US Needs Regulatory Certainty For Hydrogen Pipelines

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Unlike in Europe, the US does not seem to have a strategy to keep the gas infrastructure relevant for the net-zero future.

 

 

Regulatory certainty will be needed if the US is to leverage its vast natural gas infrastructure for use with hydrogen in the coming decades.

The discussion on hydrogen pipelines in the US is mainly about blending, and on utilizing the existing 1,600km of hydrogen pipelines mostly in the Gulf Coast, rather than converting any existing natural gas pipelines. An exception is the proposed Angeles Link in California.

This contrasts with Europe, where gas transmission system operators have set out the European Hydrogen Backbone (EHB) plan for 53,000km of international hydrogen pipelines by 2040, to ensure they stay relevant in a net-zero world.

The US would do well to emulate some of Europe’s proposals, oil and gas consultancy Arbo suggests. “Unlike in Europe, the US does not seem to have a strategy to keep the gas infrastructure relevant for the net-zero future,” it says.

An EHB-style plan will be more difficult to organize in the US, because the transmission assets are all privately owned, Arbo says. But it is essential that the industry come up with a similar coordinated plan, as it risks “a hydrogen-based solution being completely bypassed for a much riskier and more costly model that relies completely on renewables”, the consultancy adds.

A clear decarbonization plan would help the industry rebut challenges from “all-electrification purists” such as environmental group the Sierra Club, which has opposed plans for hydrogen pipelines and new natural gas connections that would be designed to be converted to hydrogen, Arbo says. “It is in the industry’s interest to get out in front of this issue.”

The Sierra Club says it only supports green hydrogen and caveats that this “should not be used to justify a buildout of facilities that otherwise increase pollution or fossil fuel use”.

 

Planning system

A dysfunctional planning system needs to be fixed to enable hydrogen pipelines, argues pipeline operator Williams.

“The single biggest impediment to growing our clean energy infrastructure is the current regulatory regime that can be usurped and weaponized by infrastructure opponents,” says Brian Hlavinka, vice-president of new energy ventures at Williams.

Reforms are urgently needed to “increase certainty on the ability to build the needed infrastructure”, Hlavinka says. “Without that certainty, investments can be seen as too risky and will jeopardize the scalability of clean hydrogen.”

For now, it is not even entirely clear which body will be responsible for regulating interstate hydrogen pipelines. It is largely assumed to be the Federal Energy Regulatory Commission (FERC), which is already responsible for regulating natural gas pipelines and hydrogen blending in those pipelines.

But there is a risk of creating “a traffic jam before the car even gets out of the garage”, Chad Zamarin, senior vice-president of corporate strategic development at Williams, told a Congressional hearing in 2022. The current FERC process for facilitating energy infrastructure has become “incredibly difficult”, he said.

Williams has proposed the simplifying the process for approving energy infrastructure by assigning sole authority for issuing permits to one lead agency, with all other federal and state agencies able only to make recommendations. Firm deadlines must be applied to non-lead agencies to make their recommendations, and for the lead agency to make the final decision, with projects automatically approved if deadlines are not met.

Williams is also focused on blending hydrogen within existing natural gas infrastructure to help the hydrogen economy grow. But as demand for hydrogen increases, new or modified infrastructure will likely be needed to meet that demand, Hlavinka says.

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