US fossil fuel industry wants to get involved in hydrogen production

In the months leading up to the historic US climate bill, Jim Justice, the billionaire coal magnate and West Virginia governor who believes in divine intervention as a solution to climate change, became a hydrogen advocate.

The unlikely advocate of a potentially cleaner form of energy was not alone. The US oil and gas majors joined him, collectively spending millions on lobbying campaigns in Washington to ensure hydrogen projects benefit from federal money.

For decades, hydrogen has been touted as a potentially revolutionary alternative to fossil fuels, with promises to power dirty heavy industry, replace car and airplane fuel, and serve as energy storage.

Last year, President Joe Biden allocated $8 billion under his infrastructure bill to establish regional hydrogen centers across the US, and this year the Department of Energy has already committed $1.5 billion in soft loans to two hydrogen projects.

Biden's new tax and climate package names hydrogen as one of the emerging clean energy industries eligible for lucrative $5.3 billion over 10 years in tax credits to boost the green sector in the US.

While hydrogen is a clean fuel when burned, producing only water, the process of producing it by electrolysis using coal or gas is not clean.

"Green" hydrogen uses renewable energy such as wind or solar power to power the splitting of the water atom into its hydrogen and oxygen components.

In contrast, the production of "blue" hydrogen with fossil fuels, promoted by oil and gas companies, is energy-intensive and causes relatively high greenhouse gas emissions.

Scientists and experts warn that the different processes used to produce hydrogen lead to significant differences in carbon emissions. Some believe that hydrogen should only be used where electrification is impossible.

According to estimates by scientists from Cornell and Stanford universities, the carbon footprint of "blue" hydrogen is 20 percent larger than directly burning gas to generate heat.

"Blue hydrogen is something that grew out of the oil and gas industry," says Robert Howarth, a professor at Cornell University and one of the authors of the study.

"If you make it from natural gas, you lose some of the energy in the conversion, the emissions are higher, it's more expensive than natural gas - it's just no better than natural gas," Howarth said.

But for executives at fossil fuel companies, the prospect of using oil and gas to produce hydrogen represents a major opportunity.

Shell, BP and Chevron have backed the Washington push for hydrogen. The three big oil companies sit on the board of the Clean Hydrogen Future Coalition, which says it wants to promote the development of a clean hydrogen industry in the United States. Their website demonstrates the use of fossil fuels to produce "clean" hydrogen, using carbon capture technology to capture the polluting emissions.

Shell, BP, ExxonMobil and Chevron have also individually held talks with lawmakers over hydrogen legislation, the filings show, which collectively spent $13 million lobbying in various areas in the first half of 2022 alone.

Two major trade associations representing the US gas industry have spent nearly $1 million to encourage investment in hydrogen and the inclusion of gas in US clean energy plans.

BP has already stated that it is considering green hydrogen in addition to blue. Exxon stated that "all types of low-carbon hydrogen will need additional political support." The group said it is "important to see the policy discussion move from focusing exclusively on wind, solar and electric vehicles towards carbon capture and storage, biofuels and hydrogen".

Just as Democratic Senator Joe Manchin voted to overturn the climate bill on the grounds of national energy security, his state of West Virginia has presented a wide-ranging bid that outlines its history as a mining power, coal association and oil - and State Gas Association as potential supporters of a new hydrogen center.

West Virginia isn't the only state looking to benefit from infrastructure bill funding: New York, Massachusetts, New Jersey and Connecticut have joined forces to propose a green hydrogen center that would use solar and offshore wind power for hydrogen production. Arkansas, Louisiana and Oklahoma have proposed a project that will produce hydrogen with gas and reduce emissions through carbon capture.

The Department of Energy defines "clean" hydrogen by the amount of carbon dioxide equivalents produced during its production. The new climate law rewards developers on a scale, with the lowest emissions receiving a maximum credit five times that of the most polluting process.

Rachel Fakhry, a hydrogen expert at the Natural Resources Defense Council, said there are similarities between gas companies' business models and a potential hydrogen industry that have prompted companies to support the prospect.

"You produce a gas, transport it, store it and reuse it," she said. "There is an interest in the gas industry to use the hydrogen economy to preserve and protect their business model."

However, Fakhry said hydrogen is a far less efficient source of energy than electrification and should be used judiciously. "We need to think about where hydrogen will play an important role because we don't have better alternatives, and where it's being touted as a solution where we already have better, proven solutions - in those cases, hydrogen is being used to derail solutions. "

Cornell's Howarth pointed to recent scientific work suggesting that hydrogen can interact with greenhouse gases like methane to extend their atmospheric lifetime. Hydrogen's small molecular size means relatively high levels of leakage in pipelines, he said.

His paper criticizing the carbon intensity of blue hydrogen met with fierce opposition from the oil and gas industry. A counter-statement was published in a scholarly journal, involving authors including a member of a BP advisory board and advisers from ExxonMobil and Total Energies, but who stated there was no conflict of interest.

The Environmental and Energy Study Institute, an independent, nonpartisan, and nonprofit research group, found that lawmakers on Capitol Hill have a poor understanding of the differing carbon profiles of different hydrogen production methods. "There is a lot of interest in the topic," said Daniel Bresette, a director of EESI. "But there's not much understanding of what makes it blue, gray or green."

However, Adria Wilson, policy and advocacy manager at Breakthrough Energy, the Bill Gates-backed clean energy investment fund, said he was pleased that the hydrogen tax credits are structured to favor lower-carbon production methods.

"When we talk about hydrogen, it's not about a specific technology, it's about a whole process," Wilson said. "I think most people see green hydrogen as the winner.

Green hydrogen is made using clean renewable electricity to electrolyze water (H2O), separating the hydrogen atom from its molecular twin, oxygen. Currently expensive.

Blue hydrogenProduced using natural gas, with carbon emissions captured and stored or reused Lack of carbon capture projects means quantities produced are negligible

Gray hydrogen This is the most common form of hydrogen production It is obtained from natural gas by steam methane reforming, but without capturing the emissionsPink

Brown Hydrogen The cheapest way to produce hydrogen, but also the most polluting as it uses heat charcoal to produce it

/Purple Hydrogen Produced using nuclear energy for electrolysis

Turquoise Hydrogen Uses a conc a process called methane pyrolysis to produce hydrogen and fixed carbon. Not tested on a large scale. Concerns about methane leakage.