Paul Rodden • Season: 2024 • Episode: 337
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In episode 337, Is blending hydrogen into natural gas distribution systems, the best use for the hydrogen that’s currently being produced. I’ll go over the article from floodlight and give my thoughts on today’s hydrogen podcast.
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Transcript:
Is blending hydrogen into natural gas distribution systems, the best use for the hydrogen that’s currently being produced. I’ll go over the article from floodlight and give my thoughts 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 for Floodlight, Emma Merchant writes, utilities are trying hydrogen blended fuels, but there are a lot of unknowns. Emma writes, Under the Inflation Reduction Act, the U.S. government is paying for pilot projects to test blending hydrogen with natural gas, composed mostly of methane, to reduce harmful emissions fueling climate change. Snaking under city streets, behind residential drywall and into furnaces, ovens and other appliances, natural gas pipelines are a ubiquitous presence in U.S. buildings. The question of what to do with them as the planet warms has become a serious debate — dozens of U.S. cities and states have crafted plans to reduce reliance on natural gas, and more than 20 other states have passed laws to preempt that type of regulation. Now, utilities around the nation have begun testing a controversial idea aimed at reducing the carbon footprint of gas lines, while keeping them in place.
Nearly 20 utilities have laid out plans to inject lines with a blend of gas and hydrogen, the latter of which emits no carbon dioxide (CO2) — a major greenhouse gas — when combusted. Testing such blends, these companies say, is an essential step towards understanding the practice, which they argue will help reduce emissions and fight climate change. Deploying more hydrogen is also a federal priority — the Inflation Reduction Act created a tax credit for hydrogen production, and the Bipartisan Infrastructure Law set aside $9.5 billion to support hydrogen development. But a federal hydrogen strategy released last year suggests blending hydrogen into gas infrastructure should focus on industrial applications. Many environmental and customer advocates agree; they argue that the use of hydrogen blends in buildings — rather than to power industries that are hard to electrify — makes little sense.
In a quote from Nat Skinner, program manager of the safety branch of the California Public Advocates Office, which is an independent state office that advocates for consumers and utility regulations, says Every dollar you’re reinvesting into the gas system could be a dollar you’re using to electrify the system. Finding the right uses for hydrogen is appropriate. But I think being really careful and thoughtful about how we’re doing that is equally important. Nearly 30 projects focused on blending hydrogen into gas lines that serve homes and businesses have been proposed or are in operation in more than a dozen states, Floodlight found, and many more utilities have hinted at future proposals. If all are approved, the projects as proposed would cost at least $280 million — and many utilities are asking that customers pay for them.
As regulators consider the proposals, advocates are calling for them to weigh the prudence of the investment. In California — where electric rates have climbed steeply in recent years — the Sierra Club has argued that the projects are “an inappropriate use of ratepayer funds” and “wasteful experiments.”
Hydrogen blending can be undertaken in a section of pipeline isolated from the rest of the gas network or in a larger “open” system that serves homes. Utilities can inject it in large transmission lines, which ferry gas from processing and storage locations to compressor stations, or into distribution lines, the smaller pipes that bring gas to buildings. Because hydrogen releases only water vapor and heat when it’s burned, it’s considered a clean fuel. And unlike traditional wind and solar energy, it can produce enough heat to run industrial furnaces. Utilities have framed the fuel as a clear way to slash the emissions associated with their operations.
And a quote from Neil Navin, the chief clean fuels officer at Southern California Gas (SoCalGas), in March statement on its application project in blending pilot says These demonstration projects are an important step for us to adopt hydrogen blending statewide, which has the potential to be an effective way to replace fossil fuels. Burning hydrogen, particularly in homes, also presents certain risks. Hydrogen burns hotter than natural gas, which can increase emissions of nitrous oxide (NOx), a harmful air pollutant that can react with other elements in the air to produce damaging pollutants including small particulates and ozone. Hydrogen is a smaller molecule than methane, the main ingredient in natural gas, and can leak more readily out of pipelines. Hydrogen is also flammable. And when certain metals absorb hydrogen atoms, they can become brittle over time, creating risks of pipeline cracks, depending on the materials the pipelines are made of.
There are also outstanding questions about how much hydrogen blending actually reduces greenhouse gas emissions. Of the utilities that have offered details about the hydrogen source they plan to use for their pilot, roughly half plan to use “green hydrogen,” which is produced using clean electricity generated by renewable sources such as wind and solar. Today, fossil fuels power more than 90% of global hydrogen production, producing “gray hydrogen.” Most utility blending pilots are targeting blends of up to 20% hydrogen. At those levels, research has shown that hydrogen would reduce carbon dioxide emissions by less than 10%, even when using hydrogen produced with clean manufacturing processes. Some utilities have estimated the emissions impacts of their pilots. A CenterPoint Energy pilot in Minneapolis using blends of up to 5% green hydrogen was estimated to reduce carbon emissions by 1,200 metric tons per year, which is the approximate energy use of 156 homes. A project in New Jersey testing blends of 1% green hydrogen was estimated to reduce emissions enough to offset the energy use of roughly 24 homes.
Blending gray hydrogen may show no carbon benefit at all, according to some research. That’s in part because hydrogen produces one-third less energy by volume than natural gas, meaning three times the amount of hydrogen is needed to make up for the same unit of natural gas.
And hydrogen requires more energy to manufacture than it will later produce when it’s burned. For these reasons, some environmental groups say hydrogen is an inefficient way to decarbonize homes and businesses; some analysts have called the process “a crime against thermodynamics.” And a quote from Jim Dennison, a staff attorney at the Sierra Club, There are much better, readily available, more affordable ways to decarbonize buildings in the form of electrification and energy efficiency. Advocates including Dennison also worry that investing more in the natural gas system will delay electrification and allow utilities to keep their core pipeline businesses running. “I can see why that’s attractive to those utilities,” he said. “That doesn’t mean it makes sense for customers or the climate.”
While the climate benefits are debated, some research and active projects indicate that burning blended fuel at certain levels can be safe. For decades, Hawaii Gas has used synthetic natural gas that contains 10-12% hydrogen. Countries including Chile, Australia, Portugal and Canada have also run hydrogen blending pilots. And although pipelines can weather when carrying hydrogen, that’s less likely for distribution lines that reach homes because those pipes are often plastic, said Bri-Mathias Hodge, an associate professor in energy engineering at the University of Colorado-Boulder.
Hodge helped author a 2022 review of technical and regulatory limits on hydrogen and gas blending. With blends below 5%, Hodge said customers are unlikely to face risks or notice a difference in how their appliances or furnaces function. More uncertainty exists around higher blends. “I think we’re not sure if below 20% or say, from 5 to 20% is safe,” said Ali Mosleh, an engineer at the University of California Los Angeles who is spearheading hydrogen blend pilot testing with 44 partners, including utilities, to address knowledge gaps in the state. Although Hodge at UC-Boulder thinks electrification is the more efficient choice for homes, he said the pilots can help utilities get comfortable with blending, which may eventually be applied elsewhere. “It’s not going to really move the needle in terms of decarbonization long term, but it’s a step in the right direction,” he said.
Steven Schueneman, the hydrogen development manager at utility Puget Sound Energy, which serves about 1.2 million electric and 900,000 gas customers in Washington, said incremental approaches like utility blending pilots will signal that hydrogen is a “real industry.” That could help the fuel gain a foothold in other areas, like industrial heat and aviation. But Schueneman also acknowledges there remains uncertainty around whether hydrogen is the most cost-effective way to decarbonize buildings. “It’s not clear that blending hydrogen is going to be a prudent decision at the end of the day,” he said. Puget Sound Energy has conducted two small-scale blending pilots at a test facility. In the future, the utility plans to focus its hydrogen efforts on how blends may function in power plants, rather than in buildings. The nearly 30 blending pilots Floodlight tracked include only projects focused on use in buildings, but other utilities have proposed blending hydrogen at natural gas power plants, where the blend will be burned for electricity.
Blending pilots focused on buildings have been spearheaded by some of the largest utilities in the nation as well as smaller-scale gas providers, and are being considered from coast-to-coast. Dominion Energy, which serves 4.5 million customers in 13 states, has laid out plans for three blending pilots, in Utah, South Carolina and Ohio. National Grid, which has 20 million customers, is pursuing a project in New York. And multiple large California utilities have proposed pilot programs. Some utilities, such as Dominion and Minnesota-based Xcel Energy, did not reply to several requests for clarification on hydrogen blending plans, or replied to only some queries about their plans. But plans from certain utilities have been detailed in regulatory filings with state utility commissions.
The pilots for which cost data are available range in price from roughly $33,000 for Puget Sound Energy’s small-scale testing (which ratepayers did not fund) up to an estimated $63.5 million for a decade-long pilot proposed by California utility Pacific Gas & Electric (PG&E), which would focus on blending 5% at the start ranging up to 20% hydrogen in transmission gas lines. If approved, customers would pay up to $94.2 million for PG&E’s pilot, because of the rate of return utilities are able to collect from customers. California utilities are aiming to recover more than $200 million in total from customers for their proposed pilots.
California regulators have rejected some previous blending proposals from utilities, saying companies should use “every reasonable attempt to use existing and other funds before requesting new funds.” Advocates including the Environmental Defense Fund (EDF) have argued that the projects are not in the public interest, particularly amid the state’s spiking utility bills.
Okay, so really, a great article identifying some of the pros and cons of hydrogen blending and natural gas distribution systems. Now I’ve mentioned before that I’ve had several conversations about hydrogen blending with both public and private operators, and received a polar split about whether or not hydrogen blending is a good idea. New Mexico gas has had several trials of blending in a controlled environment with no adverse effects in their situation going well over the 20% Blend Ratio.
EOG, on the other hand, refuses to look into hydrogen blending due to the potential for stagnation in their pipelines, which they believe could be a primary factor in pipeline embrittlement and EOG’s credit, when I asked New Mexico gas about line stagnation they said there was constant turbulence in their lines during their testing, so there would be little chance of embrittlement. But with that said, New Mexico gas did have some amazing initial findings, one of which was that the flame on a range top stabilized with the addition of hydrogen.
And while that’s all well and good, the question still remains as to whether or not residential hydrogen blending is a good use of the gas. Are there more appropriate applications to leverage the benefits of hydrogen and get better efficiencies, such as heavy duty transport and hard to abate industries? I believe that the time will eventually come where hydrogen use in homes will be a reality, but there is lower hanging fruit that can use the molecule more efficiently today.
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 info@thehydrogenpodcast.com. 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 www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
