Everything - Appalachian Hydrogen Hub May Have It All, Including Support from a Key Senator

The U.S. Department of Energy has laid out a clear set of criteria for the six to 10 clean hydrogen hubs it will select next year to receive up to $8 billion in federal support. For example, DOE wants at least one hub to use renewable energy to make hydrogen, another to use nuclear power, and another to use fossil fuels with carbon capture and sequestration (CCS). It also wants diversity among hydrogen end-users — geographic diversity too (at least two hubs must be in areas with the greatest natural gas resources) — and the department says it will give extra weight to proposals likely to create the most opportunities for skilled training and long-term employment. Yet another factor that’s sure to boost the prospects for hydrogen hub proposals in the heart of the Marcellus/Utica Shale is the looming presence of West Virginia Senator Joe Manchin, the Energy & Natural Resources Committee chairman who helped make hydrogen hub funding — and the rest of last year’s $1-trillion-plus infrastructure bill (and this year’s Inflation Reduction Act) — a reality. In today’s RBN blog, we discuss the hydrogen hub proposals now under development in northern West Virginia, western Pennsylvania and eastern Ohio.

Over the past few weeks we’ve been reviewing the DOE’s hydrogen hub selection process — now getting under way in earnest — as well as a number of what we see as the leading proposals. We started with a look at the proposed Houston Hydrogen Hub, then followed that up with blogs on planned clean-hydrogen hubs in the Corpus Christi area and Southern California. Most recently, in Halo, we examined plans for a regional hub in Louisiana, Oklahoma and Arkansas and reviewed the details in DOE’s September 22 Funding Opportunity Announcement (FOA), which officially launched the process of receiving and reviewing hydrogen hub proposals and, ultimately, deciding which proposals should receive federal dollars. As we said then, concept papers from hub proponents are due November 7, while full applications must be submitted to the DOE by April 7, 2023. The department expects to notify the winners in the fall of 2023 and complete award negotiations with them in the winter of 2023-24. Most of the selected proposals would each receive between $500 million and $1 billion in federal support, though it is possible that a proposal could receive as little as $400 million or as much as $1.25 billion, again depending on its size and need.

Today, it’s Appalachia’s turn, and we suspect that Manchin may be asking, “What took you so long?” After all, as the title of this blog suggests, it could be argued that a hydrogen hub centered in northern West Virginia and reaching into nearby areas in Pennsylvania and Ohio would have just about everything the feds are looking for: vast reserves of natural gas (and coal), a handful of steam methane reformers (SMRs) at refineries, CCS potential, a slew of existing and potential hydrogen end-users (more on this in a moment), an impressive array of gas pipelines and other supportive infrastructure, and — of special interest to Manchin — the promise of economic development and, with it, the creation of thousands of good-paying jobs.