Does Colorado need hydrogen for a carbon-free future?

Hydrogen can be generated in different ways, with each method having a varying impact on the environment. “Grey” hydrogen is refined from natural gas, a process that currently produces 830 million tons of carbon dioxide per year. Ninety-five percent of hydrogen — including that used in Xcel’s proposed blending project — is produced this way.

When carbon from such projects is captured and sequestered underground, the final product becomes “blue” hydrogen. Only 1% of hydrogen producers currently use carbon capture. Besides scrutinizing the efficacy of current carbon capture technology, environmentalists question the benefit of sequestering carbon over just not producing it at all.

Hydrogen can also be separated from water through electrolysis, which, when powered by renewable wind and solar energy, earns the name “green” hydrogen. That’s on top of other, more obscure hydrogen colors like “pink” from nuclear-powered electrolysis and “brown” from coal.

One technical definition of “clean” hydrogen is embedded in the Inflation Reduction Act, passed in 2022, which provides tax credits to producers based on lifecycle carbon emissions. Still, environmental groups see big differences between these colors — and between hydrogen power and true renewable energy. Because it takes energy to make green hydrogen, many environmental groups would rather ramp up renewable solar and wind power for homes instead of expanding green hydrogen ventures.

“It’s really a scam to call this clean energy,” Silas Grant, a campaigner for the Center for Biological Diversity’s Climate Law Institute, said over the phone. Noting that hydrogen is “overwhelmingly made with fossil fuels,” Grant argues that leaning heavily on hydrogen to power the future will “perpetuate our reliance on oil and gas” and “put frontline communities at risk.” 

Even among environmentalists, there’s differences of opinion on core questions like this. Some groups, including the Sierra Club, support building up green hydrogen to reach hard to decarbonize industries like steel-production and long-haul trucking.

Others oppose it in general, viewing it as a Trojan horse for more dirty fuels. In August, the Center for Biological Diversity submitted a letter to the Department of Energy signed by more than 100 local advocacy groups, urging federal officials to reject all applications for hydrogen hub grants and instead fund solar and wind. It cautioned them against believing the “hydrogen hype.”

In recent years, as fracking operations encroach further into the suburbs, Colorado lawmakers rewrote the rules governing oil and gas to better account for public health and environmental risks. As public approval of the industry hits record lows, it remains to be seen if Coloradoans will accept new and ostensibly greener energy from the usual suspects. 

Perhaps unsurprisingly, industry groups remain optimistic. They say hydrogen promises a greener future and should be embraced regardless of its color.

The American Petroleum Institute, an oil-and-gas industry trade group, lists hydrogen production as a top priority under its climate change pivot plan.

“We generally don't try to talk about blue versus green or any of that, because our members are interested in all of it,” Rachel Fox, an API policy advisor, said in an interview. She said API members are “big supporters of all of the above energy solutions” as long as they reduce carbon impact. And since Colorado is already producing grey hydrogen, she argues "the biggest early adopting opportunities” lie with tools like carbon capture.

If financial opportunity is the carrot driving hydrogen expansion, government decarbonization deadlines are the stick. Using 2005 levels as a baseline, Colorado has committed to cut greenhouse gas emissions 26% by 2025 and 90% by 2050. 

Governor Jared Polis, a Democrat, wants to push the Centennial State to source 100% renewable energy by 2040. To this end, he signed the Advance the Use of Clean Hydrogen Act into law this year, directing the Public Utilities Commission to create rules guiding the industry to produce “clean” hydrogen with limited carbon dioxide.

Last year, Colorado also banded together with three oil-and-gas-producing neighbors — New Mexico, Utah and Wyoming — to form WISHH, the Western Inter-State Hydrogen Hub. The group submitted a proposal to the U.S. Department of Energy asking for a $1.5 billion grant to ramp up hydrogen production.

A concept paper envisions harvesting hydrogen from biomass in Utah, electrolysis in Colorado and industrial processes in Wyoming. The proposed funding could allow Wyoming to scale blue hydrogen production and pipe it south to power Colorado's Front Range and west to fuel long-haul trucks in Utah.

The Department of Energy sees such hubs as a vital part of the nation’s renewable-energy portfolio and is expected to announce $7 billion in grants for them later this year. Anja Richmond, program director for WISHH, said the inter-state compact looks to support both blue and green hydrogen because “the problem we're trying to address is greenhouse gas emissions and carbon intensity.”

“We are energy producers, and we look at all forms of energy,” Richmond added. “As long as we're addressing the problem — how do we deliver low-carbon-intensity hydrogen — then the source becomes secondary.”

Frank Wolak, president of the Washington, D.C.-based Fuel Cell and Hydrogen Energy Association, commended the feds for recognizing what he sees as a national need for a diverse energy profile that includes the humble element. He’s been interested in developing alternative energy sources since 1973, when he found himself waiting in line for gas while he was in high school.

That year, U.S. involvement in the Arab-Israeli War prompted members of the Organization of Petroleum Exporting Countries (OPEC) to cut off oil exports, shocking the U.S. economy that relied on them. This defining moment in history sparked an interest in energy conservation and domestic energy production and inspired a generation to search for better fuels.

It was a defining moment in Wolak’s life, too. “I always knew that I wanted to be involved in activities that were increasing energy efficiency and making the world a better place,” he said. He spent his career looking for ways “to be more efficient, use less energy, treat the planet kindly, and still operate in the civilized, highly industrialized world we're in.”

Still, Wolak is a pragmatist. He acknowledges that hydrogen isn’t a one-size-fits-all solution to the ongoing climate crisis. “Like with any innovation,” he said, there’s “natural limits of practicality.” 

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