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Innovation Origins
July 30, 2023
By
Team IO
Energy industry
groups push back on strict clean hydrogen rules
Sustainability - The lobbying efforts by energy companies and the
debates around clean hydrogen rules underscore the complex interplay
of political and economic interests in shaping our energy future.
Washington is once again feeling the heat from
fossil fuel interests as energy companies mount an aggressive lobbying
campaign against strict clean hydrogen rules proposed in the U.S. The
Financial Times reports on this. Massive government subsidies for
green hydrogen production have the industry on edge amid debates over
what projects will qualify. With billions in investments at stake, oil
majors have joined utilities in pushing back against stringent
certification standards. The intense corporate pressure exposes the
enduring influence of oil and gas as the U.S. attempts an energy
transition. It also reveals the difficult tradeoffs between political
compromise and rapid decarbonization needed to address the climate
crisis.
The war over “clean”
At the centre of the debate is the definition of “clean” power sources
for hydrogen production. The U.S. Treasury’s proposal, which calls for
zero-carbon energy sources to be used for every hour of hydrogen
production, has been met with stiff opposition. Industry lobbyists
argue that such a stringent rule would force plants to shut down
during periods when clean electricity is unavailable.
Instead, industry giants propose an “annual matching” system which
allows producers to purchase credits for renewable electricity, making
investment in U.S. hydrogen more attractive. This system, they argue,
would provide greater flexibility and ensure the viability of hydrogen
projects.
In this critical juncture for the green hydrogen
sector in the U.S., the lobbying efforts of big oil companies and
utility companies cannot be overlooked. Along with the American Clean
Power Association, these entities have joined forces to push for less
stringent rules, similar to those in the EU. Their influence
underscores the enduring sway of oil and gas interests, even as the
U.S. seeks to transition its energy mix.
Hydrogen: A green solution or a fossil fuel lifeline?
The hydrogen economy, once touted as the key to a clean energy future,
is increasingly seen by some as more of a political dream than a
viable path to decarbonization. Critics argue that the hydrogen
industry, particularly the production of ‘not so green’ hydrogen, is
being promoted by fossil fuel interests as a way to maintain the
status quo and delay true climate action.
Energy companies, including oil majors like BP
and Shell, have been lobbying for subsidies for hydrogen projects,
especially those classified as ‘blue’ hydrogen. These projects involve
the production of hydrogen from natural gas, with the associated
carbon emissions captured and stored or used. However, these practices
have faced criticism for their potential to act as a ‘lock-in’ for
continued fossil fuel use. Proponents of hydrogen argue that it can
serve as a clean-burning alternative to fossil fuels, particularly in
sectors that are difficult to electrify directly.
Indeed, recent studies have suggested that ‘blue’ hydrogen may have a
worse climate impact than coal due to limitations in carbon dioxide
capture during the production process and leaky natural gas
infrastructure. Despite this, oil and gas companies continue to
request decades of subsidies for blue hydrogen projects, claiming it
will be inexpensive to produce.
Hydrogen: A political reality?
There is no denying that hydrogen plays a significant role in the
political landscape of energy transition. Governments around the
world, including the Biden administration and the UK government, have
endorsed hydrogen as part of their plans to decarbonize their
economies.
However, this endorsement has been met with
skepticism from energy economists and engineers, who question the
viability and efficiency of hydrogen projects compared to other
alternatives. They argue that the push for hydrogen may have more to
do with political motives and the influence of fossil fuel lobbies
than with the merits of hydrogen as a fuel source.
While hydrogen may play a role in the decarbonisation of certain
sectors, there are concerns that the focus on hydrogen could distract
from more direct and efficient routes to decarbonization. For example,
battery electric vehicles have shown to be more energy-efficient
compared to hydrogen fuel cell vehicles, raising questions about the
emphasis on hydrogen in the transport sector.
While hydrogen’s role in decarbonization remains uncertain, the
intense lobbying efforts by fossil fuel interests continue to
constrain politicians, preventing the unfettered pursuit of climate
solutions.
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
Nathan1@greenplayammonia.com
exactrix@exactrix.com
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