February 28, 2024

Manchin Questions Witnesses on the Potential of Geologic Hydrogen, Criticizes Administration’s Approach to Hydrogen Tax Credits

Washington, DC – Today, U.S. Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) held a hearing to examine the opportunities and challenges associated with developing geologic hydrogen in the United States. During the hearing, Chairman Manchin discussed federal support for growing the domestic hydrogen market in the Bipartisan Infrastructure Law and Inflation Reduction Act (IRA) and how the Administration’s implementation of these laws is hampering the development of hydrogen in the U.S. Chairman Manchin also highlighted a letter from all seven U.S. Department of Energy (DOE) hydrogen hubs that urged the Administration to change course on the proposed rules for the IRA’s 45V Hydrogen Production Tax Credit. 

“Now, hydrogen isn’t a new concept, but it wasn’t nurtured in the same way some other energy technologies have been. Congress acted to rectify that and support exponential growth for the hydrogen industry by providing tools and incentives in the Bipartisan Infrastructure Law and Inflation Reduction Act that help make all types of hydrogen cost competitive. Specifically, this Committee provided DOE with $8 billion to pursue hydrogen hub projects, $1.5 billion for hydrogen technology research and development, and $750 million for small and medium sized businesses to manufacture clean energy technologies, like hydrogen, in coal communities. We doubled down in the Inflation Reduction Act with the creation of the first-ever Clean Hydrogen Production Tax Credit to incentivize the production of clean hydrogen. Fast forward to today, and seven hydrogen hub projects have been chosen across 16 states, representing ground zero of what will be a national clean hydrogen industry,” said Chairman Manchin.

Chairman Manchin commented on the letter sent to the Administration by all seven hydrogen hubs.

“Just this week, all seven hydrogen hubs – again, representing major investments in 16 states – wrote to the Administration urging them to change course on proposed rules for the hydrogen tax credit that threaten the success of the hubs. This is the first time, I think, in my long line of public service that I’ve ever had California agree with Appalachia. So, to have us all on the same page tells you how serious this is. I am glad the hubs are making their concerns known. I will support them every step of the way pushing back on this Administration’s unlawful proposal,” said Chairman Manchin.

Chairman Manchin questioned the Honorable Dr. Evelyn N. Wang, Director of Advanced Research Projects Agency-Energy at the U.S. Department of Energy, about the completion of an updated Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model. A complete and updated GREET model would help to evaluate the emissions of hydrogen production for the 45V Hydrogen Production Tax Credit.

“Earlier this month, ARPA-E awarded a grant to the Argonne National Laboratory to develop the GREET model to include a method for calculating the emissions of geologic hydrogen. Can you provide more information on when the update to the GREET model will be complete so geologic hydrogen producers can use it to determine their tax credit value?” asked Chairman Manchin.

“We expect that to be done by the end of the year so not only can our researchers access it, but it can be open to anyone that wants to access that model to be able to make it applicable for the tax credit,” said the Honorable Dr. Evelyn Wang.

Chairman Manchin also questioned Mr. Pete Johnson, CEO and Co-Founder of Koloma, about the geologic hydrogen workforce and the ability of the current energy workforce to transition to geologic hydrogen production.

“I think a big benefit that geologic hydrogen brings is it can really tap into the existing talent base…If you look at our team of geologists, chemists, reservoir engineers, drilling engineers, land professionals; this looks and feels a lot like another resource play. We have different science going on, but we can put the workforce to work doing clean hydrogen. I would say a lot of people in the oil and gas industry who are interested in moving into energy transition, they see this, and they see this as an incredible opportunity,” said Mr. Pete Johnson. 

Chairman Manchin also asked about the ability to put current hydrogen reserves on the market.

“The hydrogen we have right now that you all have tapped into, you know we have those reserves of clean hydrogen in the ground now that can be extracted. Can they be put into the market like natural gas or oil?” asked Chairman Manchin.

“Similar to oil and gas fifty, one hundred years ago, there is not a massive distribution system for moving hydrogen back and forth. My view is the initial commercial production reservoirs of geologic hydrogen will end up being used near the point of production by ammonia plants or other facilities built close by. You might have to wait a period of time to see a large enough basin developed to start to see pipelines,” replied Mr. Pete Johnson. 

“The pipeline system we have now, can hydrogen be used in that same type of transportation?” asked Chairman Manchin.

“The jury is out on that. All of the pipeline companies are studying this,” said Mr. Johnson.

Chairman Manchin questioned Dr. Geoffrey S. Ellis, Research Geologist for the U.S. Geological Survey at the U.S. Department of the Interior, about the location of geologic hydrogen reservoirs.

“I can tell you in our initial efforts we see areas along the east coast of the United States all the way from New Jersey down to Georgia,” said Dr. Geoffrey S. Ellis.

“We have Marcellus, Utica, in our area and you have the Permian, is that where you seem to be able to identify [geologic hydrogen reserves]?” questioned Chairman Manchin. 

“This would be independent from the shales; this is related to offshore iron-rich rocks that could be a source for hydrogen and then it would be migrating towards the coastline. Another prospective area is the mid-continent rift where we have iron-rich rocks that extend all the way from northeast Kansas up to Nebraska, Iowa, Minnesota, and Ontario and then down into Michigan. This is based on our understanding of where the source rocks are most likely to be but it’s complicated,” said Dr. Geoffrey S. Ellis. 

“What’s your timetable?” asked Chairman Manchin.

“Two things on that. We are aiming to get our initial map [of prospective geologic hydrogen reservoirs] for the U.S. by the end of this year, but the second key point here is that once we have this map it’s not going to tell you where to drill your wells. This will tell you the best place to do your detailed exploration,” said Dr. Geoffrey S. Ellis.

The hearing featured witnesses from the Advanced Research Projects Agency-Energy, U.S. Geological Survey and Koloma.

To watch the hearing in full, please click here.