Bad News For Blue Hydrogen -- IEEFA -- December 19, 2023

Locator: 46344H2.

I have no idea what biases IEEFA may have with regard to energy, but the headline certainly caught my attention, and it certainly seems to raise some legitimate concerns.  

There are a number of posts regarding "blue hydrogen" on the blog. Link here to scroll through the "blue hydrogen" blogs.

The takeaways from the latest IEEFA analysis:

• the small and shrinking market potential for hydrogen fuel cell vehicles
• the U.S. Department of Energy is negotiating with several selected companies to establish regional hydrogen hubs that derive hydrogen from methane. They will be costly, and DOE must ask hard questions before it commits the funding
• DOE is under pressure to put the cart before the horse—to build hydrogen projects based on unproven technologies and undemonstrated markets.
• by the time DOE’s selected applications are processed and the surviving projects are built, EV market trends will have expanded the already strong role of BEVs substantially, weighing against most vehicular uses of hydrogen.
• if DOE fails to exercise discretion in reviewing and finalizing the hydrogen project proposals the result is likely to be a substantial waste of taxpayer dollars for an outsized hydrogen-based economy that will never arrive.
• the U.S. Department of Energy (DOE) is negotiating with several companies to build costly hydrogen hubs that derive hydrogen from natural gas (methane), but the agency must ask hard questions before committing any more public funds for the “blue hydrogen” projects, according to the latest Institute for Energy Economics and Financial Analysis (IEEFA) report.
• public dollars should not be sunk into projects that are likely to fail to achieve financial viability due to a weak market, IEEFA warns, and the market scenario for hydrogen in vehicular transportation is particularly troubling. 
• the scale of the hydrogen push does not make sense from an economic perspective. Despite the influx of federal funding, the long-term viability of the proposed hydrogen hubs (H2Hubs) will likely still be ruled by actual market forces.
• in a 2022 report, IEEFA found hydrogen had an extremely limited future in the market, including vehicular transportation, warning that the H2Hubs may be obsolete before they launch. With the rapid advances in battery electric technology and sustained growth in its market share, the market scenario for hydrogen in vehicular transportation is even more dubious today.
• much, much, more but you get the gist.

And, of course, making matters so much worse:

• the DOE is headed by a politician and not a scientist, or an expert on the matter
• the secretary is perhaps the least bright of any of three cabinet secretaries
• the secretary is perhaps the most ideological of all the cabinet secretaries

*****************************
From Earlier

Locator: 45761H2HUBS.

Link here. Charles Kennedy.

• Mid-Atlantic H2: blue
• Appalachian H2: deep blue
• California H2: deep blue
• Gulf Coast (Houston) H2: blue
• Heartland H2: blue
• Midwest H2: blue
• Pacific Northwest H2: deep blue