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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Biden's Hydrogen Hubs Plan Slammed As Handouts To Big Oil

  • President Biden's plan to extend $7 billion in grants to seven hydrogen hubs across America has come under fire from environmental organizations.
  • Numerous climate justice organizations have slammed the ambitious hydrogen plan of the U.S. Administration, saying it is extending the life of the fossil fuel industry.
  • The HyVelocity Gulf Coast Hydrogen Hub, which will receive up to $1.2 billion in Bipartisan Infrastructure Law funding, includes seven core industry partners, including Chevron and ExxonMobil.

President Biden's plan to extend $7 billion in grants to seven hydrogen hubs across America has come under fire from environmental organizations for supporting hydrogen production from natural gas.

Numerous climate justice organizations have slammed the ambitious hydrogen plan of the U.S. Administration, saying it is extending the life of the fossil fuel industry while greenwashing its emission-reduction efforts.

Some hydrogen hubs will rely on natural gas plus carbon capture and storage to produce hydrogen—the so-called blue hydrogen. The grants will also benefit large oil and gas producers that are partners in the hydrogen hubs in the Appalachia region and in the Gulf Coast in Texas.

ExxonMobil, Chevron, and EQT Corporation will be among the beneficiaries, and the climate justice warriors are having none of it.

The goal of the Biden Administration looks admirable – grant $7 billion to seven projects that are expected to catalyze more than $40 billion in private investment, thus creating a nearly $50 billion hydrogen industry that would decarbonize sectors that cannot be electrified, such as steelmaking.

The U.S. Administration announced last week it had selected seven regional hubs for hydrogen production that would receive a total of $7 billion in grants to produce hydrogen as part of President Biden's goal to boost the clean hydrogen economy and decarbonize industries.

"The seven selected regional clean hydrogen hubs will catalyze more than $40 billion in private investment and create tens of thousands of good-paying jobs – bringing the total public and private investment in hydrogen hubs to nearly $50 billion," the White House said.

The Administration also noted that roughly two-thirds of total project investments are associated with green—electrolysis-based—production within the hubs. Related: Iran Calls For Oil Embargo On Israel As Middle East Tensions Flare Up

But the hubs in the Appalachia region, the Gulf Coast Hydrogen Hub in Texas, and the Midwest hub will produce hydrogen from natural gas plus carbon capture and storage, among other sources.

The HyVelocity Gulf Coast Hydrogen Hub, which will receive up to $1.2 billion in Bipartisan Infrastructure Law funding, includes seven core industry partners, including Chevron and ExxonMobil.

Mark Klewpatinond, Hydrogen Global Business Manager, ExxonMobil, commented, "We look forward to helping HyVelocity Hub further advance hydrogen deployment across the Gulf Coast using our extensive experience."

The ARCH2 hub in Appalachia includes as partners major gas producers, including CNX Resources and EQT Corporation.

Environmentalists criticized the grants to hubs planning blue hydrogen production as another taxpayer subsidy to Big Oil.

Environmentalists also say that technologies are not proven at scale, storage, and transportation could be dangerous to communities, and even hydrogen production via electrolysis using renewable energy will need huge volumes of one very important source—water.  

"Make no mistake, prioritizing hydrogen hubs across the United States is more about extending the life of oil & gas companies than addressing the climate crisis," Earthworks Policy Director Lauren Pagel said.

"They do nothing to address the legacy of extraction and corporate welfare across the US and instead excuse the fossil fuel industry to perpetuate harm."

Sierra Club executive director Ben Jealous warned that "the fossil fuel industry is working to continue our nation's reliance on fossil fuels by any means necessary—and hydrogen offers yet another possible inroad for Big Oil and Gas to lock in polluting and noneconomic uses of gas for decades to come."

Marion Gee, Co-Executive Director at the Climate Justice Alliance, said that "At face value– and according to the Biden playbook– the hydrogen hub grants aim to help transition the United States to clean energy."

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"In reality, they amount to another corporate scam, one that preserves and extends the life of the extractive economy and prevents the frontline communities most impacted by climate disaster from having input," Gee added.

Julie McNamara, deputy policy director of the Climate and Energy Program at the Union of Concerned Scientists, said that the hubs announcement "advances multiple projects premised on fossil fuel-based hydrogen production and risky hydrogen end uses."

"Billions of taxpayer dollars are at risk of perpetuating fossil fuel industry injustices and harms while subsidizing fossil fuel greenwashing."

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Lexington Green on October 19 2023 said:
    '...extending the life of oil & gas companies..' Oil and Gas companies will 'extend' their lives anyway. It's called the petrochemical industry, which is an expanding market. Methane, in natural gas, contains 4 atoms of hydrogen to 1 atom of carbon. Using as a source of hydrogen for some applications is not completely impractical.

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