Why blue hydrogen is a big mistake 

The federal government has announced its preliminary plan to release billions of dollars in funding for seven hydrogen development efforts. At least three of the seven projects plan to produce blue hydrogen.  

This would be a mistake. 

Unlike green hydrogen, which is produced from water using electrolysis powered by renewable energy, blue hydrogen is generated from the methane in natural gas. 

The Department of Energy’s unwise decision to include proposed blue hydrogen projects among its selections for federal funding is a waste of money and precious time. It makes no sense to boost production of a fuel that has little chance of success and cannot be economically produced.  

Instead, the tax dollars targeted for blue hydrogen will serve primarily as a subsidy for oil and natural gas companies to continue producing greenhouse gas emissions that accelerate climate change. One of the projects appears to be based heavily, if not solely, on blue hydrogen, and the other two apparently plan to include both blue and green hydrogen. 

Blue hydrogen is touted as a replacement for climate-altering hydrocarbon fuels, but a recent Institute for Energy Economics and Financial Analysis (IEEFA) report shows that blue hydrogen would likely exacerbate the effects of climate change. The report finds the justification for supporting blue hydrogen is based on a model that includes overly optimistic emissions assumptions.  

The DOE’s model seriously underestimates methane emissions associated with the production and transport of natural gas used to produce blue hydrogen. Current peer-reviewed publications report U.S. average upstream emissions rates are more than two times as high as assumed in the model. With 3 million miles of pipeline in the U.S., tracking and regulating methane emissions remains a significant, uncontrolled problem.  

The impact of methane emissions increases dramatically if they are viewed in the short term. The global warming potential (GWP) for methane is more than 80 times the carbon dioxide figure over 20 years, but the federal model uses a 100-year horizon, which downplays the climate impact of this potent greenhouse gas.    

The model also assumes blue hydrogen production facilities will capture 95 percent or more of the carbon dioxide they produce. But no commercial-scale hydrogen production facility has demonstrated the ability to annually capture emissions at a range higher than 75 percent to 83 percent. Questions also remain about transporting millions of tons of captured carbon dioxide and storing it underground.  

Finally, the model ignores emissions from the compression, transportation and storage of the hydrogen being produced. It also ignores the effects of hydrogen emissions, even though hydrogen is a powerful indirect greenhouse gas with a GWP more than 30 times that of carbon dioxide over a 20-year period. 

Beyond the flawed assumptions in the emissions model, the development of a hydrogen economy would take years and cost hundreds of billions — if not trillions — of dollars, even while proven technologies such as solar and wind power and battery storage exist and have been shown to work. They are less costly and have already made significant advances in the marketplace. 

The planet does not have decades to recover from the damage created by more than a century of heavy fossil fuel use. Instead of attempting to maintain a business-as-usual approach that encourages the fossil fuel industry to produce even more climate-altering fuels for a market that will not exist for decades (if at all), tax dollars should be used to boost renewable energy, strengthen the electrical grid, and take other actions that can decarbonize our economy in far less time than blue hydrogen.  

To the extent that we rely on hydrogen for non-energy uses such as ammonia for fertilizer, or for high-temperature industrial combustion, we need to produce it in a manner that mitigates climate change, instead of accelerating it. Green hydrogen may be a reasonable alternative, although low-carbon solutions that don’t use hydrogen are also being developed to decarbonize important segments of the economy such as steel and concrete. 

Full funding of these projects is not yet guaranteed. DOE will now enter into negotiations with the selected project sponsors about funding, which will be allocated in four decision-making phases. The first phase includes a more in-depth analysis of the project’s design and viability, which could result in changes. DOE must closely scrutinize the claims of blue hydrogen developers. 

Blue hydrogen is not the future. Federal decision-makers must not waste time sinking taxpayer dollars into attempts to bolster speculative ventures for blue hydrogen, a fuel that is not clean and not a solution. Time is running out.  

David Schlissel is an IEEFA analyst with over five decades of experience as an economic and technical consultant on energy and environmental issues. 

Suzanne Mattei is an IEEFA analyst with over 30 years of experience in public interest law and policy.