by California’s hub, ARCHES. The city of Lancaster’s project promises…
