Appalachian Blue Hydrogen Projects (ARCH2): Status, Economics, and Challenges of the H2Hubs

 

     Blue hydrogen is hydrogen formed from natural gas where the carbon is captured and either utilized or sequestered. The main blue hydrogen project in the Appalachian region is the ARCH2 hub to be developed around Morgantown, West Virginia. The full project, or group of projects, stretches out in locations and impacts into West Virginia, Pennsylvania, Ohio, and even Kentucky. As a DOE-funded project it should benefit from the nearby National Energy Technology Lab, also in Morgantown. The DOE announced that nearly $1 billion ($925 million) will be made available for the project. Due to the fairly assured low cost of Appalachian natural gas due to pipeline constraints, the region offers the lowest cost blue hydrogen in the country and possibly the world.

 

 

     The timeframe of the project is not immediate, and the construction and in-service dates are at least a few years away, probably several for the latter. The details of the project are not easy to find but ARCH2 says they will be revealed in the next few months after they sign an agreement with the DOE. The required community engagement and environmental justice commitments built into the Infrastructure Investment and Jobs Act of 2021 that will help fund the project will also likely slow down its implementation. ARCH2 also involves significant private investment. Updated tax credits for hydrogen (45V) and CCS (45Q) are in place. The map below from the EPA and Frac Tarcker shows potential industrial CO2 sources in the general area.

 

 

     Blue hydrogen is made from natural gas through steam reforming of methane. This process makes the CO2 produced in the process easier to capture at high percentage rates. The CO2 captured in H2 production is much cleaner than the CO2 captured in the combustion of fossil fuels or biomass. Once the carbon is captured it will be transported via pipelines to sequestration wells for storage in deep saline aquifers, depleted oil & gas fields, or dewatered coal bed methane wells. Thus, the oil & gas industry is involved in three ways: providing the methane, drilling and operating the sequestration wells, and building and operating the CO2 pipelines. Transport and sequestration require the most government assistance. They provide the capacity to move the CO2 and to deliver it to permanent storage. Coal mine methane will also be a part of the project, which also plans to make hydrogen aviation fuel.  

     Any concerns about these hydrogen projects affecting natural gas demand and prices are probably unwarranted. Natural gas in the region is used for electricity generation, heat, and as a precursor for chemicals. Hydrogen would fall into the latter category and is not expected to be a drain on available supplies.

     Critics of the DOE-funded blue hydrogen projects cite the same old tired arguments about fugitive methane emissions. Hydrogen also leaks and that could affect supplies and it could also affect the methane in the atmosphere. Hydrogen stored underground for later use as is planned is reactive and that could create problems as well. The DOE does require detailed tracking of emissions of each hydrogen project.

     The hub concept enables carbon capture from a variety of sources: power plants, heavy industry, and other commercial projects that will be transported via a unified regional CO2 pipeline system to the same subsurface disposal reservoirs. A model of such a hub is shown below.

 

     As mentioned, hydrogen aviation fuel is planned to be developed. Hydrogen fuel cell powered ships, boats, and trains. There is even a food waste-to-hydrogen program being developed as part of ARCH2. This will involve treating food waste in an aerobic digester to make methane for hydrogen production. Blending hydrogen into natural gas pipelines and into natural gas at power plants will also likely be a part of the project. This will be a part of DOE’s HyBlend initiative to address the challenges of blending hydrogen with natural gas.

     The ARCH2 project is planned in four phases. Right now, in mid-2024, the hub is in the pre-award phase. Phase 1 will involve preliminary planning and analysis and will involve community and stakeholder input. Phase 2 will finalize business and labor agreements, engineering designs, permitting, offtake agreements, etc. I am guessing this will take up to about 2027. Phase 3 involves construction and installation. I would guess this will take place from 2027 to 2030. Phase 4 involves ramping up and scaling up the project. I would say this will happen post-2030.

     Columbus Ohio-based Battelle will lead the ARCH2 hub as program manager. GTI Energy, Allegheny Science & Technology (AST), and TRC Companies are also involved as well as “the National Energy Technology Laboratory (NETL), consultants, academic institutions, community organizations, and non-government organizations that will provide commercial, technical, and programmatic leadership for the development and buildout of the hub.” According to Battelle, the companies directly involved in producing hydrogen and developing projects include “Air Liquide, The Chemours Company, CNX Resources Corp, Dominion Energy Ohio, Empire Diversified Energy, EQT Corporation, Fidelis New Energy, First Mode, Hog Lick Aggregates, Hope Gas Inc., Independence Hydrogen Inc., KeyState Energy, MPLX, Plug Power, and TC Energy.” It has been estimated that the project will create as many as 21,000 jobs at its peak, 18,000 in construction, and 3000 permanent jobs.

     The project is expected to support the development of several hybrid energy projects utilizing solar energy, green hydrogen production via electrolysis, greenhouses, ammonia production, and hydrogen availability for hard-to-abate heavy industry applications. It is a major public-private partnership. A major effort may be in the works to develop hydrogen fuel cell technology for aviation, trucking, and even powering businesses and residences. Natural gas producer EQT hinted at a $2 billion investment for that aspect of the project. The Fidelis New Energy project slated for Mason County, West Virginia is such a hybrid project. It is known as the Mountaineer Gigasystem project. Fidelis describes it as follows:

 

“The Mountaineer Gigasystem is a lifecycle carbon neutral clean hydrogen facility and renewable microgrid designed to produce over 640 metric tons per day (“MTPD”), per train in Mason County, West Virginia utilizing Fidelis’ patented FidelisH2® technologies combined with carbon capture utilization and sequestration (“CCUS”) for carbon neutral hyperscale data centers and greenhouses that lowers the cost and environmental impact of food production.”

 

A picture envisioning the final project in operation is shown below:

 

 

 

     One major issue that will likely come up and also likely delay the project is simply the building of CO2 pipelines. Building any pipelines in the Appalachian region has involved lots of opposition by organized environmental groups and I suspect this will be no different. These groups have succeeded in delaying other projects by half a decade and these types of delays could keep the project from meeting its deadlines and also have the potential to inflate costs as they have with other pipelines. CO2 can be dangerous if it leaks in an area where it does not dissipate. There was a major leak from a CO2 pipeline in Mississippi that is often brought up, but the major issue of that leak was not CO2 at all but the sour gas (H2S) that was the safety issue. H2S can be deadly. However, H2S will not be an issue at all in ARCH2 as the Appalachian gas is not sour.

 

 

References:

Critics question how climate-friendly an Appalachian ‘blue’ hydrogen hub will be. Kathleen M. Kowalski. Energy News Network. August 21, 2023. Critics question climate implications of Appalachian hydrogen hub | Energy News Network

Hydrogen is the Future of Appalachian Energy. ARCH2. Appalachian Regional Clean Hydrogen Hub. ARCH2 | Appalachian Regional Clean Hydrogen Hub (arch2hub.com)

Frequently Asked Questions. ARCH2. Appalachian Regional Clean Hydrogen Hub. ARCH2-FAQs-Final-5-13-24.pdf (arch2hub.com)

Appalachian Regional Clean Hydrogen (ARCH2) Selected by the Department of Energy (DOE) to Develop Multi-State Clean Hydrogen Hub. Battelle. October 13, 2024. Appalachian Regional Clean Hydrogen (ARCH2) Selected by the Department of Energy (DOE) to Develop Multi-State Clean Hydrogen Hub (battelle.org)

With Arch2 hydrogen hub planned for Western Pa., some decisions are malleable, others are already made. Anya Litvak. Pittsburgh Post Gazette. June 10, 2024. With Arch2 hydrogen hub planned for Western Pa., some decisions are malleable, others are already made | Pittsburgh Post-Gazette

Appalachia will receive $1 billion for a hydrogen hub: What does that mean and how does it impact West Virginia? Charlie Burd. West Virginia News.  January 15, 2024. Appalachia will receive $1 billion for a hydrogen hub: What does that mean and how does it impact West Virginia? | | wvnews.com

An Insider Take on the Appalachian Hydrogen and CCS Conference. Guest Author. Frac Tracker Alliance. June 23, 2022. Insider Take on Hydrogen and Carbon Capture Conference - FracTracker Alliance

EQT Confirms What it’s Planning for its ARCH2 Hydrogen Hub Project. Watt Fuel Cell. October 16, 2023. EQT Confirms What it's Planning for its ARCH2 Hydrogen Hub Project | WATT Fuel Cell

Decarbonization Network of Appalachia. 2023. Decarbonization Network of Appalachia