Distributive policy

Hydrogen is a winner as Manchin forces a diverse policy approach to energy transition

As this energy transition continues to move forward somewhat hesitantly, driven by energy and climate policy decisions, it is becoming increasingly clear that shifting a substantial percentage of current fossil fuel use to he global scale will require a much more diverse set of solutions than simply more subsidies for wind and solar. Not that these subsidies are being abandoned, of course: quite the contrary, in fact. Robert Bryce reported on Sunday at Forbes that the Manchin/Schumer cornucopia of climate spending (cynically titled the “Cut Inflation Act”) passed by a strictly partisan Senate vote would allocate an additional $113 billion to these two rent-seeking industries over the next decade.

Fortunately, the bill also recognizes that subsidies for these two industries alone will not be enough. Manchin’s own statement on the huge tax and spending package acknowledges this reality, stating that the legislation “…invests in the technologies needed for all types of fuels – from hydrogen, nuclear, renewables , fossil fuels and energy storage – to be produced and used in the cleanest way possible. It’s really all of the above, which means that this bill does not arbitrarily cut off our abundant fossil fuels It invests heavily in technologies to help us reduce our national methane and carbon emissions and also contributes to decarbonization around the world as we displace the dirtiest products.”

As momentum continues to build around scaling clean hydrogen in the United States, many stakeholders in government and industry are working collaboratively to resolve some remaining technical issues to ensure a smooth transition to a clean hydrogen economy. A priority issue revolves around the distribution of hydrogen, for which gas pipelines and natural gas will play a key role. A recent study by Columbia University’s Center for Global Energy Policy reveals that pipelines, including dedicated hydrogen pipelines and natural gas blending systems, are the most important systems for delivering hydrogen.

Recognizing this fact will be critical to the success of the Department of Energy’s regional hydrogen hub program. But some critics continue to use the current technical issues facing the hydrogen industry as a way to cast doubt on its potential role in a net-zero future. The current review focuses on hydrogen leaks from pipelines and the potential consequences of these leaks.

A recent report by the Environmental Defense Fund (EDF) entitled “Climate consequences of hydrogen emissionsexamines various hydrogen leak scenarios, ranging from what the group considers the worst-case scenario to the best-case scenario. EDF’s worst-case scenario assumes a 10% hydrogen leak rate and an additional 3% methane leak rate for hydrogen produced from steam methane reforming (SMR) and capture and storage carbon (CCS). The result of this scenario shows that renewable hydrogen would reduce the effects of global warming over 20 years by two thirds compared to fossil fuels. For hydrogen SMR and CCUS, the study indicates that the impacts of warming over 20 years could increase by 25%. Neither outcome would do much to advance the energy transition, of course.

At best, the outlook is much more optimistic. Assuming a 1% leak rate for hydrogen and methane, renewable hydrogen reduces climate impacts by 95% compared to fossil fuels, while SMR and CCS hydrogen results in a 70% reduction.

It is fair to note that the EDF study does not rely on real-world data or demonstrations to support the leak rates used. While the scenarios and modeling from the EDF study can be helpful, relying on inflated assumptions like the 10% hydrogen leak rate does not present a real understanding of how these pipelines are maintained. and exploited. Few, if any, pipeline operators could stay in business if they allowed 10% of the product to enter the atmosphere without intervention.

The actors involved in the development of hydrogen must obviously strive to reach, or even exceed EDF’s best scenario (1% leak rate). Columbia University’s Center on Global Energy Policy again offers key insight. The pipelines in the study demonstrated a low risk of leakage with a leakage rate of approximately 0.4% for hydrogen passing through a pipeline. Thus, the “best case” leak of 1% of EDF is higher than the leak rate of 0.4% of the Columbia study.

The Columbia Center study notes that “blue hydrogen production is expected to have a slightly higher leakage risk due to the added complexity of its production system, including an additional separation process,” but notes that its “…leak rate a has been estimated to be approximately 1.5% based on a combination of natural gas leak data and what is known of the correlation between hydrogen leak properties and those of natural gas”, a small fraction of the most unfavorable hypothesis of 10% of EDF.

Context and real-world demonstrations are important to ensure the hydrogen industry can mitigate risk. Fortunately for those looking to bring cleaner energy solutions to market, Congress seems willing to let industries compete, rather than continue its myopic efforts to artificially pick winners and losers in energy. Big Wind and Big Solar won’t like it, but the reality of the situation dictates a more diverse approach.

For all its obvious flaws and wasteful spending, the Manchin/Schumer bill does at least make some effort to establish an inclusive policy framework that would be essential for innovators to create the solutions that would be needed to truly address any net zero challenge. To impede the development of hydrogen before it can have an impact would be irresponsible and will not lead to the clean energy vision that is supposed to be the goal in all of this.

Cool heads seem to have prevailed in the Senate when it comes to energy diversity. But the bill now falls to the House of Representatives, which in recent years has not been known as a haven for cool heads. It remains to be seen whether the energy-diversity approach Sen. Manchin has imposed on his Senate colleagues can survive in the lower house, but the Senate’s 50/50 partisan makeup dictates that Manchin wields the strongest political hand.