Manchin talks US hydrogen support

More financial support is needed for the development of US hydrogen infrastructure, Senator Joe Manchin (D-WV) said today.

July 19, 2022

More financial support is needed for the development of US hydrogen infrastructure, Senator Joe Manchin (D-WV) said today.

Manchin, a crucial swing vote for Democrats and the chair of the Senate Energy and Natural Resources Committee, cited federal renewable energy tax credits for driving growth and lowering the cost of solar and wind energy, and added that the US had not yet provided appropriate incentives for hydrogen development.

“My biggest concern that I have right now is we have not invested the money that we need to address in hydrogen,” he said during a 19 July hearing. “When you look at basically how quickly we matured in one decade wind and solar. Bottom line is we put in about $100bn to do it with tax credits, and about $10bn as far as investment for new technology. We haven’t done anything in tax credits for hydrogen,” Manchin added.

Congress provided $9.5bn to establish renewable hydrogen hubs in last year’s infrastructure bill. And the Department of Energy recently extended a $504m loan guarantee to Advanced Clean Energy Storage I, LLC to develop the world’s largest industrial green hydrogen facility in central Utah – DOE’s first loan in more than ten years for a renewable energy project.

Senators at the hearing were split on the role that the Federal Energy Regulatory Commission (FERC) should play in the hydrogen economy, with Manchin expressing begrudging support and the committee’s Republicans cautious to endorse the agency.

“I certainly have had my fair share of disagreements with FERC over natural gas issues recently,” Manchin said. “Still, it’s clear to me that the commission’s natural gas siting authority helps avoid challenges that we see again and again. It certainly makes sense to regulate hydrogen infrastructure in a similar fashion to the natural gas facilities. No matter what, the Natural Gas Act and FERC will play at least some role in the growing hydrogen economy.”

Republicans on the committee have consistently criticized FERC’s handling of natural gas projects for adding regulations that would delay approvals.

“The current majority of the FERC wants to make it nearly impossible to upgrade pipelines or build new ones,” ranking Republican Senator John Barrasso (R-WY) said during the hearing. “I’m concerned that some on the commission may seek to make the ability to ship higher blends of hydrogen a reason to impose new conditions on newer upgraded natural gas pipelines.”

A proper framework

Richard Powers, Jr., chair of Venable’s energy practice, testified to the committee that, while there are several options for establishing a regulatory framework for hydrogen, he believes that the Interstate Commerce Act – rather than the Natural Gas Act – is best suited for hydrogen infrastructure regulation, and that FERC is the best agency to oversee its implementation.

“I believe that it’s more appropriate to apply FERC’s jurisdiction under the ICA,” Powers said. “Integrating our pipelines into our nation’s energy policy and infrastructure is best served by having these carriers under one FERC roof.”

“I’m not quite clear what strapping this nascent hydrogen industry to the Natural Gas Act would mean for the industry,” he said. “There are tried and true methods of regulating under the ICA, and I don’t believe that it’s burdensome.”

Chad Zamarin, senior vice president for Williams Companies, told the committee that the Natural Gas Act gives FERC jurisdiction over interstate natural gas pipelines carrying hydrogen blended into natural gas.

However, Zamarin made recommendations for reforms to increase the effectiveness of FERC as the lead agency for regulating critical infrastructure, including establishing FERC as the single lead agency; allowing input from other federal and state agencies, but stripping their power to issue permits; and establishing a firm timeline for a yes or no decision.

“FERC is our primary regulator for natural gas pipelines, and it does seem like that’s a likely venue for us to approach with respect to hydrogen,” Zamarin said. “That said, we don’t want to create a traffic jam before the car even gets out of the garage. The current FERC process has become an incredibly difficult process to facilitate the building of energy infrastructure.”

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