Oct 16, 2023 - News

Houston selected for hydrogen hub, to get $1.2 billion in federal money

Illustration of hydrogen molecules surrounded by dollar elements and abstract shapes

Illustration: Gabriella Turrisi/Axios

Houston was selected as one of the seven clean hydrogen hubs and will receive up to $1.2 billion in federal funding.

Driving the news: The Department of Energy unveiled plans to provide $7 billion to spur seven regional hubs for producing climate-friendly hydrogen, and the HyVelocity Gulf Coast hub is expected to be one of the largest.

Why it matters: It's the largest U.S. effort yet to spur production using renewables, nuclear energy or carbon capture. But there's a long and uncertain road to the projects becoming reality.

  • Hydrogen could help decarbonize industries like heavy trucking, steel and power.

Zoom in: The HyVelocity hub, which will use both natural gas with carbon capture and renewables-powered electrolysis, could create 45,000 jobs, including 35,000 in construction and 10,000 permanent positions in the area.

What they're saying: "We are uniquely positioned to lead a transformational clean hydrogen hub that will deliver economic growth and good jobs, including in historically underserved communities. HyVelocity will also help scale up national and world clean hydrogen economies, resulting in significant decarbonization gains," Mayor Sylvester Turner said in a statement.

Meanwhile, the Texas Climate Jobs Project and local union leaders called for the HyVelocity hub to commit to hiring union employees once the proposal was accepted.

The big picture: Officials hope the initiative under the bipartisan infrastructure law will eventually spur more than $40 billion in private investment.

  • The hubs — involving corporate giants, public agencies and others — are designed to "kickstart" a national network of producers, consumers, and "connective infrastructure."

State of play: The DOE estimates the projects will produce 3 million metric tons of hydrogen annually.

  • Use of this hydrogen could cut CO2 each year by an amount "roughly equivalent to combined annual emissions of 5.5 million gasoline-powered cars," the DOE said.

Zoom out: The seven hubs will initiate a nationwide network that connects clean hydrogen producers, consumers, and connective infrastructure to facilitate the production, storage, delivery, and end-use of clean hydrogen.

  • The Appalachian Hydrogen Hub aims to use the region's ample gas supplies to produce hydrogen while capturing process emissions.
  • The Midwest Hydrogen Hub aims to use renewable, natural gas, and nuclear, DOE said.
  • The California Hydrogen Hub envisions production using renewable inputs, with a focus on decarbonizing heavy trucking and port operations.

Yes, but: A lot needs to break right. It's a phased process, starting with design, then permitting and lining up financing, and finally building projects, officials said.

  • And the Treasury Department is still writing heavily lobbied rules of the road for Inflation Reduction Act tax subsidies.
  • Their structure will help determine how quickly — or not — the industry scales.
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