Regional Hydrogen Hubs: Developing the Transit for Energy Transition

In this episode, we're diving into the fascinating shift in the US energy landscape.

Seven regional hydrogen hubs across the US will receive $7 billion in funds from the Bipartisan Infrastructure Law, and today's episode explores what that means for those seven regions.

Read the full article.

About the authors:

Paul B. Turner

Lisa Rushton

Jeffrey S. Whittle

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.
 
 With a focus on innovation, collaboration and client service. We are committed to delivering exceptional value to our clients and to the communities we serve. And now our latest episode.

 Welcome to Womble Perspectives. It’s Thursday, October 19 and a new episode means a new cybersecurity tip.

Earlier this week, we shared some steps you can take if you’re the victim of a cyberattack. But what are the steps you should take if you’re a victim of a cyberattack at your place of business?

 First, follow your organizations protocol and report the incident to whoever is identified. If you’re not sure what the protocol is, now is the time to familiarize yourself with the steps included.

 Some of the immediate steps to take may include completely disconnecting from the internet, updating your operating system and security settings, and changing all of your work-related passwords.

When it comes to responding to cyberattacks, speed is of the essence. Act fast and you may help prevent both financial and reputational damage to your company.

In Tuesday’s episode, we discussed a recent announcement outlining the U.S. government’s plan to grow low-cost, clean hydrogen. Today, we’re digging deeper with insights from an article written by Paul Turner, Lisa Rushton, and Jeff Whittle.

In Jules Verne’s The Mysterious Island, published in 1874, Verne wrote “I believe that water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light, of an intensity of which coal is not capable. …Water will be the coal of the future.” 

Although reliance on coal has been declining, even in 2021, coal supplied over ten percent of the United States’ energy consumption, according to the EIA. But, in a matter of approximately fifteen years, many hope that Verne’s vision may be realized and that hydrogen will emerge as a plentiful, flexible, and inexpensive source for many of our energy and transportation needs, while significantly reducing the carbon impact on the world around us. In a relatively short period of time, that is to say by 2050, the Biden-Harris administration hopes to achieve a zero net carbon impact for the United States economy. In part to further that goal, on November 15th, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act, often referred to as the “Bipartisan Infrastructure Law.” 

This law, among other things, includes a number of incentives and programs related to clean drinking water, high-speed internet, and clean energy initiatives. Many have focused on the significant expenditures related to solar panel and battery technologies and manufacturing. But the Bipartisan Infrastructure Law also contains billions of dollars targeted for the development and commercialization of hydrogen as a significant fuel to decrease reliance on fossil fuels and the related carbon emissions associated with such fuels.

More specifically, the Bipartisan Infrastructure Law seeks to establish several regional clean hydrogen hubs -- a network of clean hydrogen producers, consumers, and infrastructure. They aim to advance the use of clean hydrogen in various sectors, such as manufacturing, transportation, and energy storage with the ultimate goal of scaling hydrogen production to make it cost competitive and cost effective.

As a significant step toward such commercialization, seven Regional Hydrogen Hubs were recently selected to receive up to a combined $7 billion in public funds from the Bipartisan Infrastructure Law. The law provides for up to $8 billion in such hydrogen-related projects. Under the approved hubs’ applications, such funds would be joined by $40 billion in private funds to further the use of hydrogen in energy production, transportation, agricultural production, and steel and glass manufacturing. The Regional Hydrogen Hubs also strive to lower costs associated with hydrogen production, storage methodologies and facilities, and to facilitate the commercialization of carbon capture technologies.

As mentioned in our previous episode, the seven Regional Hydrogen Hubs selected on October 13, 2023, were: Appalachian Hydrogen Hub, California Hydrogen Hub, Gulf Coast Hydrogen Hub, Heartland Hydrogen Hub, Mid-Atlantic Hydrogen Hub, Midwest Hydrogen Hub, and Pacific Northwest Hydrogen Hub.

By way of background, in September of 2022, the U.S. Department of Energy initiated a request to solicit feedback from industry, government agencies, state and local coalitions, academia, research laboratories, community-based organizations, and other stakeholders regarding the solicitation process and implementation strategy for between six and ten regional hydrogen hubs and up to $7 billion in public funds. In response, the DOE received 79 initial concept papers for regional hydrogen hubs. After assessing these papers, the DOE provided feedback on the proposals and encouraged the filers of 33 proposal papers to complete and submit final applications for the program. Approximately twenty applications ultimately were submitted, and, on October 13, 2023, the DOE identified seven successful hub projects to move forward.

The Appalachian Hydrogen Hub will leverage the region’s ample access to low-cost natural gas to produce low-cost clean hydrogen and permanently store the associated carbon emissions. The strategic location of this hub and the development of hydrogen pipelines, multiple hydrogen fueling stations, and permanent CO2 storage also have the potential to drive down the cost of hydrogen distribution and storage. The Appalachian Hydrogen Hub is anticipated to bring quality job opportunities to workers in coal communities and create more than 21,000 direct jobs—including more than 18,000 in construction and more than 3,000 permanent jobs, helping ensure the Appalachian community benefits from the development and operation of the Hub. 

The California Hydrogen Hub will leverage the Golden State’s leadership in clean energy technology to produce hydrogen exclusively from renewable energy and biomass. It will provide a blueprint for decarbonizing public transportation, heavy duty trucking, and port operations. These key emissions drivers in the state and sources of air pollution are among the hardest to decarbonize. This hub has committed to requiring Project Labor Agreements for all projects connected to the hub, which will expand opportunities for disadvantaged communities and create an expected 220,000 direct jobs—130,000 in construction jobs and 90,000 permanent jobs. 

The Gulf Coast Hydrogen Hub will be centered in the Houston region, the traditional energy capital of the United States. It will help kickstart the clean hydrogen economy with its plans for large-scale hydrogen production using both natural gas with carbon capture and renewables-powered electrolysis, taking advantage of the Gulf Coast region’s abundant renewable energy and natural gas supply to drive down the cost of hydrogen—a crucial step to achieving market liftoff. The Houston hub is expected to create approximately 45,000 direct jobs—35,000 in construction jobs and 10,000 permanent jobs. 

The Heartland Hydrogen Hub will leverage the region’s abundant energy resources to help decarbonize the agricultural sector’s production of fertilizer, decrease the regional cost of clean hydrogen, and advance the use of clean hydrogen in electric generation and for cold climate space heating. It also plans to offer unique opportunities of equity ownership to tribal communities through an equity partnership and to local farmers and farmer co-ops through a private sector partnership allowing local farmers to receive more competitive pricing for clean fertilizer. The Heartland Hydrogen Hub anticipates creating upwards of 3,880 direct jobs–3,067 in construction jobs and 703 permanent jobs. 

The Mid-Atlantic Hydrogen Hub will help unlock hydrogen-driven decarbonization in the Mid-Atlantic while repurposing historic oil infrastructure and using existing rights-of-way. It plans to develop renewable hydrogen production facilities from renewable and nuclear electricity using both established and innovative electrolyzer technologies, where it can help reduce costs and drive further technology adoption. As part of its labor and workforce commitments to the community, the Mid-Atlantic Hydrogen Hub plans to negotiate Project Labor Agreements for all projects and provide close to $14 million for regional Workforce Development Boards that will serve as partners for community college training and pre-apprenticeships. This Hub anticipates creating 20,800 direct jobs—14,400 in construction jobs and 6,400 permanent jobs. 

Located in a key U.S. industrial and transportation corridor, the Midwest Hydrogen Hub will enable decarbonization through strategic hydrogen uses including steel and glass production, power generation, refining, heavy-duty transportation, and sustainable aviation fuel. This Hub plans to produce hydrogen by leveraging diverse and abundant energy sources, including renewable energy, natural gas, and low-cost nuclear energy. The Midwest Hydrogen Hub anticipates creating 13,600 direct jobs—12,100 in construction jobs and 1,500 permanent jobs.

The Pacific Northwest Hydrogen Hub plans to leverage the region’s abundant renewable resources to produce clean hydrogen exclusively via electrolysis. Its anticipated widescale use of electrolyzers will play a key role in driving down electrolyzer costs, making the technology more accessible to other producers, and reducing the cost of hydrogen production. The Pacific Northwest Hydrogen Hub has committed to negotiating Project Labor Agreements for all projects over $1 million and investing in joint labor-management and state-registered apprenticeship programs. The Pacific Northwest Hydrogen Hub is expected to create more than 10,000 direct jobs—8,050 in construction jobs and 350 permanent jobs.

After the total investment in these hubs, an additional $1 billion in DOE hydrogen funds under the Bipartisan Infrastructure Law remain, for which the agency had issued a separate Request for Information. The DOE is assessing demand-side proposals for clean hydrogen.

The summer of 2023 was Earth’s hottest since global records began in 1880, according to scientists at NASA’s Goddard Institute of Space Studies in New York. NASA Administrator Bill Nelson said “Summer 2023’s record-setting temperatures aren’t just a set of numbers – they result in dire real-world consequences. From sweltering temperatures in Arizona and across the country, to wildfires across Canada, and extreme flooding in Europe and Asia, extreme weather is threatening lives and livelihoods around the world. The impacts of climate change are a threat to our planet and future generations….” 

The record-setting summer of 2023 continues a long-term trend of warming. Scientific observations and analyses made over decades by NASA, National Oceanic and Atmospheric Administration, and other international institutions have shown this warming has been driven primarily by human-caused greenhouse gas emissions. 

Many countries across the world are driving toward a goal of achieving net zero carbon emissions by 2050. This transition involves an aggressive timetable and will require significant changes, including new technologies and more efficient commercialization of existing technologies and processes, in some of the economy’s key sectors. Sectors such as energy, transportation, industrial manufacturing, etc. Such changes during the energy transition will no doubt require significant capital expenditures over the coming decades.

Significantly greater use of hydrogen in these sectors, and particularly clean hydrogen at much lower costs, will be important to moving toward a lower carbon footprint whether it be in fifteen years or thereafter. The important work of these multifaceted and diverse Regional Clean Hydrogen Hubs, as well as others in the industry, will hopefully make brisk and meaningful contributions to our energy, manufacturing, automobile, aviation, public transit, and heavy transportation sectors in our energy transition.

Thank you for listening to Womble Perspectives. If you want to learn more about the topics discussed in this episode, please visit The Show Notes, where you can find links to related resources mentioned today. The Show Notes also have more information about our attorneys who provided today's insights, including ways to reach out to them.
 
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