Summary of NCAC-USAEE Webinar – Hydrogen: Hype or a Glide Path to Decarbonizing Natural Gas?
Covered by Sarah King, CHBC Fellow
On August 25, the National Capital Area Chapter of the United States Association for Energy Economics hosted energy and environmental expert Tom Russo, president of Russo on Energy LLC, who presented for the “Hydrogen: Hype or a Glide Path to Decarbonizing Natural Gas?” webinar. Russo aimed to address the pressing yet uncertain role of hydrogen in decarbonizing the heating, power, and transportation sectors. Answering his own research question, Russo believes hydrogen is not just “hype” to a decarbonized future; rather, by utilizing all forms of hydrogen energy (gray, blue, and green) and driving incentives for carbon capture, hydrogen may replace a portion of natural gas and blend into existing gas infrastructure.
While hydrogen has great potential to lead a clean energy economy, Russo explained the difficulties of blending hydrogen into the natural gas grid. Firstly, gray hydrogen, a form of hydrogen that is produced with carbon dioxide as a byproduct, currently dominates hydrogen production. Additionally, due to hydrogen’s reactivity with certain metals and lack of general knowledge about its stability in gas blending, issues of system integrity, end user performance, and system and industrial equipment performance have built up hesitancy for adoption in the gas industry. Finally, the United States is greatly lagging in hydrogen research and development compared to the European Union, which has committed to 6 GW of installed electrolyzers by 2024 through their Green Deal and net zero carbon mandates.
While these issues present real barriers to the industry, Russo stated his belief in hydrogen becoming a pathway for decarbonization. He emphasized the need to incentivize transitioning from gray to cleaner blue hydrogen production, which stores or captures the carbon that is released through production. By taking advantage of the IRS 45Q Tax Credit for Carbon Capture, originally passed in 2018 with updated guidance issued in June 2020, the costs and risks of capital investment of carbon capture technologies are reduced. In order to overcome the hurdle of gas blending risk, Russo called for standardization of research on hydrogen and natural gas blending, because it is difficult for utilities to compare one infrastructure system to another. The percentage of hydrogen that can be blended with natural gas will vary depending on materials and risk tolerance. Installation of reinforced thermoplastic pipes, which are designed specifically for hydrogen, may also alleviate some of the issues associated with gas blending. With increased research and policies that incentivize hydrogen production and carbon capture technologies, hydrogen will play an important role in a reliable clean energy transition.
Russo ended the webinar by emphasizing that blending natural gas with hydrogen will require collaboration from a variety of different actors, including the CPUC, FERC, IRS, PHMSA, and countless more. While there is much work to be done, decarbonizing natural gas with hydrogen is an important and promising step toward a clean energy future.