The hype around low-carbon-intensity (LCI) hydrogen that captivated many energy transition fans over the past four years has lost some momentum of late as industry players recalibrate their investment plans in the face of spiraling costs. Still, the U.S. government is moving full speed ahead — the Bipartisan Infrastructure Law (2021) and Inflation Reduction Act (2022) promise to flow billions of dollars into LCI hydrogen infrastructure via tax credits and other incentives. Which raises this question: Will LCI hydrogen make economic sense or not? In November 2021, the Department of Energy (DOE) asked the National Petroleum Council (NPC) to take a deep dive into the topic. In today’s RBN blog, we begin a review of the issues at hand.
Our first blog series on the lightest of all gases — Help! — provided an introduction to hydrogen (H2) as a potential clean energy source as well as primers on production technologies and production economics. We followed that up with a blog that demystified the myriad of hydrogen unit conversions H2 analysts need to deal with (see I Did It). Burgeoning reader interest launched RBN’s weekly Hydrogen Billboard report, which tracks the latest developments in domestic and global hydrogen markets. We’ve also created a U.S. Gulf Coast H2 Infrastructure Map showing production, storage and pipeline links in service today. More recently we’ve covered enactment of the Bipartisan Infrastructure Law, which established federal funding for a series of regional hydrogen hubs (see The Contenders), and the Inflation Reduction Act, which included the 45V tax credit for LCI hydrogen (see Walls). And we’ve examined various efforts at permitting reform to speed infrastructure buildout (see Don’t Pass Me By and The Great Compromise).
The NPC, appointed by the Secretary of Energy and privately funded, consists of 200-plus members combining diverse experience across industry and consumers, including the oil and gas industry — and our own Rusty Braziel. In November 2021, Secretary Granholm asked the NPC to conduct a study of low- and zero-carbon hydrogen to help define potential pathways leading to LCI hydrogen deployment at scale. Over 300 individuals contributed to the ensuing analysis with seven Chapter Task Groups shepherding the writing along with outside modelling contributions from MIT. RBN contributed commentary and maps to Chapter 3 of the study, titled “LCI Hydrogen Connecting Infrastructure.”
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