 Thank you very much for joining us today for our briefing, maximizing the climate benefits of hydrogen, and I'm really, really pleased to be here today in partnership with our friends at the Environmental Defense Fund, so thanks so much to their support for this event. We also have them to thank for lunch as well, so a big round of applause. I'd like to say a very special thanks to Representative Sean Caston and his staff for also helping us secure the room today. Thank you so much. I'm Dan Bresset. I'm the president of the Environmental and Energy Study Institute. ESI, if you're for the uninitiated, we are based here in Washington, we're a climate policy operation. We were founded in 1984 on a bipartisan basis by members of Congress to provide educational resources about clean energy, climate, and environmental topics for members of Congress and other policy makers. And our target audience all the time is the congressional staff person. We want to make sure that our resources are timely so that they're ready when you need them or before you need them ideally. They're relevant, they're along the lines of what people are working on in the House and the Senate. They're accessible, everything is free and available online, and they're practical. And our resources are things that can be easily used, especially when your boss shows up at your desk and has a question and you've got 30 seconds to come up with an answer. You can probably find it if it's a climate change question if you visit EESI.org. We do briefings a lot. It's great to see so many folks in the room today. We're in the middle of a Farm Bill series. We cover lots and lots of different topics, today's Green Hydrogen, but we also are doing a Farm Bill series. We have two more briefings in that series. One is next Wednesday, about Forestry, and then on June 21st we'll be back to talk about conservation programs. We also did a briefing a little earlier this year about organics, and I mentioned that because that was done in partnership with our friends at the Natural Resources Defense Council. I wanted to make sure to give them a shout out. We also work very closely with the Department of Energy. We've done recent briefings on the Office of Energy Efficiency and Renewable Energy. We also did a briefing on April 19th with the Office of Nuclear Energy, and so we try to cover lots and lots of ground and help keep staff up to date with things going on over at DOE. We also did a briefing. We've done a lot of briefings. There's like one every, I think it's like more than two weeks every, which is pretty incredible. We did one in mid-March, though, that I want to call your attention to. That was done with the Business Council for Sustainable Energy, and a lot of the topics that we're going to talk about today was covered in that briefing, but at a higher level, and it really is a great overview of kind of the energy system in the U.S. and how things are changing. Coming up, I mentioned the Farm Bill briefings. We also have a Clean Energy Expo. That's something that we do in coordination with the Senate Renewable Energy and Energy Efficiency Caucus, and that's co-chaired by Senator Mike Crapo and Senator Jack Reid. That's going to be Tuesday, July 18th. There's a flyer outside on the table, and the table is loaded with resources, including the slides that we will see a little bit later today. That's a lot, and I know that's a lot, and it's nice that you're all being polite and quiet. That's because you're eating sandwiches, but the best way to keep up with what we're up to is to visit us online and sign up for our bi-weekly newsletter. The latest edition came out on Tuesday. It's called Climate Change Solutions. It's a great resource, not just for ESI events. We also have an implementation tracker to help you keep track of programs that have been enacted as part of the infrastructure bill, or the Inflation Reduction Act, and other events, and just general goings on legislative tracker, hearing trackers, all that kind of stuff. I would like to say a few words before I introduce our panel today. I'd also like to encourage everyone, since we do have lunch, remember the people who will be cleaning up, and so try not to make a mess, don't get mustard everywhere. Try to do that as well. We encourage everybody to, as long as you're not chewing into the microphone, that's where we might have a problem, so please enjoy. The hydrogen industry has grown tremendously over the last several years. There's more than $500 billion in projects that have been announced worldwide, and dozens of countries have established national hydrogen strategies and policies, and the United States is at the front of the pack when it comes to clean hydrogen, or hydrogen. Over the last 18 months, Congress has passed more than $20 billion worth of funding and policy incentives for hydrogen production, distribution, and use. This includes about $8 billion for regional clean energy, regional clean hydrogen hubs, and what those do are create networks of hydrogen producers, consumers, and connective infrastructure, while also demonstrating the benefits that well-designed hydrogen projects can offer communities. It also includes funding for the Department of Energy's Hydrogen Shot, which is a research, development, and deployment program designed to accelerate clean energy breakthroughs and bring down costs, and very importantly, it includes the 45-v hydrogen production tax credit, and that provides up to $3 per kilogram of clean hydrogen, and that happens over the next 10 years. That's the largest hydrogen subsidy anywhere in the world, and it was only enacted in August. So there's a lot of things happening right now, and this is a very timely topic. It's also a really interesting topic, and one that has a lot of potential. Hydrogen's set for a moment, and that brings us today. And so our panelists represent three organizations, the Environmental Defense Fund, Natural Resources Defense Council, and Clean Air Task Force that are working very hard to inform the deployment of these resources to get hydrogen right. And that's because hydrogen can be made, moved, and used in many different ways, and some of these ways, some of these pathways, are cleaner than others. And that's what we're here today to discuss, how to structure policies and incentives to maximize the clean energy benefits of hydrogen. And for green hydrogen, and if you don't know, hydrogen comes in a rainbow of colors. This means establishing proper frameworks for renewable electricity accounting. For blue hydrogen, that means accounting for upstream methane emissions. And for both, it means minimizing the amount of hydrogen that is leaked into the atmosphere. We cover hydrogen in lots of different ways, and I wanted to mention a briefing we did a little bit more than a year ago. Rachel was part of that briefing. It also featured Representative Don Beyer, and it featured the director of DOE's Hydrogen and Fuel Cell Technologies Office. We also had a senior researcher from the National Renewal Energy Laboratory. That's definitely worth checking out, too. And during our climate camp, we actually did a briefing just on non-CO2 greenhouse gas emissions. And we'll talk a lot about methane today, and if you'd like to learn more about methane and its impact when it comes to climate change, I would encourage everyone to check out that briefing. It was really, really good. That was mid of February, if I remember correctly. That brings us to our panelists today. We have a very robust, I would say, in-person audience. We will have time for Q&A, so save your questions till the end. I will call on folks from here in the room. We also have a robust online audience, and if you're in our online audience and if you have a question, you can send us an email. The email address to use is ask—that's ASK—at EESI.org. You can also follow us on social media at EESI online, and if you do that, be sure to use the hashtag EESI talk. That'll help us find your question, and we'll do our best to incorporate those online questions into our discussion. Our first panelist today is Rachel Fockery. Rachel leads and sets the strategic direction for the Natural Resources Defense Council's advocacy around emerging technologies, including efforts to bolster federal investments in clean energy research, development, demonstration and deployment, ensuring the responsible and climate-aligned deployment of renewable hydrogen, as well as developing and helping to coordinate NRDC's position and engagement on other emerging technologies that may be necessary to achieve net-zero emissions by mid-century. Rachel, welcome to the briefing today. I'll turn it over to you, and let me advance to your slides. As always, I forgot to click through things, but that's for you. Thanks. Great. Thanks so much, Dan. Thank you, ESI and EDF, for putting this together. This is my second EESI briefing, and I always love doing them. I think they're extremely lively, and I think today's panel is holistic, and you'll get a really good feel for the various challenges and opportunities with hydrogen, so very excited about that. As Dan said, I work for the NRDC, and I direct their hydrogen work and emerging technologies work. This is a very, very timely conversation we're having today. Dan teed it up. There is a big tax credit that passed on the IRA to incentivize clean hydrogen production, that's the 45-v tax credits. I will focus on a specific piece of it. I will help situate folks which piece I'm covering and which piece my panel panelists will be covering. So to help situate folks, some of the key points I'm covering are first to stakes of this credit. It's a lot of money. It's billions of dollars of taxpayers' money on the table, with potentially hundreds of, this should be, millions of tons of carbon emissions, big typo. It all hinges on the Biden administration, which will be implementing this credit. So it will be the decision-maker on how good or bad it ends up being for the climate, and will argue for the need for rigorous guardrails in the form of three pillars. Some of you may have heard about them, some of you not, and I will go through them. That's OK. Those are new clean supply, hourly matching, and deliverability. These three pillars are necessary to prevent significant increases and meet the IRA's requirements, will support robust, clean hydrogen industry growth, and require simple reporting on the part of the hydrogen producer. So I'll start with some context setting. As you may or may not know, hydrogen is not new in our economy. We already use it largely in a few niche industrial applications like oil refining and to produce fertilizer. We produce it from natural gas because natural gas pretty much contains hydrogen. And the process is highly emitting, colloquially referred to as gray hydrogen, although we're starting to move away from colors. There is now a lot of interest as Dan teed up in using hydrogen far more widely in the economy to decarbonize some specific sectors in our economy that are very difficult to decarbonize otherwise. So those could be aviation, shipping, some industrial processes. But you may be thinking, well, we have to clean up the production process first, and that's absolutely right because it's currently dirty. There are various ways of cleaning up the production. Two of the main pathways being envisaged are, quote unquote, blue hydrogen and renewable or electrolytic hydrogen. Blue hydrogen essentially is a similar process to how hydrogens produce today from natural gas, except that you equip it with carbon capture and storage to reduce the carbon intensity. Electrolytic hydrogen is basically a very different process altogether. You use water to produce the hydrogen instead of natural gas because water is H2O. It has hydrogen. You just run through in electric current through water, split it into its constituents, and get the hydrogen out. And if the electricity is clean, green, then the whole process is zero carbon. I'll be focusing on the electrolytic hydrogen piece specifically. I know David will be focused on one challenge with blue hydrogen. And Melissa will be touching a throw line across all of those, which are hydrogen emissions. So just keep in mind, from my presentation, I'm focused on the green piece. So take a step back. What is that 45-vehicle hydrogen tax credit? It essentially is a way for the government to incentivize those newer, cleaner forms of producing hydrogen because those are so expensive relative to today's gray status quo hydrogen. It's not based on any colors. It's technology neutral. It just is based on a greenhouse gas intensity of hydrogen production. So on the far right is today's status quo, gray hydrogen carbon intensity. It produces roughly 10 kilograms of carbon per kilogram of hydrogen. As long as a hydrogen resource is at least 60% cleaner than today's hydrogen, it starts qualifying for that tax credit. And the cleaner it is, the higher the tax credit a hydrogener project can receive. And as you can see, that very far left $3 line, that is the big prize. It's a large tax credit. It's $3 per kilogram. It's only eligible for projects that are very, very clean, more than 95% clean than today's status quo hydrogen. That jump at the end, this makes it clear that Congress really wanted to incentivize the cleanest hydrogen in our economy. It's a substantial and long-lived subsidy. It's hard to estimate just how much. It's uncapped. It will depend on deployment. We estimate it's going to be more and upwards than $400 billion over its lifetime. Just to give you a sense of how much money one project could get, that's our colleagues at Energy Innovation had estimated that one announced project in Texas to produce hydrogen. We'll be getting roughly $3 billions of subsidies over its lifetime from both the hydrogen subsidies but also the renewable subsidies in the IRA. So that's a lot of money. It's also very long-lived. It couldn't run through 2045 or so. So you can imagine projects online by 2045 still getting taxpayers' dollars. So it's a very long-lived subsidy. The implications of the credit changed on the Biden administration. So specifically, Treasury is directed to determine the guidelines for implementation of the credit. As I mentioned, the subsidy is tied to the life cycle greenhouse gas emissions of hydrogen project. Treasury is directed to come out to issue guidance in the summer for calculating life cycle greenhouse gas emissions, i.e., which projects would be eligible for the subsidy. It's not just Treasury, however. DOE, EPA, and the White House are closely engaged, providing recommendations to Treasury, and so on. And we expect Treasury guidance by August of this year. Great. So that's the context. Let's move on to the complexity. Calculating life cycle greenhouse gas emissions of hydrogen can be quite tricky. And I know David and Alissa will cover different pieces of that issue. And the complexity varies, really, from project configuration to another. So let's start with the easy. These are referred to as behind-the-meter project. So I'm a hydrogen project. I'm connected directly to a new wind farm, right? Not drawing any power from the grid to produce hydrogen. Easy, right? My emissions are zero. But the complexity is far higher for a project. I'm still the hydrogen project. Connected to the grid, drawing a lot of grid power, a lot of fossil fuel electricity, producing a lot of emissions, but purchasing credits, stating that it's OK because my emissions are somewhat being offset on the grid by the virtue of buying these credits. This should already start ringing hollow, right? We need really rigorous rules around those credits, those offsets to make sure they're actually effectively reducing the emissions that I'm producing, or at least preventing emissions from my project operations. This is especially true for hydrogen production by way of electrolysis. Electrolysis is an electricity-hungry process. Remember, we're splitting water into its constituents. We need a lot of power to do that. More than 25% of electricity is lost in the process. This means that even small shares of fossil fuel electricity powering my electrolysis project would drive a lot of emissions. This is a key point I would impress for you to keep in mind that even small shares of fossil fuel electricity would drive emissions significantly high for electrolysis. And this, despite the bad formatting, this will illustrate what I'm saying. So this is a graph showing the carbon intensity of various hydrogen processes. The first one is today's status quo hydrogen, roughly 10 kilogram of CO2 per kilogram of hydrogen. The one next to it is electrolytic hydrogen produced by today's average US grid, which is still very fossil fuel dominated. It's twice as bad. The one on the right is electrolytic hydrogen produced by coal electricity. That's four times worse than today's dirty hydrogen. And that's the tiny sliver of the threshold to actually qualify for the top $3 credit. You have to be very clean. So conclusion here is just by virtue of producing hydrogen with water, doesn't make it clean. Your electricity absolutely has to be very clean. Now, if treasury guidance is weak, as it relates to those credits that these projects can claim, then these two very dirty processes could actually qualify for that $3 credit. And if we deploy a lot of these hydrogen projects that are very highly emitting, then we would have tens to hundreds of millions of potential emission increases in this decade. Remember, this is a decade that's highly consequential. We need to get as many emissions reductions as we can. This outcome would be completely contrary to the course that we have to be on. Great. So before we get into what the solution is, the good news is that the IRA provides a very clear indication of how treasuries should go about determining life cycle emissions. It sets the boundaries of those emissions really well. I'm going to do some shameless advertising, but we worked with the Clean Air Task Force on the legal analysis that digs into that. I have the link in there for folks who are interested in a deep legal brief. But I'm happy to give you the high spiel here. The IRA defines hydrogen's life cycle greenhouse gas emissions by referencing a specific section of the Clean Air Act, section 211 OH1. This is the section that implemented the federal renewable fuel standard. This section requires EPA to account for two sets of emissions in determining whether a biofuel is eligible to be a renewable fuel under the standard. It has to account for both direct emissions arising from that fuel, but also significant indirect emissions. And this is the really interesting piece. EPA has interpreted those significant indirect emissions to include system impact. So for example, if a farm that's producing the fuel has to deforest, produce a lot of emissions, those emissions have to be accounted for in the fuels emissions. But also interestingly, if that farm used to produce corn for human consumption, stopped to produce corn for biofuel, driving a new farm to have to meet that human consumption gap, deforest, produce emissions, those emissions all have to be included within the fuels emissions. So the analogy here that I would like to impress upon you to keep in mind is the IRA really wants Treasury to look at the system-wide impacts of a hydrogen project. What sort of emissions is it driving inducing on the grid if it's driving fossil fuel increases because the credits are very cheap or very ineffective, then those emissions have to be accounted for. So keep in mind this notion of system-wide, grid-wide emissions. So getting into the solutions, this is where the three pillars come in. You can think of them as guardrails around those credits that will be used by hydrogen projects, but also necessary to ensure that there are no emissions increases on the grid, which the IRA wants Treasury to account for. There's a lot of evidence supporting this notion that the three pillars are necessary to prevent emissions increases, just added the resources here if folks are interested. Let's start, let's dig into what these three pillars actually are. The first pillar is new clean supply or additionality. It's a very simple concept. It just stipulates that a hydrogen project must be powered by a clean energy project that's not currently on the grid because consider it the alternative, right? If a hydrogen project can just locate on the grid and not bring in any new supply, then that will be added demand on the grid with no new clean energy to supply it, so emissions will increase because fossil fuels were ramp up. And this is a graph from energy innovation showing just how much higher emissions would be without additionality, far higher than today's status quo hydrogen. I will go through those quickly because I need to wrap up. The second piece is hourly matching, also a very simple concept. Great, so I made sure there's a new clean project to supply my operations. This stipulates I can only operate during the same hours as this, say, wind or solar projects are operating because the alternative is what kind of direct system is today, so it's based on an annual level. So I'm a hydrogen project, I use 100 megawatt hours of grid power this year. I just purchase 100 megawatt hour of, say, Rex that were produced on an annual basis by a solar farm and that's it. This should ring hollow already, right, because I could be drawing grid at night when it's hyper-dirty, producing a lot of emissions, and that solar project that's perfectly offsetting my emissions is actually generating during a much cleaner kind of time of the grid, so the emission accounting doesn't work. I'm still driving a lot of emissions on the grid. And this is an MIT study that shows just widely high emissions of an annual matching sort of scheme or regimen. I will skip those, but this is not new. Annual matching is known to be very ineffective at reducing emissions, which is why corporations are moving away from it into hourly matching, matching their operation on hourly basis with renewables. And then finally, the livability essentially requires there be some boundary, geographic boundary, between when the hydrogen project is located, where the renewable project is located. Because if there's complete dissociation between the grids, then that renewable energy is not reaching me, right? I'm still driving fossil fuel electricity where I am without having renewable energy to offset those emissions. So there has to be some boundary around where those projects are located. So with that, I'm happy to wrap up. Thank you. Thank you, Rachel. Rachel had great slides and there's a lot of great information in there, and I just wanted to mention that once again, all of the presentation materials are on the front. Oh my goodness, I was facing this way. I didn't see all of the extra people show up. The slides are out on the table, so if you'd like a printed copy, but they're also available on our website, and that's www.esi.org. So you can go back and check out Rachel's presentation if you wanna watch it again, and the live cast will be up in the next day or two if you wanna rewatch Rachel's presentation. David McCabe is our second panelist today. David has been with the Clean Air Task Force since January 2010, focusing on methane from the oil and gas industries. David engages with industry regulators and researchers to better understand emission sources and practices and technologies to reduce emissions. David has designed and managed studies on the economics of leak detection for oil and gas facilities, and on the alternatives to flaring associated gas from shale oil plays. Prior to joining the Clean Air Task Force, David served as a AAAS Science and Technology Policy Fellow at EPA. David, I'll turn the lectern over to you. I'm looking forward to your slides. Or you can just watch Rachel's slides again now. Don't have much choice. Thank you, Dan. It's exciting to give an ESI briefing. I have sat in those chairs many times. As Dan said, my work at Clean Air Task Force focuses on understanding methane emissions from the oil and gas industry and looking for direct lines for how we can reduce those emissions rapidly. And Rachel did a great job of setting this up and kind of explaining a little bit about the wider hydrogen landscape. Methane emissions come into play for blue hydrogen when hydrogen is made, or for gray hydrogen, when hydrogen is made from natural gas. And I'm going to focus today on why we need to worry about the methane emissions associated with that hydrogen and then a little bit with a little less expertise on the structure of 45V than Rachel had on how the accounting rules should be set up to properly account for methane and incentivize reductions in methane. So let me just start quickly with a few thoughts about why we need to worry about methane. Methane has certainly come more into focus for climate advocacy in recent years, but it's still very much the number two climate pollutant behind carbon dioxide. Nevertheless, it's a tremendous problem today. Over the short term, it's 80 times more potent, ton for ton than CO2 as a climate warmer. And to sort of get to the point, about half a degree Celsius of the warming we're already experiencing today is due to methane emissions. So when you consider all the impacts we're already seeing today, about half, which come from a little bit more than one degree of warming, almost half of that is due to methane. So it's a tremendous problem. Quite bluntly, climate goals cannot be met without steep methane cuts. Oil and gas is one of the largest sources both in the US and globally for methane. And importantly, it's by far one of the easiest sources to rapidly reduce. Methane is the main component of natural gas. It is one of the industry's products. If they can simply keep it in the pipe, they can sell more of it. That's much easier than diffuse sources of methane like agriculture. So this slide, to simplify things, starts by just looking at a power plant. Let's look at the total greenhouse gas implications of using natural gas in a power plant. Because of the potency of methane and the leakiness of the system observed today, upstream methane emissions are a large part of that climate impact. This is a very official point of view from Nettle recently on how much methane comes from, or how much of the life cycle impact of natural gas comes from methane emissions. Methane is the orange portion of the bar. So for a natural gas combined cycle power plant today, about a quarter of the emissions, according to Nettle, come from methane. Methane leaks upstream of the power plant. That means if I take CCS and put it on that power plant, I've actually only reduced emissions about 60%. And that's not what we need for decarbonization. And then finally, just to emphasize this point, Nettle is, this particular analysis really underestimates methane's impact. For two reasons. One, it underestimates the amount of methane. And two, is they're using a hundred year global warming potential, which is very common and that's how 45V will work. But that also underestimates the climate impacts that we're gonna face from those methane leaks compared to using a shorter term global warming potential. This situation will be even more true as you'll see on the next slide for hydrogen. That's because converting, as you mentioned, converting methane into hydrogen in a blue hydrogen or a gray hydrogen plant is somewhat inefficient. So that magnifies upstream emissions. So the upshot here is that upstream abatement is necessary for energy systems utilizing CCS, including blue hydrogen, for them to achieve their decarbonization potential. We need a lot more than a 60% cut. Like I said, sorry, these colors aren't the clearest. For blue hydrogen, the situation is actually even more remarkable. These figures are different. They're from a different source. So they're calculated with a 20 year GWP. And they are also showing two different methane leak rates. If we have the higher leak rate shown in the top, these are two different estimates for two different routes for blue hydrogen, SMR and ATR. The upper panel shows if you had a 3.5% leak rate for methane upstream. That's kind of pessimistic, but it's not crazy. That's probably about the world leak rate. So if you build your blue hydrogen plant and you manage to capture 90% of your CO2 from that plant, that's great. So you have this tiny little bar for emissions from the plant, but the problem is your upstream methane emissions are so large that you've really barely gotten anywhere compared to if you had just burned methane directly with no CCS for the same heat load. So you really aren't getting anywhere without addressing upstream methane. The bottom panel shows a much more optimistic leak rate, about 1%. That's definitely less than the US average today. But you see, we're sort of in the same story as the previous slide. Yeah, you've reduced emissions by half. That's not what we need for decarbonization. So just a few thoughts here on how accounting should address this issue for 45V. And let me stress that I'm a scientist. Cleaner Task Force, did that analysis? Not me, we have lawyers too. So, but I think there's some very general ideas that really need to come into play that the emissions story tells us about how the accounting should be structured. First of all, I think I've made clear and make sense. Upstream methane will be the largest source of life cycle greenhouse gas emissions for blue hydrogen. So you got to account for it correctly or the accounting isn't right. I haven't really gotten into this, but EPA inventories, such as the US greenhouse gas inventory, such as the greenhouse gas reporting program, the same problem occurs in other countries too. They substantially underestimate oil and gas methane emissions. For reasons that are pretty well understood but hard to fix in a governmental inventory. A large number, probably at this point hundreds, of what we call top-down measurement studies where we measure methane emissions by flying around or driving around oil and gas facilities have demonstrated conclusively that equipment-based inventories like EPA's inventory significantly underestimate emissions. But they also show, and the equipment-based inventories show this too, that there's a huge variation between regions and also between operators, between natural gas producers. And so just as an example, I could have put many slides. These are aircraft studies of emissions, I apologize for the small font, in various natural gas mainly producing areas. So you have a variation from 9% to well below 1% leak rate. Models such as GREET from DOE's model from Argonne, take into account some of these national assessments of emissions as measured with these top, what we call top-down approaches, but they still underestimate emissions because of some of the accounting that GREET is doing. So they're estimating about a 1% leakage, which you can kind of see on the graph above, it's kind of low. Those graphs don't include the Permian Basin, which is currently producing a tremendous amount of US natural gas. Emissions estimates over the past few years in the Permian Basin are like three to 9%. So GREET's 1% is too low, but also using a national average is just not the way to do this when you have such huge variability. And this is my last slide, and it just sort of summarizes some best practices to think about based on these lessons. Once again, the official inventories and GREET are both underestimating emissions substantially. So emissions need to be based on what's measured, not bottom-up equipment and inventories. Also, I think it's really important that emissions estimates be transparent, both the inputs that go into the calculation and the calculation methodology. So that's gonna be a key factor. Upstream assessments of emissions should be based on specific operators and based on specific producing regions. You will even see variability for a certain operator between producing regions, quite a bit. You can't get it right by just using national figures. And then there's that example again from the Permian Basin, a national figure from some EDF scientists was about 2.3% leak rate, but the emissions in the Permian are much higher. And I think this is important. If the structure that the Treasury sets up for 45V does include some default estimate of upstream emissions, that needs to be conservatively high. That needs to incentivize hydrogen producers to require their suppliers to provide information on gas origin and emissions associated with that gas. Otherwise, they can just go with a default and that may not be realistic. So if there is a default, it needs to be conservatively high for them to be incentivized to get that information from their suppliers and show that their emissions are not so bad. And it's important to say that that can have the benefit of incentivizing the producers to reduce emissions because as you've mentioned, the volumes are very substantial under 45V. And the last thing I'll say is, although it's difficult, leading jurisdictions and then voluntary collaborations between oil producers, gas producers and other parties are developing rigorous methodologies for quantifying emissions. I don't even have time to list them because there's a whole bunch of them, but those will also allow producers to credibly cite methodologies that are used to quantify upstream emissions. And I will leave it there. Thank you, David. Just real quick follow-up. Any idea of when the guidance might be expected? Yeah, like sometime in the future. What's that? August. It's due in August. August, okay, okay, great. I wanted to just ask that quick. Also, that was a great presentation. A lot of that was covered also in our non-CO2 greenhouse gas emissions briefing. Debbie Gordon with RMI is on our advisory board and she did especially excellent presentation. That was a really good panel, but if you'd like to do a deeper dive into methane in particular, I really recommend that. If you have questions and there's a lot that's been discussed so far, we'll definitely take questions from the room. If you're in our online audience, you can send us an email and the email address to use is askaske.org. You can also follow us on social media at ESI online and use hashtag ESI talk to get us questions that way. Our third panelist today is Alyssa Occo. Alyssa is a senior climate scientist at the Environmental Defense Fund. She's passionate about identifying and facilitating the most effective and pragmatic solutions to the climate crisis. Alyssa works closely with public and business policy and business experts, economists, lawyers and other scientists to translate the best available climate science into actionable strategies to curb climate change, particularly in the coming decades. And that includes by communicating with non-experts and making information more accessible and understandable. Alyssa's research focuses on better understanding how short-lived climate pollutants like methane and hydrogen and their mitigation influence the climate. Alyssa, welcome to the clicker. I will advance and turn it over to you. Looking forward to it. Hi everyone, I'm really happy to be here and especially to talk about a topic that I have been living and breathing for the past few years. It's gotten to the point where it literally shows up in my dreams, hydrogen. So, yeah, so very near and dear to my heart and I'm more than happy to continue the conversation after this and have anyone reach out if they wanna learn more, especially because what I'm gonna be talking about today is arguably the lesser known climate impact of hydrogen systems. And that is what happens when we emit the hydrogen into the atmosphere. And so basically one of the concerns that we have with hydrogen systems is that hydrogen is the smallest molecule in existence and it can escape from the entire value chain. So now we're not talking just about producing hydrogen, but producing hydrogen, moving hydrogen, storing hydrogen, managing hydrogen and then ultimately using hydrogen. The hydrogen can escape into the atmosphere at any part of that process. And when it does, it can warm the climate. Now the way that it does this is very different than carbon dioxide. So carbon dioxide is itself a heat trapping gas that absorbs heat, hydrogen is not. What hydrogen does in the atmosphere is that it influences atmosphere chemistry in a way that increases the amounts of other greenhouse gases. So the mechanism is very different and bear with me through a little bit of chemistry just because I think it makes it much clearer how the hydrogen ultimately warms the climate. So basically the majority of hydrogen that's emitted is actually eaten up by microbes in the soil but the remaining hydrogen which is around 20 to 30% of that hydrogen sticks around in the atmosphere for around a few years and before it is oxidized by the naturally occurring hydroxyl radical which is the same radical that is responsible for oxidizing a whole number of different chemicals and compounds in the atmosphere. And so when this process happens and it can happen in the lower atmosphere, it can happen in the upper atmosphere, when it occurs it triggers different pathways that end up increasing greenhouse gases. So for example, the first one is by increasing the amount of time that the methane can last in the atmosphere. And this is because methane's main sink in the atmosphere is by reacting with the hydroxyl radical. So now you have more hydrogen in the atmosphere so you have more hydroxyl that's reacting with the hydrogen so you have less hydroxyl that's available to react with the methane so the methane can warm the climate for a longer period of time. Secondly, the production of atomic hydrogen through this chemical reaction eventually leads to the formation of ground level ozone through a chain of different chemical reactions that's triggered by the presence now of atomic hydrogen. Now ground level ozone is an air quality problem but it also is a potent short-lived greenhouse gas. And finally, when this reaction occurs in the stratosphere, the upper level of the atmosphere, that additional water vapor plays a meaningful role in trapping heat in the climate. And so it's these three different influences on the climate that make hydrogen an indirect greenhouse gas and its ability to influence the climate by influencing other greenhouse gases. So if we take a look at the state of the science for all of this, in terms of hydrogen's warming effects, it's actually fairly established. The scientific community has been emerging on a consensus of where we are in terms of how potent we think hydrogen is as an indirect greenhouse gas but in terms of how much hydrogen is emitted into the atmosphere, we don't know. Now hydrogen systems right now, it's a very niche market. We don't emit a lot of hydrogen into the atmosphere. We don't think the hydrogen that we are emitting today is a problem for the climate. We're talking really here about a future problem as we scale up hydrogen systems and potentially leak emissions all over the place in the same way that we've seen with the natural gas system. So looking a little bit more into detail about this emerging consensus of hydrogen's warming effects. We've known the basic chemistry since the 1970s. We've been studying the warming effect since the early 2000s. In the past few years, there's really been a ramp up of interest in different scientific institutions across the world in terms of better understanding hydrogen's warming effects. So you'll see a lot of papers that have come out in recent years. And the latest science suggests that hydrogen's potency is around 40 times more powerful at trapping heat than CO2 is over a 20-year period. So this would be a global warming potential with a 20-year time horizon comparable to the 80 times number that David communicated for methane, for example. So it's not as potent as methane, but it's still far more potent than CO2. Now, because hydrogen itself is short-lived and it is influencing greenhouse gases that are short-lived like methane, we have the same accounting issue with the GWP metrics that we have with methane that David mentioned in terms of 100-year time horizon just doesn't make sense for these short-lived climate pollutants that are only influencing the climate for a few decades of time. What you're doing in the math is you are counting for decades of time where these pollutants are no longer influencing the climate, but you're including them in the calculation. And that's the problem. And I'm happy to go into a lot more detail about that inside conversations afterwards. So in terms of how much hydrogen is emitted into the atmosphere, well, we do know it's the tiniest molecule in existence. You actually could fit 500,000 hydrogen molecules side by side in the width of a single strand of human hair is that tiny. So you can just imagine how hard it is to contain. And it's been reported to be intentionally emitted through routine operations like venting and purging systems, but also unintentionally emitted throughout the entire value chain from all aspects of infrastructure, especially when it's in its liquefied form where it can easily evaporate. Now we have no empirical data on how much hydrogen overall is being emitted. We only monitor hydrogen emissions right now primarily in confined spaces and for safety concerns. So we really don't know how much hydrogen is emitted. There are emissions estimates out there based on all sorts of different assumptions and proxy methodologies and theory and modeling. They show a large range of anywhere between one to 20% of the hydrogen could be lost. Comparing to we were talking about methane loss rates of around one to 3.5%, this is a much larger range. If we are to better understand how much hydrogen is emitted, well then we need new sensor technologies. The sensor technologies we have today are not sufficient for monitoring site level emissions and also detecting small emissions. We saw the same challenge with methane emissions from natural gas systems over 10 years ago. We vastly built up those sensor technologies to be able to understand all of the emissions coming from the natural gas systems. We are at a place right now with hydrogen where we are starting from where we were there around 10 years ago. So I have a lot of reason to believe we'll get there but we're not there yet. So how serious of an issue this is depends on the warming potency of hydrogen but also how much hydrogen we're emitting. So my colleague and I put out a study last year where we looked at a very high level case study of what happens if we were to replace a set of fossil fuel technologies, mostly in industry and transport, with their hydrogen counterparts for both blue and green hydrogen. And we looked at what the climate impacts would have been for the CO2 emissions from the fossil fuels versus what's going to happen for different ranges of emissions for both methane and hydrogen depending on if it's blue or green hydrogen. What we use which is kind of a standard number for how much CO2 emissions you could avoid from deploying one kilogram of hydrogen is around 11 kilograms. And so then we looked at different emissions ranges for the methane and the hydrogen, very similar low to high estimate as David presented with one to 3% emission rate. It can be higher than 3%. And in terms of hydrogen, we looked at one to 10%. And I just told you it could be as high as 20% but this is kind of total emissions overall. So we're hoping that it's not 20% in total and that's just per some components here and there. And this is a range that is used regularly in the published literature. So here are the results for comparing the climate impacts over time from the fossil fuels to the hydrogen systems. So let me walk you through what you're looking at here. So on the X axis, you're looking at two different timeframes. We talked about this with David how the near term really matters and how we do the math tends to be just in this long-term 100 year timeframe. But for these short-lived, short-term forcers they pack a big punch in the early years. And so that's, we need to take into consideration all time scales when we're looking at the impacts of our actions. So the blue bars here, unsurprisingly the blue hydrogen, the main difference between the blue and the green bars are just including the methane emissions. And you could see when we have worst case leak rates which is the high end of the bars then we have a lot more climate impacts and the methane emissions can play a major role in not only offsetting any of the avoided CO2 emissions and those benefits, but potentially even making the climate worse in the near term if emissions of both hydrogen and methane are high. So if we are, I'm just trying to figure out which one makes sense for me to look at and show you guys. I don't know if I have a, does it work? Not really. So basically, if you're looking at this black line up here this is just showing you that you would have the same climate impact between the two of you. I guess that wasn't effective enough. Okay, so if you look at the top line for the same impact that means that your hydrogen systems would have the same warming impact over that time period as the fossil fuel systems that you're replacing. And so what you could see here is that the blue hydrogen when the emissions get high enough can breach that line. The closer we are to that bottom line, the zero impact, my Vanna White. That's the better off we are for the climate. That's the near climate neutral that we all want to see. And so you could see for even blue hydrogen in the near term even if we have our best case leak rates for methane and hydrogen, we're still nowhere near climate neutral. Green hydrogen, we can get there if we minimize our emissions, but the concern here is that the more hydrogen we emit into the atmosphere, we are cutting into those benefits that we anticipate we're gonna get. And as David said, cutting your impact in half is not good enough. That's not what we want. We want to get rid of all the impacts. So this is making the case for why we really need to minimize those hydrogen emissions. And so I will wrap up with some strategies to do that. So the first is we really need to trigger more sensor development in the space. We really need more technologies that are able to measure the emissions of the levels we're talking about. Happy to reports that we've been working with the company Aerodyne to develop the first ever sensor that's able to do this. We tested that instrument in Colorado in January. It performed really well. They're now making two instruments for us that this fall we're hoping to get out there into the field with different companies and start actually measuring emissions for the first time. Because the next thing we need to do is measure emissions. And so we need support for, we need not just financial support, but company support in terms of actually letting us come into their facilities and work with them to understand the emissions from these systems. Then once we start getting a handle on how much we're emitting, we can figure out how to minimize these emissions. We can identify leakage mitigation measures. We can find alternatives for venting and purging and figure out what are the best practices that we wanna promote when we're scaling up. I will say there's a lot of this that we can do now before we even know where the emissions are coming from. There are things that we've learned from natural gas systems, for example. There's just engineering strategies that are known if hydrogen is a problem in the atmosphere, we don't need to vent it. A lot of the venting has happened because people thought it was benign. So there's a lot of things that we can do right now. And then once we have the technologies, we can also build up robust monitoring, reporting and verification programs, leak detection and repair programs just like we can with natural gas right now. But even before we have those commercially available sensor technologies to do this, we can still start putting plans in place to incorporate those programs when the technology is available. And finally is this LCA issue, which is coming back to what both my panelists, Rachel and David have spoken about already, which is just this accounting, this greenhouse gas accounting and the greenhouse gas intensity of hydrogen production. Hydrogen emissions is not included at all. So first we need it to be included and it's not just a production issue, it's something that influences the climate throughout the entire value chain. But then we also need to make sure that we are not just looking at this through a 100 year time horizon lens, which is the way that almost all life cycle assessment models operate. We need to look at climate impacts over all time scales. So I'll stop there, I have no idea how long. Okay, no idea. But thank you so much for your time and there's my contact and I'm more than happy to continue the conversation. Thank you all. Molly would not have let you go over. There's just no risk of that. And you gotta love the teamwork, the two EDF. Of course, when you say someone's your Vanna, that means you're the pat. So I just, you know, think things through, right? I'm okay with it. That show has been around for a long time and they're still going, kind of amazing. Our fourth panelist, Morgan is at the end of our panel. She's not just here to point things out on the screen. She's a panelist in her own right and she's our fourth panelist of the day. Morgan is a director of US Climate at the Environmental Defense Fund where she oversees research and economic analysis to shape and advance EDF's federal climate policy priorities. Morgan joined EDF after nearly a decade with Economic Policy Consultancy, Keybridge, LLC. Her areas of focus include carbon pricing, clean energy innovation, quantifying the benefits of climate action and supporting a just workforce and community transition. Morgan, welcome to the panel today or the briefing today and I'll advance your slide and looking forward to your presentation. All right, so I am here to summarize. This was just an hour of really great information and a lot of in-depth science. And I wanna make sure that we sort of summarize what the main policy implications are and tie it back into what's happening right now on the Hill and in the administration. So the first thing I wanna say is just our stance on hydrogen is that it is a really exciting energy solution to decarbonize hard to abate applications that we haven't had solutions for to date. So hydrogen is a really exciting thing but not all hydrogen is the same. It's created over a range of production pathways and it can be used for a range of things. And so we need to pay attention to how it is produced and used in order to actually maximize the benefits. Particularly given the scale of the taxpayer resources that have been dedicated to hydrogen, this is really, really important that we're all sort of paying attention to the details. So as Dan mentioned in the beginning, there's three major policy opportunities at play right now for hydrogen, which are relevant to this discussion. The first one, Rachel gave a great overview of the hydrogen production tax credit, 45V, offering up to $3 a kilogram, but again, the exact dollar amount depends on how clean your hydrogen is. Treasury's currently drafting guidance on this and trying to establish how that calculation is made and the details here matter tremendously as Rachel discussed. On hydrogen hubs, this is the second major sort of policy area. Hydrogen hubs was passed in the bipartisan infrastructure law last year and it provides $8 billion of funding for up between six to 10 regional hydrogen hubs. More than 30 companies or organizations have submitted applications for this funding and six to 10 hubs will be selected later this fall. That'll kick off like four years of negotiations, permitting, planning, et cetera, before construction actually begins around 2028. So we have some time to get it right. The other thing I wanna note with the hydrogen hubs is it's a really exciting opportunity to demonstrate hydrogen technology in different settings and different applications, but it's also an opportunity for us to demonstrate the real world benefits that hydrogen can provide communities and how to avoid harming communities and sort of furthering harms that have already been imposed on disadvantaged communities. So effective community engagement for these hubs is gonna be absolutely critical to their success. The third one is RD&D, Research Development and Demonstration. So DOE has several RD&D efforts underway to accelerate clean energy and clean hydrogen breakthroughs. One of those is the EarthShots program which is logos listed here. And that's designed to bring down production costs of hydrogen to $1 per kilogram over one decade. It's a really ambitious EarthShot. DOE is actually hosting its annual Merit Review Conference next week where different recipients of DOE funding will be presenting the status of their technologies and their breakthroughs if you wanna learn more about what's being funded right now. And there's also been several bills proposed in Congress to accelerate RD&D for hydrogen, particularly within some hard to decarbonize applications. So each of those, each of the climate risks and the issues that we've talked about today tie into those three different policy opportunities. And I sort of wanna summarize the recommendations that organizations like ours have. The first one is on renewable electricity accounting. So as Rachel noted, if we do the 45 V tax credit wrong, if we don't have rigorous guardrails in place, it has the potential to actually far increase overall grid emissions by hundreds of millions of tons of CO2. And that's for two reasons because the grid today is not currently clean and because hydrogen is an energy intensive product. So there's three different ways to prevent this from happening. Three different pillars to incorporate into the PTC. One is through new clean supply or additionality. We need to ensure that when a hydrogen project is procuring clean energy, that it's actually new. If it's not new, if it's just detracting from the existing grid supply, the grid will respond by ramping up the production of its cheapest marginal resource, which is natural gas or coal in some cases. So that is something that we don't want to happen. So it needs to be a new supply of clean energy. And secondly, she mentioned deliverability. This is the idea of having the clean energy that you're procuring be in the same place that you'll be using the resources to produce hydrogen. And then thirdly, hourly matching is critically important. And this is because if you're running your electrolyzer at nighttime, which a lot of operators do run it all day, then you're not using solar, which is only available during the day, right? When the sun's shining. So you need to be procuring electricity at the hours that you're actually using it to ensure that you're minimizing the impact on the grid. The second thing we talked about was methane emissions. And David showed just how impactful methane is. This is for a couple of reasons. The carbon capture technology that captures CO2 can't capture the fugitive methane emissions. And there's a huge range, like a lot of upstream methane emissions that are taking place right now between one and 9%. He also, and Alyssa elaborated on the fact that our current way of accounting for methane really underestimates its impact because it's using a 100 year timeframe when methane has an even larger impact over the first 20 years. So there's three different things that we can do to account for this. The first is in the hydrogen production tax credit, there's a need for more accurate nationwide estimates of methane leakage. The number being used right now is 1%. You heard David say that's the bare minimum of this range of emissions, which can go as high as 9%. So we need the default value to be much more realistic. We also need to move towards operator in base and specific estimates so that you're accounting for actually what you are, the amount of emissions that you're procuring. And doing this incentivizes people to actually lower their emissions and find cleaner ways to produce the hydrogen. Lastly, we need rigorous reporting and verification practices. David mentioned the importance of transparency and actually demonstrating what you are using and how clean that is. And so the hubs program actually provides a really interesting opportunity to demonstrate new reporting and verification practices in specific regions and sort of build out that whole economy. And lastly, we talked about hydrogen emissions and the importance of not subsidizing fugitive or intended hydrogen emissions. The most worrisome, Alyssa talked about the fact that sometimes they can leak unintentionally and sometimes it's just produced intentionally. There's a really worrisome practice that we've heard about from producers that are just flaring extra hydrogen. If they don't have sufficient storage in place, they're releasing 5% or 10% just up into the atmosphere, assuming that it has no impact. And they're planning to claim the tax credit for that gas, which is clearly not what was intended by you all and your bosses when you pass the IRA, when you said it needs to be used or sold. So there's a big need for Treasury to clarify that the hydrogen that is intentionally purged, vented or flared should not be eligible to receive the credit. And there's a need for companies to start to develop plans for more robust hydrogen emissions mitigation so that they're also starting to take into account the risk of unintended emissions as well. Melissa mentioned there's a range of best practices that can be taken up right now. We have a fact sheet available on EESI's website that lists several of these operational practices. Many of them are like no cost ways to minimize the risk of emissions. And then companies should be adopting the best available sensor technology. Right now there's sensors that can detect large hydrogen emissions that are relevant for safety risks. And as the more high precise technology becomes available, those should be adopted as well. This is also really important for the hubs receiving funding. That this is an opportunity, the hubs are an opportunity to demonstrate the best, like the most exciting best ways to use hydrogen. And so we should be making sure that we're managing our emissions, all of our greenhouse gas emissions during that process. And then lastly, there's a need for more research. There's a need for more DOE funding for high precision sensors to keep advancing that technology. And there's a need for more research like a National Academies of Science report on leakage rates and how much is this gas actually leaking at different stages of the pipeline so that policymakers and companies can make better decisions about how they produce and use their gas. So taking all of these greenhouse gases that we talked about into account at the outset is really, really important and we have the opportunity to get it right before we build out hundreds of billions of dollars of infrastructure. We want to minimize the amount of retrofits that have to happen down the line. We want to make sure that we're getting the best return on taxpayer resources that we can and that we're maximizing the climate benefits that hydrogen can provide. So if you'd like to learn more about any of these topics that we've talked about, I've put our email addresses up there. It will also be around after the Q&A to talk to you more. Thank you, Morgan. That was great. And speaking of Q&A, it's that time and we're doing great on time. So we'll have lots of time for Q&A. The way this is gonna go is if people have online questions, they're gonna come up to me. But I have a few sort of canned questions but I already see hands being raised in the audience. So I'll call on you in the order that I see you. And Tyler, are you gonna leave without saying goodbye? Okay, nice to see you today. Good luck. Former intern, ESI intern, Tyler. Always great to see it. I will repeat your question into the mic because we don't have a roving mic today in that way our live cat. Oh, we do. So that means Isabella is gonna come over to you and you can ask your question into the microphone. We'll start with you and then we'll come up here in the front. Thanks very much for the presentation today, Rachel. I think this question is mostly directed to you. David Roberts does a lot of the explanation of clean energy for me. And he's got an article from a year and a half ago now asking whether 24-7 clean energy is actually the best target. And this is my question as it relates to the guardrails around the hydrogen PTC. Why 24-7 clean electricity for that project rather than targeting those clean energy investments towards the dirtiest grids to achieve the most carbon emissions reductions. And the pros and cons between both of those. Excellent question. It's a very technical answer which I'll try to boil down as much as possible and happy to speak with you afterwards. So for folks who don't know 24-7, this is a heated debate within the clean energy of kind of corporate renewable market. So the Googles, Microsoft and so on that want to decarbonize their operations. And there's a civil war between the folks who are pro 24-7 which is this notion that Google endorses that I want to match my operations at my data centers on an hourly basis with renewable energy. So for every hour I operate there needs to be some wind or solar facility operating at the same time. You have the other clan of quote unquote emissionality which is an awful name I think. For folks who say, no, no, this doesn't make any sense. This is too costly. We'll just take our operations. Let's say I'm Microsoft and I have a data center that uses 100 megawatt hours of dirty electricity. I'll just calculate where I can support a new wind or solar project anywhere in the country that will abate or displace the same amount of emissions I'm generating with my 100 megawatt hour. So it's much more focused on emissions than this notion of I want to match my clean energy with clean energy as a proxy for emissions. First thing I want to say, huge difference between 24-7 and hourly matching. It's the same concept, but electrolyzers don't need to run 100% of the time like a data center, right? Data center has a much bigger challenge to maybe meet its operations with renewables 24-7. Electrolyzers who produce hydrogen don't need to run this much. They can run somewhere between 70% or so and 75 or 80 and be in the money and be okay. So first of all, it's a far easier challenge, I want to say, to have hourly matching for in the context of hydrogen production. We've looked into the other piece of emissionality. Would it be better for a hydrogen project to follow the same logic as a Microsoft data center? I'll be drawing X million metric tons of, or producing X million metric tons of emissions per year. Can I just invest in some project in a country that will abate those? What we're finding is this is ineffective because this project, this winter solar project that will be built to reduce those emissions, those hydrogen emissions or displace emissions equivalent to the hydrogen projects emissions, those would probably have been built anyway because they're the lowest cost winter solar projects that the Microsoft data center will be contracting for. So I'm not adding anything to the grid. They would have been built anyway. They're very low cost. I'm just claiming them for me, right? Happy to get into more details with you, but we're finding it's ineffective at ensuring truly true emissions abatement in the context of hydrogen and hourly matching is far more certain for developers who are looking to finance their projects and don't want to rely on future grid emissions, projections and so on. It's really uncertain for financing. It provides more certainty and more emissions prevention certainty. Other panelists, anything you'd like to add to Rachel's response before we move on? All right, so we had a couple more. We'll go to you first and then I saw you in the next row and we'll just share the mic. Hi, I don't know if this is on. I had a quick question about hydrogen transportation. I know there has been conversation about repurposing already existing pipelines to transport hydrogen and the potential for leaks associated with that. I'm curious about your thoughts on that and sort of the status of research and development in that arena. Like Rachel, very technical, complicated answer that I will also try to boil down simply. So there's basically two, so there's different ways you could look at it. People are talking about blending hydrogen with natural gas and so let's start from looking at the natural gas system right now was built for a particular molecule or mixture of molecules which is 90% plus methane with a mixture of other things. Hydrogen is a very different molecule. It's more reactive and so there's a chemistry side of this where that hydrogen can react with the different types of metal that's used, for example, for this infrastructure. So that's a concern and then the other concern is that hydrogen, while it contains a lot more energy than natural gas per mass, per volume it doesn't and so because it's not very dense at all and so you have to push like three times more hydrogen through these pipelines to get the same energy output at the end. So there's a lot of questions with how much we can blend hydrogen with natural gas and it'd be safe for these systems and we wouldn't because the concerns aren't even just leakage, it's just cracking the pipes, for example. The hydrogen almost, it dissociates, it dissociates to the atomic hydrogen. So you have molecular hydrogen which is two hydrogen atoms bonded together, it can dissociate and they can basically, those hydrogen atoms can basically eat away at the steel and then end up fracturing it and so then, yes, you absolutely have more hydrogen emissions that can come from that but you also have a fractured pipe. There's evidence that right now we can maybe go up to 20% blends before we need to totally reconstruct the infrastructure. Even 20% blends is only reducing your greenhouse gas emissions by six to 7% because there's less energy for the 20% by volume, it would have a third of the energy as the natural gas does. So all this to say, there are certainly concerns, from a theory perspective, you would expect hydrogen to escape three times as fast as natural gas. There are very, very few experiments out there that try to figure this out. There's one that exists that looked at a low pressure pipe down from the meter, I don't know, I forget the terminology but basically found that hydrogen and natural gas leaked at the same rate. That has been used by industry a lot to say hydrogen wouldn't escape anymore than the methane would. The lead author of that study interned with us last fall, her study is just being widely misconstrued by industry. So if you hear that, that oh, we don't think it's gonna leak anymore, that was for one specific case and one situation where it was hard for the emissions to escape given that configuration of that setup for that experiment. So I've kind of lost track of your initial question, but there's a lot of challenges at play here and they're both chemical and physical when it comes to hydrogen, just being a different gas. So a lot of, if we wanna work towards pure hydrogen and not just these blends, there's a lot of retrofitting and just redesigning and all new pipes that we're gonna need and new end use devices too. Any other comments on the transportation issue? I would just agree with everything Alyssa said and just step back and say, it's not just a drop in. And so that idea, oh, we'll just take this infrastructure and convert it. Well, aside from all the problems that Alyssa mentioned, you can't just take the same compressor and run hydrogen, bad things will happen. So all of that has to be re-engineered to a greater or lesser extent. And so it's not a quick fix by any means and stepping back, I think there's a clear message I think that hydrogen is envisioned for certain difficult to decarbonize uses. And it's a little hard to see why one pipeline out there would make sense for that list of difficulties because the existing pipeline system has integrated into the whole economy. So that's just some sort of meta reasons to be sort of skeptical of that. And just quickly, one best practice would be making your hydrogen near where you use it, which sounds obvious, but there are plans to ship it and pipe it and truck it all over the place and you just increase the opportunities for it to escape. And also build renewables near all of that. Isabel, the next question, yet there we go. Thanks, this is also kind of a technical question. As we started off talking about hydrogen is not new. We've known about it for quite a while and the reason that it hasn't been adopted is because there are a lot of technological or just physical barriers to doing so. And I don't hear these really addressed very often. Specifically what I'm talking about is that hydrogen, the process, not the combustion of hydrogen but the process is very energy inefficient. You lose 80%, I believe, of the energy just making the hydrogen and getting it to where you need to be through the production, the transport and the cold storage that you get from combusting it. And so it's extremely inefficient. And we know that from wind and solar subsidies, subsidies typically don't drive innovation. They typically support existing industries but they don't create new, better capacity factors, if you will. So I'm curious, what's going on in the hydrogen industry beyond being subsidized? That's going to make it viable, basically. The reason it hasn't taken off is it's simply not viable because you lose so much energy in the process. So what is being done right now to actually make it cost effective and energy efficient? Thanks. Melissa, if you'd like to go first, please feel free. I can start with some of that. I certainly can't speak to the subsidies and all of that issue, but the energy intensity issue is something that is very much on our radar. We published a study last year about that where we were comparing how much energy it would require to do the same end task, but whether or not use direct electrification or green hydrogen, for example. And we found that you could power up to nine times more vehicles or heat up to 16 times more homes by using electricity directly versus using the electricity to make the hydrogen to then use the hydrogen. It's just you lose so much energy, it just doesn't make sense. And a lot of our conversations, the concern is that with some of these tax credits or subsidies, I'm terrible with the language, but you could almost end up producing hydrogen for free in the sense that you then wanna use it everywhere. Because one of the challenges with hydrogen, which is good and bad, is that it's very versatile. You can use it for all sorts of things. And you're right, we've been using hydrogen for different applications for over 200 years. We have learned how to convert hydrogen directly into electricity for 130 years. This is not new, but we have, in a lot of cases, better cleaner, cheaper, and more efficient alternatives. And so some of the work that we're doing is trying to just make that clear that it's not just fossil fuels versus hydrogen. So even though hydrogen has some problems, it's better than fossil fuels, it's no. There are a range of different clean options and you need to pick the best one for the job. And hydrogen, in many cases, is not the best for the job. Go for it. Well, I think, I mean, that's a really good question. And I'd say that point out that DOE does have several grant programs to sort of improve the technologies that exist today and improve their energy efficiency and the way hydrogen is moved and compressed and stored and all of that. So I do think grants offer, it's a different mechanism that does actually encourage innovation more than necessarily production tax credit would. But at the same time, like Alyssa mentioned, there are some uses for hydrogen that we don't have another alternative for. Hydrogen can be used as a reacting agent to produce steel instead of natural gas as the reacting agent. And so that's one use case, like steel production, chemicals production, where there is no other alternative. So even if it is like not the most energy efficient production process to make the hydrogen, it's the best option out there. And we don't have any other great ways to decarbonize steel, which is a huge contributor to greenhouse gas emissions. Clearly a question we're all interested in. Fully agree with everyone. I wanna push back that subsidies don't drive innovation. I think you're absolutely right. Grants do that very well. The 45-V credit, if designed well, will. It will essentially send a right market signal for the right assets, if you do it right. And by right assets, I mean assets that are intelligent on the grid. They're able to flexibly ramp up and down with the availability of renewables, which is a long-term service that hydrogen could provide, kind of really vary its operations well with a very variable renewable energy grid versus annual matching, which essentially is bulky and flexible projects, able to just buy very cheap wrecks on the system and have emissions accounting work out for them. Quickly other piece about, I fully share everything Alyssa and Morgan said about end uses. Another reason why this credit is so important, if we loosen the crank so much on the guidelines and makes it hypercheap to produce everywhere in the country, even if there are no renewables to support it, then you're gonna wanna use it everywhere. There's all these great applications still and so on, aren't yet fully commercial yet. The applications that are most ready in the next few years are the inefficient ones largely, like the blending piece, which is you're getting very little emissions abatement for your hydrogen buck. So if you have a glut of supply on the system all of a sudden with no sucking demand signal from the right side, right applications, it's gonna go to the inefficient pieces that you mentioned. So I do think the credit will have huge bearing on the market development. We're gonna, I wanna make sure we get to our other questions. So if it can be real quick. Well, I just wanna say that I like. Oh, can you use the microphone please? Just mostly in the processes side of things, like we've had solar PV cells for quite a while since the 60s, I believe. And even though they've been, they receive about 14 times the tax credits, that oil and natural gas get, the capacity factor, like the end use system has basically remained the same for about 60 years. And so that's kind of what I'm getting at. So let's make that quick. Not always effective, I agree. And the cost has dropped dramatically. You know, I think I would say that the innovation is gonna be there because we expect blue hydrogen to be one of the early movers here. But if the guidelines are developed correctly, that will require really cleaning up the upstream and doing it quickly. And that will require innovation and require just a ton of hard work. It's very affordable, but it has to be done. So I think that's a form of innovation that's very important. And fortunately, the credit in the law is designed. So it has to be very low in terms of upstream emissions, provided the accounting is done correctly. And we have one last question in the second row. Promise, do we get to ask it? Thank you. Hi, I'm Henry. Kind of follow up on the three pillars. You talked about additionality, deliverability, and then the hourly matching. It sounds, I don't know, from the way I kind of read it, that hourly matching economically really only works if the other two pillars are there. Of course, that's why three pillars. Because if there's no clean energy for the hydrolyzers to use, then they'll either go up in price because there's less supply or they'll start using dirty energy or both. How, what do you think where we are in terms of the feasibility of those two things? Especially as you think about across the country where green energy is few and far between and in some place there's a plethora of it. How do we find that consistency and where are we in terms of when will the system really work? Yeah. I think it's a good question. The good and the bad thing about hydrogen is you can produce it almost anywhere because it's not like oil and gas hyper-concentrated in areas where you actually have oil and gas as long as you have renewables, you can produce it, right? Today it's still expensive to produce it by electrolysis and the tax credits will completely change that and make it very, very cheap in many places in the US already. We think that based on today's market conditions, the three pillars will work out very well in many regions of the US where wind and solar are good. So for example, Texas, all the great planes but even kind of around those, they have wind and solar so hourly matching can work really well there because you can combine those together. They tend to have complementary profiles, solar in the day, wind throughout the day but also ramping up at night. So both together give a very nice, healthy kind of generation profile. So it will work out really well for those areas. Costs can come down quickly, electrolyzer costs are very expensive today. Will come down the more you deploy and then the market will open up to a lot of other places in the country that don't have great wind and solar today or have one or either. And that's what the tax credit is meant to do, right? You start where it's favorable, get cost down, the market opens up for the rest of the country. So we do think those areas kind of today, the Texas Great Plains we join and kind of away from that will be the first movers and then the market will open up fairly quickly, right? I mean, this is what should happen. This should happen to prevent emissions increases from hydrogen, right? If it doesn't spur increased renewables on the grid or clean energy, then it's drawing its power from dirty power and it's producing a lot of emissions. So, and this is where the additionality piece comes in and kind of how you send those market signals. If Treasury requires new, clean supply to meet hydrogen then this has to be met to be eligible for the credit. All right, thanks. David or Alyssa or Morgan, any other final words that you'd like to add there? Well, that brings us to the end of our briefing today and thanks to everybody for your great questions. Really, really appreciate that. Tremendous panelists today, Rachel, David, Alyssa and Morgan, thank you for joining us today and doing an amazing job. I'd also like to say another big thanks to Representative Kasten and his staff for helping us with the room today. I really, really appreciate that. And just, you know, Mondo thanks, biggest possible thanks to EDF for helping bring this panel together today and for helping us with the briefing. So very special thanks to our partners at EDF for all of their help. Today was a great briefing. We do lots of other briefings that are also great. I encourage everyone to sign up for our bi-weekly newsletter, Climate Change Solutions. You can do that by visiting us online. Comes out every other Tuesday. It's got announcements of events but also lots of other great resources including an all new implementation tracker that Molly's been working on to track IIJ and IRA programs as the agencies are rolling things out. Very special thanks to the ESI team. I'd like to thank Dan Oh, Omri, Allison, Anna, and Molly for all of the hard work pulling the briefing off today. I'd also like to thank Isabella and Parthov who are two great interns. Tyler was here earlier, former intern. So if you are looking for an internship or know somebody who is, we'll soon be announcing for the fall. Also like to say special thanks to Jeff, one of our fellows, the author of our really excellent sustainable aviation fuel fact sheet or issue brief actually. If you wanna learn more about sustainable aviation fuel is Jeff's your guy and that's a tremendous resource. One of our most popular resources as well. And of course we couldn't do it without Troy in the back of the room, our videographer who's gonna be taking off for some vacation coming up well deserved because he's been doing lots and lots of briefings with us. Speaking of lots and lots of briefings, we'll be back next Wednesday for forestry briefing in the afternoon. We'll be back two weeks after that for conservation and then we'll be back on July 18th for the expo. There's information on the front table where you registered or where you signed in about all of that. This slide is just a link to a survey. If you have two minutes and you'd be willing to share your feedback about today we really appreciate it. We read every response and we do our best to incorporate your ideas and feedback into our programming. So if you were on the livecast, if you had any audio issues or video issues please let us know. 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