Paul Rodden • Season: 2024 • Episode: 339
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Welcome to The Hydrogen Podcast!
In episode 339, Arch2 is now the third hub to get funding. I’ll go over the press release and related news and give my thoughts on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
Arch2 is now the third hub to get funding. I’ll go over the press release and related news 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 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 a press release on July 31 Agreement reached to build Appalachian Regional clean hydrogen hub on July 31 the Appalachian Regional clean hydrogen hub, or ARCH2, has executed a cooperative agreement with the US Department of Energy Office of clean energy demonstrations, or the OCED, to receive up to $925 million and federally funded dollars to spearhead the development of a clean hydrogen hub in Appalachia. This federal funding will unlock billions of dollars in private sector investment to create 1000s of well paying jobs in Appalachia emerging hydrogen economy, in partnership with OC Ed arch two will create a clean, economically viable and socially equitable hydrogen ecosystem within Appalachia, revitalizing local communities impacted by the energy transition.
In October of 2023 the DOE selected ARCH2 as one of the seven hubs from across the nation to enter award negotiations for the does regional clean hydrogen hubs program, or the h2 hubs. The h2 hubs are a long term initiative that aim to create regional clusters of clean hydrogen producers, consumers, and connective infrastructure that will form the foundation of a National Clean hydrogen network. The program is divided into four phases that span more than a decade, ARCH2 was awarded $30 million for phase one, which is expected to last up to 36 months, starting in July of this year. The remaining portions of the allocated federal dollars will be unlocked in the future phases as the hub successfully reaches specific milestones set by the DOE. ARCH2 will bring significant economic, environmental and social benefits to the Appalachian region, including the environmental benefit by producing clean hydrogen to decarbonize, hard to abate sectors such as manufacturing and transportation.
The economic benefit by creating 1000s of new jobs and train local workers for the energy jobs of tomorrow, and the social benefit to ensure 40% of the overall program benefits flow to disadvantaged communities that are marginalized by under investment and overburdened by population. ARCH2 will share additional details of the project portfolio, community benefits commitment and plans for phase one community and labor engagements during an upcoming webinar, and for that, check out their web page. Now not everyone sees this announcement as a benefit. In a story by Anthony Hennen The Washington Examiner, ARCH2 gets $30M for hydrogen hub; critics call it a ‘boondoggle’.
The federal government cut its first check for a multi-state experiment to build a hydrogen-based manufacturing and energy hub in Appalachia, sending $30 million to ARCH2. The team behind the Appalachian Regional Clean Hydrogen Hub expects up to $925 million from the Department of Energy to spearhead development. “This federal funding will unlock billions of dollars in private sector investment to create thousands of well-paying jobs in Appalachia’s emerging hydrogen economy,” ARCH2 officials said in a press release. “ARCH2 will create a clean, economically viable, and socially equitable hydrogen ecosystem within Appalachia, revitalizing local communities impacted by the energy transition.”
The hub, with its headquarters in Morgantown, West Virginia, aims to build a regional cluster in West Virginia, Ohio, and Pennsylvania of producers, consumers, and infrastructure to lower overall emissions by using hydrogen. Using renewable energy or fossil fuels, the seven hubs scattered across the nation plan to produce hydrogen from water through an electrolysis process, then store the hydrogen until it’s used for power generation, fuel, and other industrial processes. The $30 million will fund phase one of the hub, expected to run up to 36 months. Other money will follow for future phases if ARCH2 hits DOE-set milestones. The four phases of the hub are expected to run for more than a decade. “Less than a year ago, ARCH2 was merely a proposal. Today, we are diligently transforming that idea into reality,” officials noted in a recent summer update. They anticipate a webinar within a month for more updates. Pennsylvania’s other hub, MACH2 in the eastern region, awaits its first award. In June, the Department of Environmental Protection’s Citizens Advisory Council heard a presentation from officials on the hub’s benefits and timetable.
CAC members asked for more information and details about the plan while public commenters urged them to be skeptical due to the public being “kept in the dark.” Environmentalists have warned against the hydrogen hubs, calling on Gov. Josh Shapiro in May to put a pause on their development. The viability of the hubs have also been called into question, as no large-scale success stories yet exist even as hundreds of millions of dollars are flowing to the hubs from the government. Some legislators, too, have cried foul over the legal changes made to accommodate hub-related technology like carbon capture and sequestration. Rep. Dawn Keefer, R-Dillsburg, condemned Senate Bill 831 in July, which established a legal framework for carbon capture.
“If a Pennsylvania family’s water is contaminated by CO2 being pumped into the ground, who’s responsible? Under the carbon capture legislation, one thing is very clear: it won’t be the multi-billion dollar corporation conducting the carbon capture experimental technology,” Keefer said. “If carbon capture is so safe and proven, then why is this legislation written to protect the corporations? It’s because carbon capture is not a proven science.” In a newsletter to her constituents, she warned carbon capture is not for the welfare of Pennsylvania, but for corporate subsidies that “runs roughshod over the rights of property owners.” The Ohio River Valley Institute, which has urged states to make alternative investments in clean energy rather than the hydrogen hubs, called the ARCH2 hub a “boondoggle.”
“This award represents a continued commitment to invest in a natural gas industry that has added to the pollution and health burdens in the region while failing to deliver any measurable growth in jobs, income, and population,” ORVI Senior Researcher Sean O’Leary said. “At a time when we should be pursuing proven, cost-effective, job-producing decarbonization models, this decision sends us further down the path of dependency on natural gas that will result in increased taxes and utility bills.” Okay, so the next hub in line to receive funding is the Appalachian Regional clean hydrogen hub, or ARCH2. And what makes this hub unique, from arches and PNW. Well, this hub is located in prime natural gas and coal country, with plans to utilize at least some of those hydrocarbons for hydrogen development.
What’s also unique are some of the partners. This hub has a great mix of electrolytic hydrogen and traditional oil and gas operators with Plug Power joining forces with the likes of mplx, Marathon, EQT and CNX resources. Now, why is that interesting? Well, the first two hubs to receive funding were strictly electrolytically produced hydrogen, meaning that even with the strictest of three pillar regulations, they would most likely still receive the maximum in the 45v tax credits with ARCH2. That may not be the case. Of course, the rumor is now that the three pillars will be drastically reduced in terms of how strict the regulations will be. But is this still more of a gamble to bring hydrocarbons into the production mix. Now, personally, I believe this is how the hubs should look.
Diversified production methods allow for more economic hydrogen to enter the market and create demand, while electrolyzer prices and operating costs continue to fall. But let’s also unpack what the naysayers are saying and their comments. Could CCUS really impact drinking water? Well, the answer is possibly, as representative Kiefer stated, this is new technology and new methodology, and sequestering CO2 underground could have the potential to leak into groundwater. And what that could mean is that the CO2 reacts with the minerals in the rock to form carbonic acid, and that could leach other minerals and metals from the rock and then into the water.
But that’s a, just a possibility, and B, something that needs to be monitored. Subsurface fault detection is very good right now, but not perfect, and undetected faults could still exist in areas where a sequestration site is located below groundwater. So as these projects ramp up, it will be important to monitor that well table for elevated signs of CO2 interaction. We need to progress, but we need to do so safely.
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.
