Dept. of Energy and Appalachia hydrogen hub reach agreement, providing $30 million for planning

• Reid Frazier
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  Reid R. Frazier is an energy reporter for The Allegheny Front, a Pittsburgh-based public media outlet covering the environment in Pennsylvania. His work has aired on NPR and Marketplace.

The Department of Energy announced it has reached an agreement with a public-private consortium to build a hydrogen hub in West Virginia, Pennsylvania and Ohio.

The Appalachian Regional Clean Hydrogen Hub, or ARCH 2, will get up to $925 million from the Bipartisan Infrastructure Law.

The agreement frees up $30 million in funding for the planning and siting of 11 documented projectsby 12 companies. This initial planning phase is expected to take up to 36 months.

ARCH2 was one of seven recipients of some of the $7 billion in hydrogen funding created by the 2021 Bipartisan Infrastructure Law.

Hydrogen is considered a potential climate solution because when it’s burned or used by industry, it creates no carbon dioxide, the main cause of global warming. But making it out of fossil fuels instead of renewable energy creates a lot of carbon pollution.

Companies involved in the ARCH 2 plan to produce hydrogen from natural gas. They say they’ll capture and store the carbon dioxide that’s created during the process in underground wells.

Akshaya Jha, assistant professor of economics and public policy at Carnegie Mellon University, says the hub will be a test for using hydrogen to address climate change.

“The hope is that these kinds of test projects lead to more projects of their kind moving forward, hopefully at a lower cost,” Jha said. “We can kind of see what happens with these kinds of test projects, if it turns out not to be what we thought they were, we don’t have to move forward with hydrogen at a wider scale.”

The companies involved in the hub, including natural gas producers CNX and EQT, have pledged to use hydrogen for fueling buses and trucks, and for making aviation fuel and ammonia, a key component of fertilizer. Some projects also envision using hydrogen for power plants or data centers. One would use hydrogen to heat homes.

Toby Z. Rice, president & CEO of Pittsburgh-based EQT, said in a statement that the agreement would enable his company and the region “to lead the next generation of natural gas” and help clean up industries “that lack affordable, scalable solutions” to lowering their carbon footprints.

EQT is planning a facility to create liquid fuels from hydrogen for use in ground transportation or aviation. A location has yet to be determined.

Warnings from environmentalists

However, environmental groups have criticized the hub for its lack of public transparency and warned about potential environmental and health impacts.

More than four dozen groups petitioned DOE in May to make more information about the hub projects public.

Alison L. Steele, executive director of the Environmental Health Project, said the decision “shows that the federal government has not yet considered the long-term public health consequences of these projects.” The hydrogen hub’s “reliance on shale gas wells as feedstock negates any downstream benefits in emissions.”

The hub will rely on fracking, which has made Appalachia the nation’s largest natural gas producing region, but has also led to documented health problems. A University of Pittsburgh study, funded by Pennsylvania, found that living near fracking increased the risk of lymphoma, asthma and poorer birth outcomes.

Sean O’Leary, senior researcher with the Ohio River Valley Institute, said the 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.”

(Both Ohio River Valley Institute and Environmental Health Project are funded by The Heinz Endowments, which also funds The Allegheny Front.)

O’Leary’s organization has found that while fracking has grown the gross domestic product in some parts of Appalachia, the areas with the most fracking have less population, personal income and job growth than national and state averages.

O’Leary says there are legitimate uses where hydrogen would make sense to clean up particularly dirty industries – like steel, glass, or cement making.

He worries that the uses being considered for ARCH2 – like home heating and power plants – are not economical.

“While that cost can temporarily be masked by federal subsidies, eventually it will land on consumers if that project is ever fully realized,” O’Leary said.

Jha acknowledged these problems with hydrogen are real: It may be too expensive and may not reduce enough carbon emissions. But he still thinks the bet the Department of Energy is making is worthwhile.

“It may or may not be the wave of the future, but I think it’s exciting to deploy it at the scale that it’s being deployed at, [which is] relatively small,” he said. “And [we can] see whether or not it could actually be a viable energy resource.”
ARCH2 says it will host a community meeting to discuss the project on August 16.

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