New Mexico’s HB4 “Hydrogen Hub Act” presents climate threat

 

Hydrogen production, especially hydrogen derived from methane, presents many different types of pollution, safety and local health threats along the production and distribution chain, including: 

• Significant, climate-damaging methane emissions from extraction and transportation; 
• CO2 pollution from the process to produce hydrogen and from the gas burned to power that process; 
• NOx pollution from combusting hydrogen (up to 6x burning methane); 
• Pipelines that are not suited to carry hydrogen (potentially causing leaks and safety risks); 
• End-use explosion and health risks in homes and buildings.

HB4 does not regulate, resolve or reduce any of those dangers. Instead it offers taxpayer money to subsidize fossil fuels and projects that could become stranded assets within a decade.

• The upper level of “carbon-dioxide equivalent” that qualifies for a tax break in HB4, 4 kg per kg of hydrogen produced, is twice the federal standard of 2 kg/kg.
• Both standards are too high. Studies show that the types of projects that would qualify for credits in HB4 cause more climate pollution than burning coal or gas for heat, in part because they require larger quantities of methane. Methane is 80 times more powerful than CO2 at heating the climate.
• When the methane comes from utilities, the HB4 standards don’t even require measuring methane pollution during extraction, rendering them meaningless.
• The standards appear to be cherry-picked to accommodate already-existing projects;
• HB4 provides tax subsidies for fossil fuels with the promise of an uncertain number of jobs. The study HB4 provides for will be completed after the money is handed out.
• Such subsidies hand a lifeline to the gas industry and promote fracking in overburdened communities like Greater Chaco. Only 6 months after the IPCC report issued a code red for humanity, it is madness to increase subsidies for fossil fuels. Our children will not forgive us.
• Multiple sections of HB4 presume a robust agency capacity for enforcement and oversight, and new analysis of methane and hydrogen impacts. But there is only a $200,000 appropriation to accomplish it. As even Secretary Kenney said, “I have more violations than I have staff to work on them. That’s a huge struggle and point of frustration.” 
• The carbon capture and sequestration that HB4 and developers are relying on is neither proven nor commercially available; 
• New Mexico methane safeguards are welcome and needed, but do NOT come close to resolving the climate issues. Studies found that a 1.4% rate of methane emissions made hydrogen a worse climate polluter than fossil fuels, and New Mexico’s rules promise only 98% capture of venting and flaring, without even including leaks, which are considerable and difficult to accurately measure, especially in the Permian Basin. 
• The bill requires the Environment Department to certify carbon intensity and gas feedstock as “responsibly sourced gas” for Hub money eligibility, with no standards or expertise/capacity for either certification and no ability of NMED to independently evaluate those certifications. As of now, the information used to determine if projects meet HB4 standards would be coming from engineering estimates paid for by industry promoters.
• New Mexico cannot afford to divert precious tax dollars to dubious and controversial hydrogen instead of funding the needed expansion of the wind and solar resources that will really solve the climate crisis and supply sustainable New Mexico jobs. 

Some background on hydrogen

Hydrogen production already taking place is responsible for 3-4% of the world’s carbon emissions — equivalent to the carbon emissions from the UK and Indonesia combined. Pouring billions of taxpayer dollars into proposed fossil-fueled hydrogen projects would create new reliance on fracked gas that could lock in devastating climate consequences and health damages for frontline communities. 

Today, hydrogen is mostly used as part of diesel refining and ammonia production for fertilizer. 99 percent of current U.S. hydrogen production is derived from potent greenhouse gas methane, using fossil-fuel gas and producing carbon emissions. 

Because hydrogen is carbon-free (but not pollution-free) when combusted, it has also long been studied as an energy carrier. However, hydrogen is incredibly energy-intensive to produce, and the production process for gas-derived hydrogen generates significant methane, carbon, nitrogen oxide and other emissions. While renewable-powered hydrogen could be important in some applications, most of the projects proposed in New Mexico would create significant climate and health damage — not reduce it, as hydrogen boosters claim. 

Hydrogen is generally found attached to other molecules, like oxygen in water and carbon in methane (the main ingredient in natural gas). A process called steam methane reforming is used to extract hydrogen (and carbon dioxide) from methane. Electrolysis is used to extract hydrogen from water. So large amounts of either water or methane are required for large-scale hydrogen production. 

A power source is also needed to run the extraction process. More gas is usually used to power the steam reformation of methane. Renewable energy can be used to run electrolysis. Once the hydrogen is extracted, it can be combusted or run through fuel cells to create power.

Combusting hydrogen produces NOx pollution, up to six times more than simply burning fossil gas. NOx causes serious health impacts, including asthma and respiratory infections and is a precursor to particulate matter and ozone, which are also damaging to the respiratory system. Methods of lowering NOx emissions at gas power plants are currently very limited. Steam methane reforming also emits health-harming emissions including NOx, particulate matter, carbon monoxide, and volatile organic compounds.

Despite these issues, fossil-gas lobbyists have been heavily promoting gas-fueled hydrogen with carbon capture as “blue” or “clean” hydrogen to hide its dirty reality. Legislation proposes sinking taxpayer dollars into this massive new market for gas fracking, just when we most urgently need to scale back gas and oil consumption to avert climate catastrophe. 

Researchers have found that using fossil-fueled “blue” hydrogen at a power plant produces more climate emissions than directly burning natural gas for power. Even if methane leakage is reduced to 1.4% (an optimistic assumption and a much lower leakage rate than the state of New Mexico claims will result from proposed methane regulations), the study found that gas-fueled “blue” hydrogen still created more climate pollution than burning gas. This means that as a power plant uses increasing amounts of blue hydrogen mixed with gas, its lifecycle emissions will actually increase.

— Even at the more aspirational levels of carbon capture for fossil-fuel hydrogen, these projects would create new, major sources of carbon pollution. A 90% capture rate means allowing 10% of the carbon emission to escape into the atmosphere. At the scale of new hydrogen production proposed by industry, that would add significant climate damage. 

— Corporations planning to capture carbon from fossil-gas hydrogen propose to either sequester the carbon underground or pipe it to the Permian Basin to be used for enhanced oil recovery. Storing carbon in the geological formations of the San Juan Basin is untested and poses a multitude of potential hazards. Different and equally consequential risks are inherent in storing and transporting hydrogen and carbon dioxide. Carbon dioxide and hydrogen pipelines both present significant pipeline safety issues. 

— It is always more efficient to directly create power with renewable sources than to convert renewable energy to hydrogen and then use it as an energy source. This is true across sectors and end uses. Green hydrogen should be limited to cases in which renewable energy cannot be used directly or otherwise stored effectively. 

— Replacing or current dirty hydrogen production with “green” (renewable-powered) hydrogen, not adding new sources of pollution, should be the primary focus of hydrogen research and projects. 

— Many of the hydrogen applications currently touted in New Mexico would not be financially feasible without significant federal and state subsidies. Many are more expensive than renewable energy projects. 

— It is not reasonable to consider hydrogen as a substitute for gas in homes and buildings. Electrification is already available, more efficient, more cost-effective, and provides cleaner indoor air. Gas appliances can only handle hydrogen blending of 5-20% by volume, which severely limits the potential for emissions reductions. Hydrogen use beyond that level would require all new appliances for safety and emissions control. Hydrogen is also extremely flammable. If used in homes to replace gas, research found that the annual predicted number of explosions more than quadruple.

— Hydrogen should not be used for most vehicles because electric options are available, more efficient, and cheaper to purchase and operate than hydrogen vehicles.

— Blending hydrogen with methane gas at a power plant lowers the plant’s carbon emissions. However, hydrogen has a lower energy density than gas, meaning it takes a larger volume of hydrogen to provide the same energy input as an equal volume of gas. Because of this, a blend of 30% hydrogen and 70% gas by volume only results in a 13% decrease in carbon emissions at end use. 

— Any hydrogen leakage could undermine the benefits of green hydrogen and increase the lifecycle emissions of other types of hydrogen because hydrogen is an indirect greenhouse gas that is at least five times more potent than carbon dioxide over a 100-year timeframe.

• Gray hydrogen: 99% of current hydrogen production is “gray,” produced by separating methane into hydrogen and carbon dioxide via “steam methane reformation,” typically powered by fossil fuels. In addition to the carbon dioxide released in the reformation process, the fracked gas used in this process leaks significant amounts of methane, a powerful greenhouse gas over 80 times more potent than carbon dioxide.
• Blue hydrogen: This is the same as gray, except some, not all, of the waste carbon dioxide is captured and sequestered or utilized. But sequestering carbon still carries unknowns, and today most captured carbon dioxide gets used to force yet more gas or oil out of the ground, making another climate-damaging industry more profitable. And like gray hydrogen, methane leakage from wells, compressors, and pipelines contributes untenable climate pollution. 
• Green hydrogen: Is produced by separating water into hydrogen and oxygen using electrolysis powered by renewable energy and then used as a fuel or industrial feedstock. Green hydrogen can be important in helping to decarbonize sectors where renewable energy isn’t applicable, like cement and steel production. But green hydrogen also presents problems at various stages of production, and produces NOx if it is combusted for fuel. For electricity, it is much less efficient and much more expensive than simply using renewable energy.

Frontline Community concerns from NW New Mexico, where communities are already overwhelmed by oil and gas: 

• frontline communities have not been adequately consulted on hydrogen

• Have frontline impacted communities been consulted about what hydrogen is and what is planned? NM state agencies said that they would do it later. 
• Who prepared the supporting Environment Department document “Defining and Envisioning a Clean Hydrogen Hub for New Mexico”? Were any community/frontline citizens groups consulted? Is it appropriate for a gas proponent (Aztec Well Services-registered NM Energy Prosperity) to be the the main contributor and participant in a document offered as an official state document  for the Hydrogen Hub Development Act but carrying the disclaimer “This report has not been reviewed for approval by the EDD, and hence, its contents andrecommendations do not necessarily represent the views and the policies of the EDD, nor of other agencies in the Executive Branch of New Mexico state government”? 
• What processes exist to involve community and frontline groups in decisions on hydrogen incentives at NMFA, EED, and the SIC? What permits are required for hydrogen and what is the timeline (for example, what permits are required for carbon sequestration)? Will there be opportunities for frontline communities to be involved in permitting?  
• What are the opportunity costs for communities that have been led to believe that there was going to be a transition to renewables and are now being told that there will be subsidies for hydrogen?  
• Have the life-cycle costs/benefits of hydrogen been analyzed yet? When will the bill analysis by the legislative staff be available? 
• Frontline communities ask for meaningful engagement on this complex concept, which is at a very early stage.  Or communities are confused as to what hydrogen is.