Midwest hydrogen hub is moving forward with $22M federal award, but community concerns persist

After more than a year of negotiations, the U.S. Department of Energy awarded a multistate alliance of private and public entities $22.2 million to advance hydrogen energy use in the Midwest.

This is the first of four multimillion-dollar cash infusions totaling $1 billion that the Midwest Alliance for Clean Hydrogen expects to receive over the next eight to 12 years. It will use the money to build a “clean hydrogen hub” composed of eight hydrogen production and distribution projects spanning Illinois, Michigan, Indiana and Iowa.

Hydrogen is an efficient and flexible energy carrier that can be produced with zero to near-zero carbon emissions. It’s been poised as a promising tool to decarbonize heavy industries such as steel and long-haul transportation that have struggled to part from fossil fuels and are heavily concentrated in communities such as Little Village and East Chicago.

Yet, days before the Wednesday funding announcement, activists gathered in East Chicago’s Tod Park to protest one of the hub projects that would produce hydrogen using natural gas from BP’s nearby Whiting refinery. Emissions would be captured by a yet-to-be-built carbon capture and sequestration pipeline.

Activists challenge the alliance and federal government’s claims that the project is clean. It relies on fossil fuels, and they’re skeptical about the efficacy and safety of the pipeline.

“We don’t need this hub or the pipeline anywhere near our kids. The pipeline will lead to another generation of environmental and health consequences for East Chicago and Lake County, (Indiana),” said Akeeshea Daniels, 48. She said she and her children were exposed to lead and arsenic while living for over 14 years in a public housing complex that has since been designated as uninhabitable by the U.S. EPA.

Situations like this have fostered a deep distrust in government and industry claims that projects are safe and clean among environmental justice communities.

Activists’ concerns only mounted Wednesday. During a last-minute call requested by the Department of Energy, they learned the pipeline would not fall under the Midwest alliance’s purview.

“This convoluted situation allows for a tremendous amount of finger-pointing between federal agencies while at-risk environmental justice communities’ safety continues to be toyed with,” according to a statement published Wednesday by rally co-organizer Just Transition Northwest Indiana.

Moments after the call, the Energy Department announced the initial funding award for the Midwest alliance.

“The only thing standing in their way was that meeting,” said Lauren Piette, a senior attorney with Earthjustice, the rally’s other co-organizer. “In hindsight, it feels like a box-checking exercise.”

Representatives from the Energy Department did not directly respond to the Tribune’s questions about the purpose of Wednesday’s call and the timing of their award announcement. Instead, they offered a broad declaration that the hub would benefit communities like East Chicago.

“Projects like the H2Hubs are bolstering economic growth and helping ensure every American benefits from our transition to a clean energy future, particularly those in communities that are marginalized by underinvestment and overburdened by pollution,” said a department spokesperson.

A major investment in hydrogen energy — and the Midwest — is met with hope and concern

Despite their best efforts, representatives from Earthjustice and Just Transition Northwest Indiana said their organizations have been unsuccessful at initiating direct contact with the Midwest alliance.

The alliance’s Chief Integration Officer Neil Banwart said his team has been waiting for this initial round of funding, which is largely intended for planning, before engaging in project-specific conservations with any local communities.

“We didn’t want to say this is absolutely going to be built here in this timeline and get ahead of ourselves,” he told the Tribune Thursday. His team is planning a town hall for early December.

Another one of the alliance’s proposed hydrogen production projects using Illinois’ nuclear fleet still hangs in limbo. Its financial viability hinges on a lucrative hydrogen production tax credit entirely separate from the Energy Department funding.

The alliance is asking for guidelines that afford it some leeway as it scales a novel hydrogen infrastructure.

“If we make it too hard for hydrogen to take off, we take it out of our toolbox to address climate change,” said the alliance’s Chief Decarbonization Officer Jennifer Dunn shortly after the federal government proposed strict guidelines in February.

But, many environmentalists say any effort to build hydrogen infrastructure must commit to the highest emissions-control standards out of the gate. They celebrated February’s draft guidance which would limit tax credit eligibility to projects that produce hydrogen using carbon-free electricity from new power sources. This would ensure the limited clean energy on the grid isn’t siphoned away from its current uses, a scenario that could require fossil fuel plants to start up and compensate.

“The hub could still become a tool for decarbonization that benefits the community, but it needs to dramatically change course,” Piette said. She’d only like to see hydrogen projects that use new wind and solar energy pursued.

Banwart said he expects finalized tax credit guidance by the end of the calendar year.

Another wildcard is how President-elect Donald Trump will treat efforts to build out the nation’s hydrogen infrastructure when he reenters the White House in January. The Midwest Alliance for Clean Hydrogen is one of seven hydrogen hubs across the country collectively supported by $7 billion in federal funds.

Banwart stressed that the hubs have received bipartisan support. Wednesday’s funding for the Midwest hub was celebrated by Illinois and Michigan Democratic governors and Indiana’s Republican governor and governor-elect.

“I suspect (the hubs) will go forward with a rebrand,” said Susan Thomas, director of legislation and policy at Just Transition Northwest Indiana. “Maybe the ‘clean’ veneer will be taken off. That might actually be more honest.”

Trump has recently raised questions about the safety of hydrogen energy, but many of his cabinet picks and major fossil fuel companies he’s aligned with support the hydrogen hubs.

“The new administration should know that front-line communities are watching and are going to continue to make clear that they don’t want their tax dollars going toward hydrogen that’s going to harm their families and the climate,” Piette said. “There remains a lot to be seen, but our concerns and watchful eye will continue forward.”