Pa.’s proposed hydrogen hub has flaws
Sean O’Leary
There aren’t many historic parallels to efforts by the governor’s office, the Legislature, industry and advocacy groups to persuade the U.S. Department of Energy to designate Pennsylvania and the greater Ohio Valley region a hydrogen and carbon capture hub. The effort is grounded in the hope that hydrogen will be the fuel of the future because it doesn’t emit carbon when combusted, the federal government is handing out billions of dollars for its deployment and hydrogen can be made from the region’s most abundant resource, natural gas. That’s the impetus behind Pennsylvania’s recent passage of a $2 billion economic development package the benefits of which would flow principally to the natural gas industry. And it’s the vision that gave rise to the recently released “Road Map on Hydrogen and Carbon Capture Development” from Team Pennsylvania. But the proposed hydrogen hub suffers from three flaws. First, it’s horrifically expensive. Second, it won’t deliver the economic and environmental benefits its boosters claim. And third, like another similarly hailed and heavily subsidized economic development shiny object, the Appalachian Petrochemical Cluster, it will almost certainly never come to fruition. The hydrogen hub would cost at least $1,000 per year per household in Pennsylvania and probably twice that much when all costs are accounted for. It would double the cost of producing electricity at gas-fired power plants and triple the cost at coal plants. In fact, for those who find Pennsylvania’s participation in the Regional Greenhouse Gas Initiative objectionable, the hydrogen hub would drive up the cost of gas and coal power by five times as much as RGGI. Nor would the costs be offset by increases in jobs and decreases in carbon emissions. The presumed job increases are supposed to come mostly from expanded natural gas production. But a decade of data, not to mention empty storefronts and declining populations, show that natural gas development has led to zero job growth in the counties where it’s concentrated and has, if anything, accelerated population loss. On the other hand, an energy transition that relies on renewable resources, including wind, solar, energy efficiency and legacy nuclear, would cost less, eliminate more emissions and create more jobs, particularly in small cities and rural counties where hundreds of HVAC, door and window, electrical, insulation, home solar and construction and remodeling firms would benefit from investments in energy efficiency while driving down residents’ utility bills and increasing their disposable income. Politically, this renewables-based decarbonization pathway might not seem likely. But the fossil fuel pathway promoted by Team Pennsylvania isn’t likely, either. That’s because, although fossil fuel-based decarbonization has a political tailwind, its fate will depend on markets and the willingness of investors to risk their money on uneconomic technologies like carbon capture. They probably won’t do so since almost 90% of capturable point source emissions in Pennsylvania come from coal and gas-fired power plants, which even before the added cost of carbon capture, are struggling to compete with lower-cost renewable energy. Investors faced a similarly uneconomic choice when the commonwealth was throwing money at petrochemical companies to construct a fleet of ethane crackers in the region, an offer that all but Shell declined, shattering the vision of an Appalachian petrochemical cluster. Still, renewables-based decarbonization won’t be realized if political leaders won’t pursue it. If they don’t Pennsylvania may be left permanently tethered to uneconomic and polluting fossil fuel resources amid ongoing job and population loss. That’s the ugly outcome toward which hydrogen and natural gas-focused economic development efforts are heading. The hydrogen hub is a solution that was embraced before the salient question was even asked: How can the commonwealth decarbonize most effectively, at the least expense and with the greatest positive impact on jobs and the economy? The good news is that there is still time for policymakers to ask the question and to discover that a clean energy pathway is superior in every respect to the hydrogen hub and a fossil fuel-based pathway. Sean O’Leary is senior researcher at the Ohio River Valley Institute.