Decades of efforts to build a competitor to the carbon economy have all failed to gain purchase worldwide, but that hasn’t kept people from trying.
A U.S. Senate hearing in June gave us the first glimpse of the latest attempt of what will likely take hundreds of billions of dollars (or more) of investment trying to develop a hydrogen economy that could potentially be a lot less carbon-intensive.
Language in the “discussion draft” brought before the Senate Energy and Commerce Committee identifies the need for regional hubs where “clean hydrogen” research and development programs will occur. If successful, supporters of the fuel believe it could come into its own as an energy source and someday displace oil and coal by the middle of the Century. Yet, almost any article written on the hydrogen economy today dramatically underplays just how expensive it is to build a national hydrogen infrastructure from scratch.
Hydrogen – the element – is the most common and lightest substance in the universe and burns carbon-free. Producers can make it simply through electrolysis: sending an electric current through water to split hydrogen atoms from oxygen. The hydrogen is then stored in a hydrogen fuel cell, later mixed with oxygen produces electricity, and its only by-product is freshwater.
With a “waste product” like water, one understands why hydrogen fuel cells are so attractive to engineers, environmentalists, and investors. But hydrogen is only as clean as the energy it uses to separate the atoms. Hydrogen production today in the U.S. is powered mainly by natural gas, a carbon and methane emitting fossil fuel. There are other negatives to consider as well. Hydrogen has a very low energy density, so developers must store the fuel under enormous amounts of pressure. Nor can it travel through the existing, massive U.S. natural gas pipeline system because hydrogen embrittles most metals.
“We can’t really use the existing structures” to get to a hydrogen economy, said Rick Smead, Managing Director of Advisory Services for Texas-based RBN Energy LLC, speaking at an energy event organized by Washington D.C.-based U.S. Association of Energy Economics. “Brittle pipelines and high pressure are not a good thing together.”
The Senate hearing also looked at significant government spending for carbon sequestration. Any buildout in carbon sequestration will take many new north-to-south pipelines and compressor stations, rerouting the air emissions from coal plants and industrial factories in the U.S. Northeast and Midwest into underground natural gas reservoirs along the Gulf Coast. Once there, the carbon dioxide can be reinjected into the empty hydrocarbon reservoirs or saline aquifers and stored safely for millennia.
Existing natural gas pipelines can be modified to transport carbon dioxide, so there are stark differences between the scale of the current hydrogen economy compared to rival carbon dioxide and natural gas pipeline infrastructure. “If the world’s going to phase out oil, there is a lot of room underground” to store the emissions, said Smead.
For the sake of comparison, the U.S. natural gas system operates about 300,000 miles of transmission pipeline, handles about 100 billion cubic feet of gas a day (Bcf/d), and has a maximum capacity of about 200 Bcf/d). The carbon dioxide market, which is used mainly for enhanced oil recovery (EOR), operates approximately 2,800 miles of pipe and employs nearly 6 Bcf/d of capacity for Co2, which is much heavier than natural gas.
U.S. hydrogen infrastructure is genuinely tiny in comparison to both markets. There are only 1,600 miles of hydrogen pipeline that moves about 0.01 Bcf/d a day. In other words, the hydrogen transmission system would have to be expanded by 20,000 times to match the capacity of the U.S. natural gas system and expanded 60times to reach the capacity of the U.S. carbon dioxide transport system.
Given all the NIMBYism, environmental posturing, and eminent domain issues of the 21st Century, it seems like a stretch for policymakers to agree on dramatically expanding a brand-new energy infrastructure that could cost hundreds of billions of dollars, if not more, to build.
Investment in new infrastructure alone to accommodates the energy transition from fossil to non-fossil fuel will have to at least double, if not triple, up from $1.7 trillion in 2020 to as high as $5.8 trillion on average – each year – through 2050, according to Bloomberg New Energy. As investment banks like Goldman Sachs and Morgan Stanley pull out the red carpet and with the investment community throwing money at hydrogen, look for some serious debate in the coming months and years over what – and whether – there is value in the hydrogen economy for American businesses and consumers.
William Murray has written about energy markets and environmental policy for the past two decades for Bloomberg, RealClearPolitics, and others. More recently he was the senior speechwriter at the Environmental Protection Agency.