Fort Peck tribes plan ambitious hydrogen project in Montana

The Fort Peck Assiniboine and Sioux Tribes are in the early stages of a "blue" hydrogen fuel project, one they hope can be folded into a four-state partnership involving Montana.

Should the development advance, Fort Peck Reservation would play host to a hydrogen plant producing fuel for the trucking industry, as well as a carbon sequestration site and wind farm.

Economic Development Director Rodney Miller tells Lee Montana Newspapers that the tribes will later this month register a new corporation, the Assiniboine-Sioux Hydrogen Company, which will become the majority owner in a partnership with developer Cyan H2 LLC.

The tribes and Cyan have been working together since the end of last year and face an April 7 deadline to submit a funding request to the U.S. Department of Energy.

"This is focusing on renewable energy and hydrocarbons," Miller said. "It's a futuristic approach to energy development. The technology is really starting to evolve. The potential users and benefactors are developing prototypes, there are companies doing work on the automotive side."

Hydrogen development has for decades relied on federal investment, the attraction being that energy from hydrogen produces heat and water, not greenhouse gas. But fossil fuels used to make hydrogen release carbon dioxide. Currently, according to the U.S. Department of Energy, about 98% of hydrogen produced today relies on fossil fuels.

But Congress kept hydrogen research alive. Former U.S. Sen. Conrad Burns pushed hydrogen fuel cell development 20 years ago when the technology would produce one kilowatt of energy for about $3,000, nearly eight times what was economical, and Democrat Jon Tester had the bipartisan Senate Fuel Cell and Hydrogen Caucus.

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The cost of hydrogen energy has decreased, but carbon-free production needs work for commercial viability. The new focus is on hydrogen for fuel. The Inflation Reduction Act of 2022 includes a 10-year, $3 per kilogram tax credit for hydrogen, provided it's made with renewable or nuclear energy. The objective is to go carbon-free in producing fuel for transportation and industrial uses.

Wednesday, the U.S. Department of Energy made $750 million available for research and development of projects that reduce the cost of clean hydrogen. The goal is to make commercial-scale hydrogen available by the end of the decade. Wednesday's $750 million tranche is part of $1.5 billion designated for hydrogen development.

Montana's hydrogen hub partnership that Miller mentioned is a four-state effort to land a hydrogen development project. The state announced its partnership with North Dakota, Minnesota and Wisconsin last fall. DOE wants to fund one hub each in six regions. There are currently 27 proposed nationally. The Partnership is which Montana is involved proposes focusing on long-haul trucking and rail transportation.

Cyan's John Mues said he would like to meet with Montana Gov. Greg Gianforte's administration to see if the Fort Peck project can be worked into Heartland. Regardless, he said Cyan is talking with several corporations about buying in.

Mues said the Fort Peck Reservation has the right ingredients for the project, including transcontinental rail, water supply from Missouri River and reliable wind. The objective is the power the operation with a 1-gigawatt wind farm.

The plan is ambitious, not only for the hydrogen plant, wind farm and carbon sequestration sink, but also a pipeline to deliver the hydrogen to U.S. Interstate 94 for distribution. Hydrogen for freight trucks, means filling stations across the West, Mues said.

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"Typically, supply follows demand. In this case where you have a nascent industry, and technology, sometimes demand follows supply," he said.

In other words, DOE's objective is to partner with regional governments and developers to keep the cart rolling until the horse arrives.

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It's been a rough few years economically for the Hi-Line, said Cyan's Ray Johnson, who is from Sidney. Last month, his community learned that American Crystal Sugar was closing the community's sugar beet factory, resulting in a loss of about 300 jobs. The region has endured two rough years of drought. Lewis and Clark Generating Station, a local coal-fired power plant has closed along with the small mine that fueled it.

"When we think about the state of mind in Eastern Montana, I'm actually from Sidney, we've seen a lot of things happen in the last few years," Johnson said.

"This project would have a regional impact. It's good thing for us."