THP-E320: This Critical Methane Question Will Determine The Survival Of The Hydrogen Industry. What Are Your Thoughts?

Paul Rodden • Season: 2024 • Episode: 320

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Welcome to The Hydrogen Podcast!

In episode 320, CNX is looking to get into the hydrogen economy using coalbed methane as their feedstock. There’s a lot to discuss, and some very opposing viewpoints are making sure their voices are heard. So stay tuned for this part one discussion on today’s hydrogen podcast.

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Paul Rodden



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Start Here: The 6 Main Colors of Hydrogen


CNX is looking to get into the hydrogen economy using coalbed methane as their feedstock. There’s a lot to discuss, and some very opposing viewpoints are making sure their voices are heard. So stay tuned for this part one discussion on today’s hydrogen podcast. So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally, and where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast. In an article in the Pennsylvania capital star Audrey Carleton writes, Pennsylvania gas producer CNX wants in on the hydrogen revolution. Audrey writes, It was late in the afternoon last October when CNX Resources Corporation lobbyist Brian Aiello emailed Pennsylvania Gov. Josh Shapiro’s office with a request. “Your assistance in advocating for this in DC … is critical,” he wrote, before laying out the southwestern Pennsylvania-based natural gas company’s plan. The plan, Aiello explained, is to capture methane from coal mines — found at those both active and abandoned, released from underground seams during and long after the extraction process — and sell it to Pennsylvania hydrogen producers. The plan’s success, Aiello wrote, hinges on its ability to get funding through a long-awaited tax credit carved out of President Joe Biden’s landmark 2022 Inflation Reduction Act, which allocated $369 billion to accelerate the nation’s clean energy transition. Hanging in the balance is an ambitious $1.5 billion hydrogen production facility for sustainable aviation fuels at Pittsburgh’s airport, which CNX announced this month with a warning: The project would come to fruition only if it secures those tax credits. “Currently, we are capturing coal mine methane at a mine in Virginia … but have significant opportunity to also capture these emissions and utilize them across Pennsylvania,” Aiello wrote to the governor’s office in October. “We are eager to invest in PA in a big way along these lines,” he added. Emails obtained by Capital & Main show the administration was receptive to the request. A little over a week later, Hossain Akbar, Shapiro’s secretary of policy and planning, forwarded the lobbyist’s message to the governor’s federal affairs representative, Michael Block, who he referred to as “the Governor’s voice and ears in DC.” “Brian is a friend and VP at CNX,” Akbar wrote of the gas industry lobbyist. “Will let you two take it from here.” The request came in the final weeks of deliberation on a collaboration that Aiello and Shapiro’s office were planning to announce in November 2023. The partnership, in which CNX agreed to a series of voluntary measures designed to improve and assess its impact on the environment, was held up as a successful case of coalition-building amid a divided government. Yet it quickly proved controversial when environmentalists described the partnership as little more than a PR stunt on behalf of CNX, which operates hundreds of wells across the state. CNX has long had a prickly relationship with environmental groups; among other violations, it was fined $200,000 by state regulators in 2022 for fracking fluid spills. Its CEO, Nick Deiuliis, has repeatedly minimized the threat of climate change and mocked the Paris Climate Accords as a “debacle.” At the time of the request, the U.S. Treasury Department was finalizing a proposed rule, known as 45V, that would govern a tax credit intended to jumpstart the hydrogen industry. The rule — thus far debated over several hearings after drawing more than 30,000 public comments — has the potential to jumpstart a new energy sector that climate advocates hope can be truly clean. But the proposed rule leaves unanswered questions about using fossil fuel to produce hydrogen as part of the clean energy transition. While energy-agnostic, the tax credit will be doled out to hydrogen producers at tiered rates based on the emissions they generate, with the lowest-emitting producers receiving the most and their higher-emitting counterparts substantially less. “The top tier of the tax credit is extremely lucrative,” said Julie McNamara, deputy policy director with the Climate & Energy program at the Union of Concerned Scientists. “It’s not linear. The top tier is very high. And once you get below that, it drops off.” In theory, the tax credits would subsidize the production of so-called green hydrogen, which is produced with renewable energy and made via electrolysis, in which water molecules are split. But fossil fuel companies that are interested in using methane to produce so-called blue or gray hydrogen want those tax credits as well. Without them, projects such as the planned hydrogen hub at Pittsburgh International Airport would likely not make financial sense. Producers like CNX are now pushing to make sure those tax credits arrive, McNamara said. And, new documents show, so is the Shapiro administration. After the October 2023 email exchange, both CNX and the Commonwealth of Pennsylvania urged the Treasury Department to ensure that the tax credits would be available to incentivize methane-based hydrogen production. If they get what they want, advocates warn, the future of green hydrogen could be derailed, and the nation’s transition from fossil fuels slowed. The Biden administration is betting big on hydrogen as environmentalists and energy experts alike debate the role the fledgling energy source will play in a decarbonized future. The Intergovernmental Panel on Climate Change (IPCC) is adamant that reducing fossil fuel use is essential to limiting global heating, which has already caused temperatures to increase, storms to become more intense and the world’s oceans to rise. The exact pathway to slowing global warming is a point of contention, however. Many environmentalists agree that green hydrogen, made with water molecules in a production process that’s powered by renewables such as solar and wind, could offer a clean path forward for hard-to-abate sectors, such as the steel and cement industries, seen as economically essential but difficult to make climate-friendly. Climate advocates fear that offering tax credits to those who produce blue and gray hydrogen would offer a lifeline to the fossil fuel industry. The federal tax credit has been driving much of the debate about the country’s energy future. The Inflation Reduction Act funding for the 10-year tax incentive is bountiful, and producers from all corners of the energy sector are making their case for getting a slice of it. Who gets the most — and who is most likely to succeed — could determine the success of the renewable energy transition. “The gas industry sees this as a big opportunity,” McNamara said. Exactly how much of an opportunity it will turn out to be will come down to a formula designed to model the emissions of a single kilogram of hydrogen across its lifecycle — from the raw material that goes into it to the point at which that hydrogen is actually produced. The formula is derived from the widely used Greenhouse Gases, Regulated Emissions, and Energy use in Technologies model, known as GREET. A hydrogen producer looking to qualify for the credit will be assessed for their emissions intensity using the formula. As the Treasury Department has currently drafted the rule, the cleanest producers will get the most money — by a longshot. Fossil fuel companies want to make sure the methane they sell will help blue and gray hydrogen producers qualify for the highest tax credit tier through a process called “emissions avoidance accounting,” or “negative carbon accounting.” This is essentially an offset in which methane that would otherwise get released into the atmosphere — leaked from sources such as agriculture and coal mines — is given a negative emissions value when sold and burned for productive use, such as producing hydrogen. The logic is based on the argument that when methane is burned, it becomes a far less potent greenhouse gas and overall atmospheric emissions are reduced. When blended into hydrogen and plugged into the GREET model, the negative value of such methane could be enough to lower a fossil fuel hydrogen producer’s overall emissions score so much that it qualifies for the highest tier of the tax credit. That would make coal mine methane lucrative for hydrogen producers. Okay? So I’ll pull away from the article here and give part two on Thursday. Now, when I came across this article and this situation in Pennsylvania with CNX and the division within the hydrogen economy, it really does press the need for clarity in hydrogen development. Do we turn a blind eye to methane emissions in hopes that green hydrogen development ramps up faster, or do we allocate resources to handle the problems we’re currently facing? This article so far does a great job laying out that question. Where should we sit on the topic, and is there a middle ground now, I’m not an expert on coal bed methane or its purity compared to shale bed methane, but to me, it would seem like a good idea to leverage the technology we have available to cut down on those methane emissions. This article does discuss the differences between blue and gray hydrogen, but to make the best advancements possible, we need to make sure that CCUS is included in these projects in order to ensure that greenhouse gas emissions are kept as minimal as possible. Now on the next show, I’ll cover the second half of this article, which brings in more environmental arguments to the forefront of the conversation and some potential issues that have arisen between CNX and the Pennsylvania Governor. There’s a lot going on with this development, and it’s critical we sort out the details, because for the hydrogen economy to survive, we must make our way through these murky waters. All right, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at So until next time, keep your eyes up and honor one another. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at Thanks for listening. I very much appreciate it. Have a great day.