Future of clean energy looks promising

A headwind?

  Late-breaking news on this developing story (posted Jan 11, 2024)..

Additional regulations recently proposed by the U.S. Department of the Treasury might make it more difficult for Washington counties to serve as venues for green hydrogen production. For more information: https://www.wsgr.com/en/insights/treasury-and-irs-release-proposed-regulations-on-section-45v-hydrogen-production-tax-credit.html#:~:text=The%20proposed%20rules%20regarding%20hydrogen,the%20same%20region%20as%20the

Public comments will be received through Feb. 26 at https://www.regulations.gov (IRS and REG–117631–23).

Whatcom County could be at the heart of clean energy

Not yet. Maybe. Could be. Any specifics of a massive endeavor, announced in October, that could transform our national energy production are not yet decided. But like a distant drumbeat that’s growing closer, ears in Whatcom County are staying tuned for coming news of the composition, location, number and size of elements that will be part of the federal government’s Pacific Northwest Hydrogen Hub, also known as the PNWH2 Hub.

Most important, might any of those elements locate in Whatcom County? It looks promising, but no one can — or will — yet say.

The potential is here

This much is known: AltaGas, which owns the former Intalco aluminum smelter site in Ferndale, is one of 17 companies participating in the PNWH2 Hub, which is one of seven clean hydrogen hubs nationwide designated by the federal government for significant investment in commercial hydrogen production. Together, the seven hubs expect to get $7 billion, plus another $1 billion for demand-side support. The program, funded by the Bipartisan Infrastructure Law, should help meet energy needs without using fossil fuels that contribute to climate change. Clean hydrogen energy is created by using electrolysis to split a water molecule into hydrogen and oxygen, avoiding the production of carbon dioxide, a greenhouse gas linked to global warming. (Previous methods of making hydrogen also produced carbon dioxide.) Clean hydrogen could someday power jets, cargo ships, long-haul transport trucks and more.

AltaGas, based in Calgary, Alberta, has not committed to any production facility or site. The operations of its subsidiary ALA Renewable Energy include the Petrogas butane and propane export facility at Cherry Point.

AltaGas will say only that more information will come in time.

“We’re looking forward to working with local stakeholders and tribes to ensure the development benefits the region and positively contributes to the ongoing energy transition,” said AltaGas Executive Vice President Randy Toone, who also is president of midstream at AltaGas, “and will be sharing more with stakeholders as planning takes place.”

It could be huge

Could PNWH2 be as major as the Trans-Alaska Pipeline System in the mid-1970s? John Risser, a Bellingham-based energy industry consultant specializing in decarbonization options for heavy industry, thinks it might.

“I believe the October hydrogen hub announcement — and the overarching U.S. infrastructure investments set forth by Congress and the Biden Administration a year earlier — will be transformative,” Risser said. “The U.S., with its relative wealth of financial resources, technical know-how and human grit, is uniquely positioned to help lead the world in managing a sensible energy transition. Similar to the construction of hydroelectric dams in the ’30s and ’40s, the Interstate Highway System in the ’50s and ’60s, or even the construction of the Trans-Alaska Pipeline System in the ’70s, the creation of a Pacific Northwest hydrogen hub is a critical step in the evolution of energy production and use. And clean hydrogen is an important component of what I believe will be a multi decade process to transition away from fossil-based energy.”

The Department of Energy’s October Hub announcement included a range of clean hydrogen production approaches, including green technologies (which use solar, wind or — in the Pacific Northwest’s case — hydro power, in a process called electrolysis) and blue technologies (in which the hydrogen is produced from fossil-based sources while the carbon dioxide byproduct is collected and permanently sequestered), Risser said.

“In terms of end users, the impact will be most pronounced in long-haul trucking, rail and marine transportation, where battery requirements would make electric charging solutions impractical,” Risser said. “Other suitable applications include warehouse/port operations, fertilizer manufacturing, and for hydrotreating processes used in oil refining. But for any hub design to be successful, it needs to include aspects of consumption, transportation and consumption/offtake, what I call ‘make, move and use.’ The Pacific Northwest Hydrogen Hub includes elements of all three in its design, including some projects that might find homes here in Whatcom County.”

There is much to look forward to, Risser added.

“It’s all very exciting stuff! We’re going to be living right in the heart of one of the first and biggest H2 hubs in the world, and I believe it’s going to be equally beneficial for the environment and good for the local community,” Risser said. “I see lots of opportunities coming.”

Others seem to agree. Whatcom County Executive Satpal Sidhu has called it “a very exciting development” that the county could be part of “game-changing innovation in the energy sector.” U.S. Sen. Patty Murray has called the nationwide hydrogen hubs program one of the biggest investments in the history of the U.S. Department of Energy. “This is such an exciting time for our region,” she said during an online press conference. “We are talking about a billion – with a B – a billion-dollar award for the Pacific Northwest.”

Besides PNWH2, the other six hubs are Appalachian, California, Gulf Coast, Mid-Atlantic, Midwest and Heartland. Together with an expected $42 billion in private investment, the hubs program represents a $50 billion investment in clean hydrogen.

The PNWH2 is expected to create more than 8,000 construction jobs and 350 permanent jobs, according to a Department of Energy website.

What about bp?

That’s the future, possibly the near future. Meanwhile, what’s going on with one of Whatcom County’s current major energy producers, bp’s Cherry Point refinery? And why isn’t it part of the coalition that will develop the PNWH2 Hub? Wouldn’t bp’s ongoing carbon-neutral commitment make that a natural fit?

When Business Pulse asked, the company’s communications team responded that bp Cherry Point didn’t seek federal government funding for this green hydrogen project in the Pacific Northwest. “However, bp’s refinery in Whiting, Indiana, was named as a site for the Midwest Hydrogen Hub funding for a project they are considering,” bp’s com team emailed. “bp looks at each opportunity on a case-by-case basis.”

But bp Cherry Point is one of five bp refineries globally that the company may upgrade to make it a source of sustainable aviation fuel and green hydrogen, and it’s the only U.S. bp refinery being considered for this. Sustainable aviation fuel, also referred to in the industry as SAF, can be made from biomass-based feedstocks such as fats, greases and oils. Such feedstocks have lower carbon intensity over their life cycle than jet fuel made from conventional fossil-fuel inputs. The potential upgrades at bp Cherry Point would include a sustainable aviation fuel production facility with a new green hydrogen production unit.

“The SAF production process will use hydrogen, and by building the green hydrogen facility, it will lower greenhouse gas stationary source emissions from SAF production,” bp’s communications team said. The potential upgrades represent a $1.5 billion proposed investment by bp.

The SAF facility and its green hydrogen production unit are currently in the engineering and design phase, with the Whatcom County permitting phase yet to come. Meanwhile, bp has stressed a goal of full community support.

“These projects will be of interest to lots of people in the community for many different reasons,” the bp team said. “We’re committed to sharing more information and hearing feedback from people in the community and addressing their questions.”

What’s ahead for bp’s carbon-neutral commitment? “bp aims to be net zero across our entire operations on an absolute basis by 2050 or sooner, and we aim to cut the carbon intensity of the products we sell by 50% by 2050 or sooner,” the team emailed. “One proof point is in 2022, bp invested $4.9 billion, around 30% of its total $16.3 billion in capital expenditures, into its energy transition growth engines — including the acquisition of Archaea Energy. This compares to around 3% in 2019.” The company expects this proportion to grow to about 50% in 2030.

Between bp’s carbon-neutral stance and the federal government’s PNWH2 Hub — some of which could well land here — we in Whatcom County will be a significant force in our country’s energy future.