Gov. Josh Shapiro touts federal investment in hydrogen hubs alongside Philadelphia union leaders earlier this year
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From the Article by Elizabeth Stelle, Pittsburgh Tribune Review, November 22, 2023
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Leading Democrats, including President Joe Biden and Gov. Josh Shapiro, are gleefully celebrating hydrogen hubs as a political two-for-one deal: good-paying union jobs coupled with clean, renewable energy. However, hydrogen hubs will create neither jobs nor clean-burning energy. Instead, these overhyped projects provide publicity to Biden and Shapiro, who are both desperate to deliver on their climate promises.
This month, Biden announced that, as part of the Infrastructure Investment and Jobs Act that passed in 2021, the U.S. Department of Energy (DOE) will spend $7 billion on seven regional hubs across the country. Two of these hubs will serve Pennsylvania, which has the Keystone State’s governor twitterpated.
“Today, Pennsylvania is positioning itself as the leader of our country’s clean energy future and creating thousands of new, good-paying union jobs,” said Shapiro.
Most hubs have partnered with trade unions, such as Steamfitters Local 420 and Philadelphia Building and Construction Trades Council. Trade unions are chomping at the bit for these projects to start. “We have a well-trained, well-prepared union workforce ready to go,” said Ryan Boyer, head of the Philadelphia Building and Construction Trades Council.
However, even labor-friendly economists aren’t bullish about the ability of these hydrogen hubs to create permanent jobs. Sean O’Leary, senior researcher at the left-leaning Ohio River Valley Institute, stated he’s “wary of claims of job creation.” AND, “Both of (the proposals) are, to a large degree, based on retrofitting existing facilities and infrastructure,” said O’Leary. “The problem is retrofitting … doesn’t increase output or employment other than in temporary construction jobs.”
Though the DOE estimates that the two Pennsylvania-serving hubs will create 40,000 jobs, only 9,400 will be permanent. Compared to Pennsylvania’s oil and gas industry (which employs 424,000 people statewide), hydrogen hubs are a drop in the bucket of labor markets. In addition to exaggerated job numbers, environmentalists are skeptical of hydrogen’s ability to cut carbon emissions.
Hydrogen relies heavily on fossil fuels. According to the International Renewable Energy Agency, 96% of global hydrogen production uses natural gas, coal, and oil. Environmental groups are crying foul on the overhyped claims about clean hydrogen, suggesting that hydrogen is less of a boon and more of a boondoggle.
The Delaware Riverkeeper Network, a conservationist organization dedicated to protecting the Delaware River Watershed, strongly condemned the hydrogen hubs, claiming the DOE project “throws taxpayer money at a false solution to the climate crisis by stimulating dirty energy development that will increase greenhouse gas emissions and pollution and degrade air and water quality despite claims that hydrogen is ‘clean’ and an alternative to fossil fuels.”
Environmentalists are also displeased with the lack of public details for these hubs as lawmakers and regulators keep the plans close to their chests. A Spotlight PA piece described these hydrogen hub plans as “shrouded in secrecy.”
Even hydrogen advocates struggle to remain optimistic about these projects. “We’ve been pretty disappointed with the lack of transparency so far,” said Pete Budden, a hydrogen policy specialist and advocate at the Natural Resources Defense Council, a New York-based environmental nonprofit. “It’s made it really difficult to advocate around these projects.”
The long-term viability of these hubs is suspicious. DOE’s goal of reducing the cost of hydrogen generation to $1 per kilogram is “out of reach,” according to feasibility studies. Even with significant federal subsidies, businesses still consider hydrogen hubs a “high-risk investment.”
Besides financial viability, government regulations also threaten the hubs’ feasibility. About 95% of U.S.-produced hydrogen uses natural gas. To reach near-zero emissions, this form of hydrogen production requires carbon capture.
Yet, some Pennsylvania lawmakers are eager to discourage this form of hydrogen and further subsidize more-expensive hydrogen produced from renewable sources. If Shapiro and Biden want hydrogen hubs to succeed, they may want to persuade their lawmaking peers to adopt a lighter regulatory touch.
However, Shapiro and Biden might not have to thread the needle between good-paying union jobs and green energy; hydrogen hubs provide little or neither.
>>> Elizabeth Stelle is director of policy analysis for the Commonwealth Foundation.
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