Steve Goreham: Green hydrogen needs vast taxpayer subsidies

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Ivanpah Solar Facility, California. More than 13 Ivanpahs would be required to power hydrogen electrolyzers for a single average-sized steel plant. Photo credit: Cliff Ho, U.S. Dept. of Energy

By STEVE GOREHAM

World leaders tout “green hydrogen” as an essential fuel in the renewable energy transition. Today, heavy industries use huge amounts of coal and natural gas to produce products needed by society. Governments propose to replace hydrocarbon fuels with hydrogen fuel, using hundreds of billions of dollars in subsidies. But vast subsidies won’t be enough to overcome the insurmountable problems with green hydrogen fuel.

Four big industries—ammonia, cement, plastics, and steel—are powered by natural gas and coal, also called hydrocarbon fuels, while emitting large amounts of carbon dioxide (CO2). The world’s ammonia industry produced almost 200 million tons of ammonia in 2020, primarily for agricultural fertilizer, using natural gas and coal as fuel and feedstock.

About 4.3 billion tons of cement, the essential material for concrete, were output that same year, while exhausting CO2 and burning hydrocarbons in furnaces. Over 300 million tons of plastic are produced each year using gas for feedstock and fuel. Annually, 1.9 billion tons of steel are produced using coal and gas.

To reduce CO2 emissions, world leaders call for heavy industry to switch from natural gas and coal to hydrogen fuel. When hydrogen burns, the only combustion product is water vapor.

Most hydrogen in nature exists in compounds, such as water (H2O) or methane (CH4). But hydrogen is not expensive. When produced from hydrocarbons, it costs only about a dollar a kilogram. About 99 percent of the world’s 70 million tons of annual hydrogen production comes from gas, using steam methane reforming, or from coal, using coal gasification. But advocates propose to produce green hydrogen from electrolysis of water, using electricity from wind, solar, and other renewable sources.

Electrolysis uses electricity to decompose water into hydrogen and oxygen gas. Industrial electrolyzers use complex cell structures, catalysts, and electrolytes to maximize efficiency and reduce cost. But few electrolyzers operate today because the hydrogen they produce is very expensive. Hydrogen from electrolysis, called green hydrogen, typically costs more than $5 per kilogram, or more than five times the price when produced from natural gas. 

Electrolysis is expensive because it uses huge amounts of electricity. Production of one kilogram of hydrogen from electrolysis requiresabout 50─55 kilowatt-hours (kWh) of electricity, or almost double the daily power consumed by a US home. In 2022, the industrial price of electricity was about six cents per kWh in the United States and about 12 cents per kWh in Germany. To produce a kilogram of hydrogen, the electricity alone costs about $3 in the US and $6 in Germany, or three and six times the price of hydrogen produced by natural gas. 

Nations plan to pour vast amounts of subsidy money into hydrogen production to try to overcome the cost problem. This month President Biden announced $7 billion in subsidies for regional hydrogen hubs to try to rein in climate change. Announced hydrogen subsidies have passed $280 billion globally, with the US expected to provide $137 billion over the next ten years.

The US Inflation Reduction Act offers an astounding subsidy of $3 to produce a kilogram of green hydrogen, three times the market price. Imagine a subsidy of $150,000 to purchase a $50,000 electric car or a subsidy of $12 to produce a $4 gallon of gasoline. There appears to be no end to the cash governments will pay to try to establish a hydrogen economy.

Most hydrogen produced today from gas or coal is used on site to produce ammonia to make synthetic nitrogen fertilizer. There are no regional markets for hydrogen because hydrogen is very difficult to transport. Transportation adds additional costs to the already exorbitant price of green hydrogen.

Advocates propose that gas pipelines be used to transport hydrogen. But hydrogen is very reactive and degrades metal by a process known as hydrogen embrittlement. Embrittlement can cause cracks, leaks, and even explosions in metal pipelines. The US National Renewable Energy Laboratory recommends that pipeline blends be less than 20 percent hydrogen to minimize embrittlement.

Transporting hydrogen by ship is also costly. Liquefaction of hydrogen to -253oC requires energy equal to about 25─35 percent of the hydrogen itself, compared to the 10 percent needed to liquify natural gas. Hydrogen can be transported in the form of ammonia, which liquifies at 35oC, but must then be converted back to hydrogen, requiring energy equal to up to 30 percent of the energy content of hydrogen itself.

For hydrogen to be green, electrolyzers must use electricity from renewable or nuclear sources. But most electricity still comes from coal, oil, and natural gas, including 61% of US power in 2021, and most of the power in China (66%), India (78%), and Japan (65%). Only 37 percent of Europe’s electricity comes from hydrocarbons, but today Europe hardly has enough electricity to keep the lights on, and little to spare for electrolysis.

Converting industry to use green hydrogen fuel would require vast amounts of renewable electricity. For example, the average European steel plant produces about four million tons of crude steel per year. Hydrogen Europe, a hydrogen advocacy group, estimates that running one average plant on hydrogen would require about five GW of solar-array capacity to drive the electrolyzers. This is more than 13 times the output of California’s Ivanpah solar facility. A solar facility that could generate this much electricity would cover more than 70 square miles. To convert the world’s steel industry to run on green hydrogen, over 5,000 TWh of electricity from renewables would be needed to drive electrolyzers. This is more than the world’s total output of renewable electricity today.

Alternatively, to power electrolyzers for the steel industry, the world would need to build 600 nuclear plants, added to the 437 nuclear plants operating today. This isn’t going to happen. There won’t be enough renewables to produce green hydrogen for heavy industry.

Advocates appear to believe that a landslide of money can create a new green fuel industry. But a hydrogen fuel industry, if created, will be small and based entirely on government subsidies, not sound economics.

Steve Goreham, a policy advisor to The Heartland Institute, is a speaker, author, and researcher on environmental issues as well as an engineer and business executive. He is the author of of the new bestselling book “Green Breakdown: The Coming Renewable Energy Failure.” This column was first published by Master Resource.

32 COMMENTS

  1. Another pipe dream by the idiots who embrace the climate con.

    It’s really simple. Currently there is one viable alternative to fossil fuels. Nuclear. That’s it.

    If businesses want to buy into the latest hydro carbon fad, they can pay for it.

    But if we’re stupid enough to re elect Grandpa Bloodstains, expect it to be forced down our throats.

  2. Using hydrogen as a fuel source (whether green, blue, or another color) requires approximately three times more volume as natural gas does to get the same amount of energy due to the energy density in these fuels. In other words you need to make, transport, store, and deliver three times the amount of hydrogen to replace natural gas in order to keep the lights on.

  3. Serious thinkers already understand the truth of what is being said in this article. The future of energy remains fossil fuels because converting their potential energy to kinetic energy is the most feasible process. As to electricity, the obvious answer, for decades now, is nuclear. Any credible economist or scientist knows solar and wind energy are fanciful, unfeasible, distractions. A good yardstick to measure feasibility is, if something requires government subsidy, then it is ill-advised.

  4. Com’On Folks … We’ve been snowed over by these before!
    It’s nothing short of another DonnyBrook scam and sham.
    Enriching and Benefiting “only” a few, sticking us with the bill.

  5. The answer is methane converting underwear.
    Simply put charged ions react to methane produced by flatulent converting to electrical charge stored to a battery later plugged into a storage facility to be used 5o run household appliances and EVs

    • Bovine electro-diapers. Keep aoc smiling. I wanna be in on the IPO. Wouldn’t need artificial fertilizer either… Come to think of it, look at how many jobs that would create for our new worker class!

    • You mean the Governor who just sued the Department of Interior over AIDEA’s cancelled oil and gas leases? You might be the only person in the state to accuse the Governor of being “green”.

      • He supports ESG and carbon capture/carbon capture credits; smae things that the globalists support. Not saying anymore.

  6. All “green energy” is subsidized by the Fed. That’s the only way to get it to barely work.
    It’s also not about energy. It’s about moving our money into their pockets.

    • Oil and gas is subsidized, from the State’s gift of tax breaks to the feds supporting military interventions around the globe for oil and gas operators.

      • Jaded, exactly! So let’s develop our energy here in Alaska and become an exporter of energy and not worry about the towel heads in Iran. Many sources, oil, gas, coal…
        As for electricity, nothing beats Hydro, S.E. Alaska has lots of potential.

      • Nice shuck and jive to the left, Jaded. There is nothing wrong in Bosk’s comment. The “Blood for Oil” schtick you hint toward is a very shallow puddle devoid of any reason. Where are we, as a nation, pulling oil from the ground in conquered vassal states? No, buying oil from the market is FAR more reasonable. That’s why it happens that way.

        Don’t be duped.

  7. Almost forgot.
    When an industry requires government subsidies to exist, not just to get off the ground but to exist, it is not a viable technology, and likely can never run for profit. Wind and solar are perfect examples of this. There would be almost zero wind farms in the US if the Federal (and some state) governments were not paying most of the cost to establish them. Fire Island wind would not exist if it were not for tens of millions in grants from the feds.
    .
    Perhaps if the subsidies disappeared, we would find out that climate change is not as scary as they make it out to be. (And, before I get the comments, I think subsidies for conventional energy should disappear as well.)

    • If all subsidies disappeared, gasoline prices would more than double and the oil and gas sector would crumble for years until they were able to reconsolidate, but consumers would be paying far more than they do now for energy.

      • No, it would not.
        Can you provide a source for your info? Got an actual economic analysis? I know that Suzanne does not allow links, but how about title, author and publication date.
        .
        According to a Forbes article, “Debunking Myths About Federal Oil and Gas Subsidies” published Feb 22, 2016,07:45am EST, Author Len Tesoro, the oil and gas industry gets between $10B and $52B in Federal Subsidies.
        According to USA today, “‘Outrageous’: Big oil made almost $200 billion in 2022 as world faced energy crisis. Here’s the breakdown.” published Feb 10, 2023, the US oil and gas industry made between four to twenty times the subsidies.
        .
        Explain how an industry as a whole will basically collapse without subsidies when their net profit (as a whole) is up to 20 times the subsidies?
        No need to rush an answer, I will wait until you actually do some research.

  8. But Mr. Goreham you’ve left out a couple of very important details in you analysis. Namely our ability to squint really hard with one eye while hopping on our left foot. That coupled with every penny two or three generations of unborn Americans earn will surely get us to that Great Green Nirvana that you so bigotedly mock.

  9. Seriously, each time you convert one form of energy to another, you lose some to the environment – thus all these schemes to avoid fossil fuels fail – and contribute even more than fossil fuels to “climate change”.

  10. Here’s the screamer, go to the Alaska Energy Authority website and look at their “master” plan. One could be led to believe that master is used in the fascist sense of the word when you read it. It is actually an implementation plan for the green new deal called the Inflation Reduction Act and the bloated inflation causing pig trough Infrastructure and Jobs Act. That’s right. Alaska’s executive branch, legislative branch and bloated bureaucracy is the green new deal implementation cartel. As in other countries that are further down this path we will see soaring energy cost, forced cultural infrastructure and industrial changes. Alaska is being bought into a socialist hell hole by massive federal dollars and every player in our government is a member of the implementation cartel.

  11. Take those subsidies away, and oil will still be profitable.
    Take away the subsidies to green energy, and the entire sector will collapse.

  12. Tim in wasilla: What a remarkably garbage comment. Do the math. Use both hands and feet to get to 20 while you count. Here’s the actual numbers from a I posted comment two weeks ago including link. Cheers –
    ======================

    Speaking of timing. One of the data dinks at WUWT posted a piece analyzing total taxpayer subsidies for various forms of electricity. Nice graph. All numbers are dollars per one MWh of generated electricity. Takeaway:

    – Subsidy for Hydro – $0/40/MWh
    – Subsidy for Fossil fuels – $1.03/MWh
    – Subsidy for nukes – $1.21/MWh
    – Subsidy for Wind / Biomass / Geothermal – $16.79 – 17.93/MWh
    – Subsidy for Solar – $68.67/MWh

    As usual, the free stuff is the very most expensive. Cheers –

    ‘https://wattsupwiththat.com/2023/10/03/expensive-cheap-energy/
    ======================

  13. Oil and gas subsidize government, of all levels. Oil is taxed before it can be explored, it is taxed when it is pumped, it is taxed when it is transported, it is taxed when it is stored, it is taxed when it is processed, it is taxed when it is sold, it is taxed when it is used, it is the single most taxed product on the face of the earth.

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