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Washington vies to become a national hub for hydrogen fuel

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Washington vies to become a national hub for hydrogen fuel

Jun 05, 2023 | 4:00 am ET
By John Stang
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Washington vies to become a national hub for hydrogen fuel
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A view of a hydrogen production facility in Germany. (Photo by Andreas Rentz/Getty Images)

The Pacific Northwest is in the running to receive hundreds of millions of federal dollars to create a regional hub for the production and distribution of “clean hydrogen,” viewed by some as a key ingredient in the transition away from fossil fuels.

Washington’s Department of Commerce and Oregon’s Department of Energy have leading roles in a push to secure the money, participating in the public-private Pacific Northwest Hydrogen Association. The group is particularly keen on hydrogen production for heavy industry and in areas like the maritime and aviation sectors.

On April 6, the association submitted its full application to a new U.S. Department of Energy program that will award funding for the hubs. The coalition believes it can meet an Energy Department target of producing 50 to 100 metric tons of hydrogen daily.

The day before, Gov. Jay Inslee celebrated the application at a Chehalis Indian reservation center at Oakdale. “We think we’re perfect because we’re a high-tech hub,” Inslee said in an interview at that time.

Billions of dollars in play

The Energy Department’s hydrogen hub program totals $8 billion. It was created under the $1.2 trillion infrastructure law President Joe Biden signed in late 2021. In this round of the program, the department plans to award $6 billion to $7 billion for between six and 10 projects. 

Seventy-nine applicants submitted concept papers pitching ideas for the hubs. The feds encouraged 33 of them to move ahead with the full application process–the Pacific Northwest Hydrogen Association among them. The deadline for applicants to submit final proposals was April 7. And a U.S. Department of Energy spokesperson said last week that the department expects to complete award negotiations late this year or in early 2024.

The idea with the hubs is that they’ll eventually “form the foundation of a national clean hydrogen network that will contribute substantially to decarbonizing multiple sectors,” according to DOE materials describing the program.

While there are multiple ways to produce hydrogen fuel, advocates for cutting carbon emissions are especially interested in “green hydrogen.” This is a variety of it made using water and sources of electricity like solar, wind, or hydropower. The carbon footprint from this production process can be close to zero.

Ramping up production of green hydrogen would mark a major shift. According to a 2020 Department of Energy report, the U.S. produces upwards of 10 million metric tons of hydrogen annually. But most of it is made using a method that involves natural gas and only about 1% comes from the non-carbon-emitting “electrolysis” process that yields green hydrogen.

Washington officials see an opportunity

Inslee, a Democrat now in his third term, has made climate and environmental issues a priority during his time in office and has indicated that he sees hydrogen as a way to combat global warming. 

On Feb. 24, the governor wrote a letter to dozens of state agencies, utilities, and private corporations, saying that Washington had a good chance of becoming one of the potential hubs, citing the state’s extensive efforts combating greenhouse gasses. 

“Washington has the lowest carbon intensive grid in the United States,” Inslee wrote. “The opportunity to develop truly green hydrogen and understand how it fits into a modern decarbonized economy is possible today in the state of Washington.” 

“No other region is as advanced in this area,” he added.

Washington officials declined to say what is specifically inside the Pacific Northwest Hydrogen Association’s roughly 1,000-page application. 

In an interview at the April 5 event, Chris Green, assistant director of Washington’s Department of Commerce, said the secrecy is meant to keep the proposal competitive with others and to abide by nondisclosure agreements with companies.

Green, the association’s board chairman, said the group trimmed an original 140 Northwest-oriented projects to “a few dozen” to shrink the field to the most technologically advanced and financially feasible for the application.

He also said the Northwest coalition is not centering its plan on hydrogen cars and stations to fuel them. Instead “we want to concentrate on the industries that are harder to decarbonize,” Green said.

Other public and private entities involved in the Pacific Northwest Hydrogen Association effort include the state of Montana, a number of tribes, Tacoma Public Utilities, the Douglas County Public Utility District, the ports of Seattle and Tacoma, several labor and hydrogen industry organizations, the Sierra Club, BP America, Puget Sound Energy and an Australian company with plans to build a hydrogen plant in Lewis County.

Not all of these organizations expect to receive direct funding if the association wins a federal award. 

With the program, each hub is required to provide matching funds that are, at minimum, 50% of the total project costs. The Energy Department says that individual projects are expected to be in the $800 million to $2.5 billion range and executed over eight to 12 years.

Washington’s Department of Commerce has said it anticipates private investment materializing to meet the matching fund requirements. But the state Legislature did allocate $2 million in potential matching funds in 2022, plus another $20 million in 2023. 

Possible projects

Judging by participation in the April event, the Pacific Northwest application could feature a number of projects. Some examples of these include:

Fortescue Future Industries of East Perth, Australia, wants to build a green hydrogen production facility on the site of a closed coal mine, next to the TransAlta coal-fired power plant in Centralia in Lewis County. TransAlta has the only coal-fired power plant in Washington, scheduled to close in 2025. Fortescue declined to comment on its plans.

The ports of Tacoma and Seattle are brainstorming developing fuel production facilities, Green said.

The Douglas County Public Utility District in central Washington is building a complex along the Columbia River to produce hydrogen. The utility district said earlier this year that the plant is on track to begin operating in 2024.

In March, Los Angeles-based Universal Hydrogen flew a hydrogen-fueled De Havilland Canada Dash 8-300 regional airliner for about 15 minutes at around 3,500 feet over an airfield in Central Washington’s Moses Lake. Inslee cited that as a venture that the coalition wants to help develop.

Multiple companies are involved in a testing center for hydrogen aircraft being set up at a site in Moses Lake that will focus on testing and certifying Universal Hydrogen’s Dash-8. Universal is working on a conversion kit to retrofit commuter airplanes with hydrogen-electric powertrains.

Meanwhile, an Oregon-based company, Obsidian Renewables, submitted a separate application to the hub program. It is seeking $700 million to build large-scale green hydrogen production and distribution infrastructure in Washington and Oregon. 

The Oregon Capital Chronicle reported in December that the company decided to break away from the Pacific Northwest Hydrogen Association effort after it couldn’t get information about what projects would be included in the final application for funding.