The U.S. just made a monumental bet on hydrogen

Hydrogen fuel has long puttered around the edges of the clean energy revolution as an option with great potential but still needing vast investment and attention to elevate it to the realm of Meaningful Fuel. 

There is no doubt that, once extracted, hydrogen fuel burns clean — the only emission is drops of water. But to extract it without emissions costs three times as much as extracting it from natural gas. And it has been the dirty extraction process from natural gas that has left hydrogen behind the likes of solar, wind, nuclear, and even geothermal, in the race to find new, clean ways to power our world. We’ve watched some hydrogen fuel cell cars come into the market only to be abandoned by consumers because of the cost and scarcity of available hydrogen fueling stations.

Now, it seems, the U.S. is putting serious dollars into cracking the clean hydrogen code and becoming a global leader in hydrogen fuel. Earlier this month, President Joe Biden announced the Department of Energy was investing $7 billion into seven proposed hydrogen hubs across the country that will focus on not just cleaning up the development of hydrogen fuel but also making it more efficient so that it can become more competitive in a market where creating electricity from solar and wind and storing it into a lithium battery is getting cheaper and easier. 

The seven regional hydrogen hubs include the Gulf Coast with Texas and Louisiana; the Midwest with Illinois, Indiana and Michigan; the mid-Atlantic with New Jersey, Pennsylvania and Delaware; the Upper Midwest with Minnesota, North and South Dakota; the Pacific Northwest with Washington, Montana and Oregon; Appalachia with Pennsylvania, West Virginia and Ohio; and, lastly, California. 

Most of the hubs will be focused on how to make green hydrogen cheaper — developed through a process known as electrolysis, in which solar and wind power are used to separate hydrogen from oxygen in water. As I mentioned, this process is three times more expensive than extracting hydrogen from natural gas. Three of the hubs, including the Appalachia hub, will focus on extracting hydrogen from natural gas but capturing carbon emissions and burying them underground — a process known as hydrogen. 

In California, the hub will focus on producing green hydrogen to power major transportation in heavy duty trucks and operations at the ports in Los Angeles, Long Beach and Oakland. 

In my hometown of Santa Cruz, California, the local transit agency just purchased the largest single fleet order of hydrogen-fueled buses in the country. Officials said they were banking on California’s future as a hydrogen hub, which could mean that green hydrogen is more readily available once it’s developed. However, considering the research and development necessary following the federal government’s investment, that day looks far, far into the future, and such hydrogen buses will need to rely on hydrogen extracted from natural gas for the foreseeable future. 

To accompany this significant cash infusion from the federal government, the New York Times is reporting that the industry is continuing to lobby for a possible, lucrative tax credit related to low-emission hydrogen production that advocates say could be worth “hundreds of billions of dollars.” This will be something to watch in the coming years, and sounds like could more meaningfully propel or subdue the budding industry.