Oklahoma officials waiting for word about billion dollar hydrogen hub plan

State has partnered with Arkansas and Louisiana to try to capture federal funding

By: - September 5, 2023 5:30 am

A hydrogen production plant at the Shell Energy and Chemicals Park Rheinland produces sustainable fuel for aircraft. Oklahoma hopes to be named a federal hydrogen hub. (Photo by Andreas Rentz/Getty Images) (This image cannot be republished unless you have a subscription to Getty.)

OKLAHOMA CITY — The state continues to bet that it can be a national leader in the growing hydrogen sector, but officials are still waiting to find out whether Oklahoma will get a coveted federal designation and access to billions in federal funding.

At stake is a federal “hydrogen hub” designation from the U.S. Department of Energy that could come with up to $1.25 billion and a host of new economic development opportunities for communities across Oklahoma, Arkansas and Louisiana.

Officials said the designation and funding would be a game changer, help jumpstart the industry and position the tri-state region as a major player in the burgeoning industry.

In March 2022, the governors of Oklahoma, Arkansas and Louisiana first announced they had formed what they named a HALO consortium in an effort to grab part of $8 billion earmarked in the U.S. Infrastructure Investment and Jobs Act for regions interested in growing the hydrogen industry.

Mark Yates, with the Advanced Power Alliance, said as soon as the energy department announced the funding, the race was on.

“At that point, that’s when Oklahoma, Louisiana and Akansas saw strategically an opportunity for them to create their own hub designation and go after this as a three-state opportunity,” Yates said.

Over a year later, the tri-state leaders continue to wait for word on whether their application was accepted.

Officials, meanwhile, say economic development projects in the region may hinge on the decision.

An Oklahoma hydrogen task force estimated that if the state could capitalize on the growing demand for low-carbon hydrogen fuel, it would have an economic impact of $1.5 billion to $2.5 billion.

The Department of Energy estimates that nearly 10 million metric tons are produced in the country annually. While hydrogen is primarily used in petroleum refining and ammonia production, it has the potential to be used in multiple industries, including transportation, as a clean energy source.

Yates said the federal application process has reportedly been very competitive. Dozens of projects reportedly applied, including others in Louisiana and Texas. But he said Oklahoma, with its wealth of natural resources, would be well-positioned to be a federal hydrogen hub.

“If you look at our assets, in terms of energy sources, we obviously have in Oklahoma, in particular of the three states, an abundance of renewable energy,” Yates said. “Our pipeline infrastructure has been discussed in terms of the amount available to move hydrogen.”

The Department of Energy did not return a message seeking comment.

Ken Wagner, the former Oklahoma secretary of energy, said they expect to hear in late September about the HALO application’s progress. If the funds are awarded, Wagner said the money would be divided among the three states.

“We believe strongly that we are still one of the most compelling applicants,” he said.

The task force, for instance, found that Oklahoma has some of the largest natural reserves of hydrogen in the country.

Across the tri-state region, Wagner said there are numerous hydrogen projects in the works, which have not been publicly announced. He could not discuss those due to non-disclosure agreements.

One company that has publicly announced that it is eying expansion into Ardmore is Australian-based Woodside Energy. The company has purchased 94 acres of land near Interstate 35 with the intention of building a hydrogen manufacturing facility.

The company’s technology uses electrolysis – electricity to separate hydrogen from wastewater. The hope is that hydrogen will be a replacement fuel for diesel powered 18-wheelers and other long-haul trucks. The fuel can also be used in forklifts and other heavy equipment, according to a Woodside news release.

Company spokesperson Christine Forster said in an email that the company is waiting on “a final investment decision in 2023,” and hopes to receive federal funding. She also said production could begin in 2026 if the company decides to move forward with the project.

Forster said Woodside hopes to benefit from HALO’s application.

But the push for hydrogen is not without its critics.

John Fleming, senior scientist at the Center for Biological Diversity, said electrolysis is considered the cleanest, but there’s a catch.

“The production of electrolytic hydrogen will still lead to significant greenhouse gas emissions if grid electricity, which still relies on fossil fuels, is used to power it,” he said.

The organization works to protect the environment and endangered species.

Fleming said electricity produced by wind and solar, renewable sources of energy, is the best option.

In a statement on its website, the Sierra Club said that hydrogen made from natural gas “produces more emissions than burning natural gas alone at a power plant.”

But some state officials, including Republican Gov. Kevin Stitt, contend that the hydrogen industry will position Oklahoma to be competitive.

“In Oklahoma, we want more of everything,” Stitt said. “By leaning into the hydrogen future, we can further diversify our energy portfolio and meet our future domestic energy demands.”

Editor Janelle Stecklein contributed to this report.

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Mindy Ragan Wood
Mindy Ragan Wood

Mindy covers the legislature for Oklahoma Voice. Her areas of focus include infrastructure, municipal government policies, and human services with an emphasis on the needs of intellectually vulnerable and physically challenged adults.