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Renewable energy isn’t the only big beneficiary of Biden’s announcement in Pennsylvania.
Seven regions of the country are about to become laboratories for a whole new system of producing and using energy. If all goes according to the Biden administration’s plans, by the end of the decade, clean hydrogen, which can be produced and used without greenhouse gas emissions, will replace fossil fuels across a variety of industries that can’t easily run on renewable energy.
President Biden announced the seven regions that will be eligible for up to $7 billion to build “hydrogen hubs” while visiting Pennsylvania on Friday. The selected hubs are made up of coalitions of governments, companies, labor groups, and universities that will use a combination of private and public funding to build new infrastructure to test the production, transport, and use of hydrogen.
The hubs have not yet been awarded any funding and will now move into a negotiation phase where they will refine their community benefits plans and other aspects of their proposals before being awarded an initial grant to move forward. In the coming weeks, the Department of Energy will begin hosting virtual community briefings with the project teams and local stakeholders in their regions, which may be used to inform the negotiation process.
Friday’s announcement included the names of the seven hubs that are eligible for funding and a few paragraphs explaining the general outline of what they plan to do. The Department of Energy provided the following map which offers a rough sense of the number of projects within each hub and where they will be located. But there’s still very little information about what these projects are.
U.S. Department of Energy
Based on what we do know, here are three big takeaways from the announcement today.
At least some of the dots on that map will be production facilities. The main benefit of hydrogen is that it doesn’t release emissions when burned, but the challenge is that it isn’t readily available in the environment like coal or gas or renewable energy. It has to be produced. And it will only help tackle climate change if it can be produced without emissions.
Three of the hubs — in California, the Pacific Northwest, and the Mid-Atlantic — plan to make hydrogen using only renewable energy, nuclear power, or biomass. But at least three of the hubs — in the Gulf Coast, Appalachia, and the Midwest — plan to make it from natural gas and capture the carbon released in the process. (The Department of Energy did not specify what resources the Heartland hub plans to use.)
A lot of climate advocates and researchers are skeptical if not outright against schemes to make hydrogen from natural gas with carbon capture. One risk is that not all of the carbon will be captured. Another is that it takes additional natural gas to run the capture equipment, so the overall effect could be increased natural gas production. That could perpetuate pollution in communities living near wells and processing facilities. Depending on how much methane leaks from natural gas infrastructure, it could also cancel out any benefits from using hydrogen.
The scale of these risks will become clearer after the projects move to the awards phase, at which point they will have to “submit detailed risk assessments and risk management plans outlining potential risks and impacts, and how they will mitigate those impacts.”
Hydrogen has the potential to be used in basically any application that we use fossil fuels in today. But because it takes so much energy to make, it won’t necessarily make sense to use it everywhere. One of the main purposes of the hydrogen hubs program is to determine the cases where hydrogen will be an efficient, economical way to cut emissions.
The hubs outline a variety of ways they will use hydrogen, from steelmaking to fertilizer production to power generation. But there’s one area that at least six out of the seven hubs all see a future in: heavy duty transportation. All of the regions except the Heartland hub describe building networks of hydrogen fueling stations for long-haul trucks, buses, municipal waste, drayage, and other heavy duty vehicles.
Truck manufacturers are mixed on whether hydrogen will ultimately be the best solution to replace diesel. Equipping trucks with rechargeable batteries could turn out to be cheaper. But powering trucks with hydrogen fuel cells may be a lighter, space-saving option, and offer the ability to refuel more quickly. If the hubs program establishes a national network of hydrogen fueling stations, that could help tip the scales in favor of fuel cell trucks. The question is whether it will be built in time to beat the pace of battery innovation.
However, there are two other types of transport where many experts agree hydrogen will be useful: aviation and shipping. The Midwest and Pacific hubs also plan to produce aviation fuel, and the Gulf Coast aims to produce fuel for ships.
While hydrogen hubs certainly come with risks, they also have the potential to deliver big economic benefits to communities. The research firm Rhodium Group estimates that a commercial-scale hydrogen production facility that uses electricity is associated with an average of 330 jobs during the construction phase and 45 permanent jobs when the plant becomes operational.
The hubs are expected to create more than 200,000 jobs during the construction phase, and more than 100,000 permanent jobs. The question, as always, is whether these will be “good” jobs. But at least three of the hubs — in California, the Mid-Atlantic, and the Pacific Northwest — say they will require labor agreements for all projects connected to their hubs. If the job estimates provided by the hubs are accurate, some 86% of the permanent positions created by the hubs will be in these three regions.
By definition, these kinds of deals are hashed out between developers and local unions prior to any hiring and establish wages and benefits for the workers involved in a project. They don’t guarantee that union workers will be hired, but they do level the playing field for union contractors to compete with non-union shops — and set clear standards for whoever is ultimately hired.
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And coal communities and fracking villages and all the rest.
Amid last month’s headlines about departures from the Department of Energy, the exits of Brian Anderson and Briggs White received little attention. Yet their departures foreshadowed something larger: the quiet dismantling of federal support for the economic diversification of fossil fuel–dependent regions of the country.
Anderson and White led the Energy Communities Interagency Working Group, created by a 2021 executive order to coordinate the federal strategy to support coal–reliant regions through a global transition to cleaner energy. This Biden-era strategy recognized that communities where employment opportunities and tax bases depend on fossil fuels face serious risks — local levels of prosperity generally rise and fall with production levels — and they require support to build new engines of economic activity.
In contrast, President Donald Trump’s prescription for fossil fuel communities is to produce more fossil fuels. In addition to cutting clean energy incentives, the budget reconciliation bill passed by the House of Representatives last week seeks to directly support fossil fuel production by accelerating leasing and permitting, lowering royalty rates, and repealing the methane emissions fee.
History suggests that Trump’s ability to help fossil fuel communities by boosting production is limited — similar efforts in Trump’s first term failed to significantly alter the trajectory of coal, oil, or natural gas output. But the funding cuts codified in the current reconciliation bill could do real harm by dismantling federal programs that support economic diversification. Communities that depend on fossil fuel industries will be vulnerable to severe economic shocks when demand for their products eventually declines.
The need to help transitioning regions isn’t new, but federal support for struggling communities has long been stigmatized. In 1980, a federal commission urged policymakers to focus less on struggling places and more on helping individuals move to where opportunity existed. President Ronald Reagan used this report to justify cutting federal economic development programs, including proposing to eliminate the Appalachian Regional Commission. Congress did not fully abolish the ARC, but its budget was slashed nearly in half, leading to staff reductions and the phasing out of the programs designed to bolster the economy of the persistently struggling region.
In the decades that followed, manufacturing towns were largely left to fend for themselves as globalization accelerated. A study by MIT’s David Autor and colleagues showed that 86% of the manufacturing job losses from trade shocks in the early 2000s were still reflected in depressed local employment rates in 2019. Most workers didn’t find new jobs or migrate.
If the loss of dominant employers causes “miniature Great Depressions” in local economies across the country, then a rapid decline in fossil fuels spells acute risks for communities that depend on these industries for jobs and public revenues. We see this happening already in coal-reliant regions. In Boone County, West Virginia, coal production declined by over 80% from 2009 to 2019, causing the county’s gross domestic product to decline by over 60%. Three of Boone’s 10 elementary schools were forced to close.
President Trump entered office in 2017 pledging to “bring the coal industry back 100%” with a deregulatory strategy much like the one his administration is pursuing today. But during his first four-year term, domestic coal mining employment fell by 26%, and coal-fired power plant capacity declined by 13%, demonstrating the futility of doubling down on an economic model when macroeconomic forces are working against it.
These outcomes are not inevitable. Four-hundred miles west of Boone, the far more economically diverse Hopkins County, Kentucky was able to weather its own 75% decline in coal production without a comparable economic crash. In Germany’s Ruhr Valley, the German government paired a coal phase-out with over €100 billion in long-term investments — new universities, industrial incentives, environmental restoration, and worker retraining. While some towns in the region are still struggling, the Ruhr Valley’s shift from a coal powerhouse to a more diverse, knowledge-based economy shows that fossil fuel regions can reinvent themselves.
Recent policies in the U.S. began to take similar steps. As part of a broader federal place-based economic strategy, the American Rescue Plan dedicated hundreds of millions to rebuilding coal communities in 2021. Then came the Infrastructure Investment and Jobs Act, which included billions for cleaning up abandoned mines and orphaned oil wells and funding large-scale demonstration projects for carbon capture and hydrogen production. The Inflation Reduction Act added bonus tax credits and carve-outs to grant programs that target fossil fuel communities.
The now-defunct Energy Communities Interagency Working Group helped knit these efforts together. It served as a clearinghouse for funding opportunities, published “how-to” guides for local leaders, and deployed “rapid response teams” to coal regions.
To be sure, the strategy had limitations. Most programs focused narrowly on coal regions and clean energy solutions, and the IWG had minimal funding for its coordinating efforts. But the strategy shift marked real progress and has generated promising early signs, such as an iron air battery manufacturing facility at an old steel mill in Weirton, West Virginia, carbon capture projects in North Dakota and Texas, and “hydrogen hubs” in the Gulf Coast and Appalachia.
Under the Trump administration, that progress is at risk. Government efficiency initiatives have already led to the gutting of federal programs best positioned to support investments in fossil fuel communities, including the Loan Programs Office, the Office of Clean Energy Demonstrations. and the Federal Thriving Communities Network Initiative.
Trump’s budget proposes severe cuts to the federal support for regional economic development, including eliminating the Economic Development Administration, the federal agency dedicated to helping communities strengthen their local economies.
The reconciliation bill passed by the House of Representatives is a step toward codifying those cuts — with reductions in non-defense discretionary annual spending of $163 billion (over 20%) — and it would also eliminate most of the tax credits and grant programs that encourage investments in energy infrastructure projects in fossil fuel communities. Certain policies that are especially well suited for fossil fuel communities, like incentives for enhanced geothermal energy, may be phased out before ever really getting off the ground.
Rolling back support for fossil fuel communities will curb these regions’ opportunities to build new engines of economic prosperity. Without credible, lasting commitments from the federal government, many fossil fuel communities have little choice but to stick to the economic model they know best, despite their vulnerability to the eventual end of fossil fuels.
Revisiting a favorite episode with guest Kate Marvel.
Shift Key is off this week for Memorial Day, so we’re re-running one of our favorite episodes from the past. With Republicans in the White House and Congress now halfway to effectively repealing the Inflation Reduction Act, the United States’ signature climate law, we thought now might be a good moment to remind ourselves why emissions reductions matter in the first place.
To that end, we’re resurfacing our chat from November with Kate Marvel, an associate research scientist at Columbia University and the NASA Goddard Institute for Space Studies. At the time, Trump had just been reelected to the presidency, casting a pall over the annual United Nations climate conference, which was then occurring in Azerbaijan. Soon after, he fulfilled his promise to pull the U.S. out of the Paris Agreement, with its goal of restraining global warming to 1.5 degrees Celsius over pre-industrial levels.
In this episode, we talk with Kate about why every 10th of a degree matters in the fight against climate change, the difference between tipping points and destabilizing feedback loops, and how to think about climate change in a disappointing time. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: I want to dive into tipping points for a second. Are there particular tipping points that are really frightening to you? Because sometimes it feels like that phrase gets used for almost two different things: There are some tipping points where once we start them … these are physical effects in the climate system that once we start, we won’t be able to really reverse them, and I think the Atlantic Meridional Overturning [Circulation] is the classic example, and we should probably explain what that is.
But then there are other tipping points, sometimes, where it’s like once you start them, they don’t only have this cascading physical effect that’s irreversible, but they have a cascading effect on the carbon cycle.
Kate Marvel: Yeah, no, I mean, they all freak me out quite a lot for different reasons. Your point that we use, at least colloquially, tipping points to refer to a lot of bad stuff deserves a little bit more attention — I personally see tipping points getting confused with feedback loops and runaway greenhouse effect.
So, a feedback process is when global warming affects things that exist on the globe, which themselves feed back onto that global warming. So a classic example of a feedback process is ice melt. Ice is super shiny. It’s very reflective. It turns back sunlight that would otherwise fall on the planet and warm it. And we know — you know, science is very solid on this — that when it gets hot, ice melts.
Jesse Jenkins: That’s a good one. Yeah, we’re clear on that.
Marvel: So when ice melts, you take something that used to be shiny and reflective, and now you’ve got darker ocean or darker ground underneath, and so you’re no longer turning back that sunlight. It’s getting absorbed, and that itself feeds back to the warming. That makes the warming worse. So that is an example of what scientists call — and this is the worst terminology in all of science — we call it a ‘positive feedback.’ Because when normal people hear positive feedback, they’re like, Oh, I’m doing a great job. But when scientists say ‘positive feedback,’ we mean ‘destabilizing process that is making warming worse and might lead to catastrophe.’ So I’ll try to say destabilizing feedback and stabilizing feedback, but catch me out on it if I say positive and negative.
So there are a lot of these feedback processes that we understand pretty well. We know that warmer air holds more water vapor — that’s why we’re seeing more intense, extreme downpours. And we know that water vapor is itself a greenhouse gas. So when the planet gets warmer, you’ve got more water vapor in the atmosphere, which itself is trapping more of the heat coming up from the planet. That is an example of a destabilizing feedback.
So there’s a lot of these feedback processes that we understand fairly well. And then there’s some processes that we are not completely baffled by, but we haven’t really nailed down as much. So that’s why clouds are a huge wild card. A lot of the reason we don’t know exactly how hot it’s going to get is we don’t know what clouds are going to do. We don’t know how clouds are going to reorganize themselves. We don’t know if we’re going to get more of this one type of cloud, less of this other type, if they’re going to get more reflective, more absorbent, whatever. Clouds are really complicated, and that’s a feedback process that we don’t necessarily understand.
But feedback processes are already happening in the climate system right now. They are going on as we speak. That makes them different from something like a tipping point. A tipping point is generally defined as something that we break that we can’t fix on any timescale that’s relevant to us. So an example of a tipping point is the disintegration of the West Antarctic Ice Sheet. It turns out that once you break an ice sheet, it’s relatively really hard to make a new one. We can’t just rock up in Antarctica with, you know, freezer guns or whatever Arnold Schwarzenegger had in the Batman movie. We can’t do that. That’s not real. Once we break the West Antarctic Ice Sheet, it’s going to be broken for the rest of our lives, and our children’s lives, and our grandchildren’s lives.
Music for Shift Key is by Adam Kromelow.
It’s not just what they say over the next few weeks — it’s when they say it.
When the Senate returns from recess next week, it will have Trump’s “One Big, Beautiful Bill” to contend with. There’s no doubt the chamber will try to make changes to the omnibus plan to extend and expand Trump’s tax cuts that passed the House last week. The president even told reporters over the weekend that senators should “make the changes they want to make,” and that some of the changes “maybe are something I’d agree with, to be honest.”
Whether those changes include salvaging the nation’s clean energy tax credits will likely depend on a small group of Republican senators who have criticized the House’s near-total gutting of the subsidies and how much they are willing to fight to undo it.
The bill that passed the House would outright eliminate consumer tax credits for electric vehicles, rooftop solar, and both energy efficiency renovations and new energy-efficient homes. It would also kill the clean hydrogen tax credit at the end of this year and give most zero-carbon power plants, including wind, solar, and geothermal, an end-of-year deadline to start construction, among many other damaging provisions.
To date, at least eight Senate Republicans have spoken out against at least some of these changes, but none of them have tied their vote to the issue. The pressure to stick with your party is “enormous” when your vote is the difference between a bill’s success or failure, Josh Freed, the senior vice president for climate and energy at Third Way, told me. “As we saw in the House, the biggest question is whether any Republican Senator, when push comes to shove, has any willingness to try to stop this bill in order to defend energy tax credits.”
Pay attention to what they say over the next few weeks — and when they say it. It’s one thing to speak out when everything’s still up in the air. It’s quite another to keep talking when votes are on the line.
When the budget fight was first heating up in April, four senators led by Lisa Murkowski of Alaska sent a letter to Majority Leader John Thune warning that repealing the tax credits “would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” The three co-authors were Thom Tillis of North Carolina, John Curtis of Utah, and Jerry Moran of Kansas.
Last week, after the House modified its proposal to phase out the tax credits more aggressively, Murkowski told Politico the Senate was “obviously going to be looking at” the provisions “as well as the final product, and kind of seeing where we start our conversation.” The moderate Republican has a history of supporting environmental policy, and has already broken with her party on at least one vote this year. In February, she was the only Republican who voted in favor of a Democrat-led effort to reinstate 5,500 federal public lands employees that had been fired by the Department of Government Efficiency. (The legislation failed.) Murkowski has also gone her own way to support more efficient energy codes, loans for electric vehicle manufacturers, and the impeachment of President Trump over the January 6 insurrection. But she did not vote for the Inflation Reduction Act in 2022, and if you look at her overall voting record, these occasions of deviating from the party line have been rare.
Tillis, who is a member of the Finance Committee and will therefore be directly involved in writing the tax credit portion of the bill, has made more specific comments. He said he would push to wind down the tax credits more slowly to give businesses more time to prepare. “We have a lot of work that we need to do on the timeline and scope of the production and investment tax credits,” he told Politico in the same article.
While Tillis does not have the same kind of track record as Murkowski, he’s up for re-election next year, and his state has a lot to lose. Some 34 clean energy projects worth $20 billion in investment and tied to more than 17,000 jobs came to North Carolina because of the tax credits, according to the advocacy group Climate Power. Toyota invested in an EV battery manufacturing plant and just started production last month. Several EV charger manufacturers are setting up shop in the state. Siemens Energy is building a factory to make large power transformers, equipment that is essential to expanding the grid and is currently in very tight supply.
Curtis has also continued to rally around the tax credits. He attended a press conference for Fluence, an energy storage company, back in Utah where he told the Deseret News on Tuesday that the House’s changes to the subsidies were “a problem for the future” of energy. “And I think if I have anything to say about it, I’ll make sure that we’re taking into account our energy future,” he said.
When it became clear that the House was considering changes that would effectively repeal the clean energy tax credits in the IRA, Senators Kevin Cramer and John Hoeven of North Dakota, and Shelley Moore Capito of West Virginia chimed in to voice their concerns. Cramer criticized new deadlines the House proposed for ending the tax credits, telling Politico that “it’s too short for truly new technologies. We’ll have to change that. I don’t think it’s fair to treat an emerging technology the same as a 30-year-old technology.”
After the bill passed the House, Jon Husted of Ohio decided it was time to speak up. “You have companies that have already made investments, made commitments,” he told the outlet NOTUS. “Supply chains have been built around them, and we need to phase that out more slowly. I think that they deserve to have at least five years of that credit.” Like Tillis, Husted has an election coming up — and 35 clean energy projects in his state to protect.
The D.C. insiders I spoke to mentioned a few other powerful senators who could play a role in the debate who’ve been mum on the IRA so far. Thune, of South Dakota, has a history of being friendly toward tax credits for wind energy, and was honored by the American Council on Renewable Energy for his support for renewable energy in 2019. Lindsey Graham, chair of the Budget Committee, has also long been a sometimes-ally for climate action in the Senate. His home state of South Carolina has been one of the biggest beneficiaries of the tax credits, with some 43 projects and 22,000 jobs at risk.
Susan Collins also came up repeatedly as one to watch, despite her not saying much of anything publicly about the tax credit changes yet. Collins is up for re-election next year, and while the IRA hasn’t spurred much manufacturing in Maine, it has driven a clean energy boom. The Maine Climate Labor Council, a coalition of unions, estimates there are 145 utility-scale clean energy projects that are either operating or in development that could be eligible for the tax credits. The state has also made a big energy efficiency push in recent years, with the tax credits supporting the expansion of efficiency jobs.
Then there are the potential spoilers. Republicans can only afford to lose three votes on the bill in order to send it back to the House and ultimately to the President’s desk, and the party has already split into a number of factions looking for various tweaks. Some, like Josh Hawley of Missouri, oppose the legislation’s deep cuts to Medicaid. Meanwhile, fiscal conservatives like Ron Johnson of Wisconsin have said they will push to reduce spending even more.
In the House, defenders of the tax credits ultimately cared more about raising the limit on the state and local tax deduction than fighting for clean energy subsidies. We could see a similar dynamic play out in the Senate, where Murkowski and Collins have also expressed concern about cuts to Medicaid. The Senate also can’t afford to change the bill so much that it will lose support in the House, so any changes will have to be surgical. The calculation will be, “What is the smallest thing that the authors of the bill can give these folks to fall back into line so that it is relatively easy to both pass the Senate and then get back through the House?” Freed explained.
Cramer, for his part, is not coming to the rescue for wind and solar, but he may be able to revive support for other forms of clean energy. The North Dakota Senator wrote a letter to Republican leaders in early May railing against the “indefinite entitlement” given to energy sources that depend on the wind and sun, and arguing that the tax credits should prioritize electricity generators on the basis of “reliability,” so as to encourage “geothermal, hydropower, coal and natural gas with carbon capture, and nuclear without excluding wind and solar.”
Capito has barely made a fuss about the energy credits, but she and Cramer will be the ones to watch to see how the Senate deals with the bill’s provision to repeal the Environmental Protection Agency’s greenhouse gas limits for vehicles, as both sit on the Environment and Public Works Committee, of which Capito is the chair. The repeal may not be allowed under the Senate’s rules for budget reconciliation, as it doesn’t have a direct effect on the federal budget. The Senate Parliamentarian hasn’t yet weighed in, but a negative ruling did not stop the two Republicans from leading the fight to revoke waivers granted to California that allowed it to set pollution limits on cars and trucks.
In the end, if any of these Senators wants to take a stand for big changes to the tax credits, they are going to need at least three colleagues to stick it out with them. A more likely outcome, Freed told me, is for them to attempt some smaller adjustments.
“Hopefully they can make it better, but they’re also under enormous pressure to not deviate too significantly from what the House wrote,” he said. “We just need to go in clear-eyed that it's going to be difficult.”
Editor’s note: A previous version of this article misidentified one of the signatories of the letter to Senate Majority Leader John Thune. It’s been corrected. We regret the error.