A Hydrogen Hub in Utah Could Power LA’s Climate Future. Now Chevron Wants in, LA Times

A hydrogen hub in Utah could power LA’s climate future. Now Chevron wants in.

The sky was overcast, the ground was covered in snow, and the air was bitterly cold as our helicopter descended toward the giant gray smokestack jutting up from the otherwise flat expanse of Utah’s Sevier Desert. The copter carried me, photographer Luis Sinco and several employees of the Los Angeles Department of Water and Power. They would be giving us a tour of the city’s single largest electricity source: Intermountain Power Plant, which burns lots and lots of coal.

Things have changed in the two and a half years since that tour.

L.A. officials and their Utah counterparts had planned to close the coal plant by 2025 and replace it with a new facility that burns natural gas, another planet-warming fossil fuel. But after I wrote about that proposal — and it was slammed by climate activists — they changed course. They said the gas plant would still be built, but its initial fuel mix would consist of 30% green hydrogen and 70% natural gas, eventually shifting to 100% hydrogen — eliminating all heat-trapping emissions.

Nothing like that has ever been done before. If all goes as planned, it will be a game-changer for the climate.

Now I’ve got another update. Chevron Corp. — one of the world’s largest oil and gas companies, headquartered in California — says it plans to invest in a related project critical to making L.A.’s hydrogen dreams a reality.

The project is called Advanced Clean Energy Storage, and it would involve pumping hydrogen into naturally occurring underground salt domes that happen to be located across the street from the coal plant — a happy coincidence, as I explained in a 2019 story. Salt domes are common on the Gulf Coast, but extremely rare out West. The project’s developer was initially focused on a different type of energy storage known as compressed air, but hydrogen has since emerged as the big-ticket item.

What makes hydrogen so attractive? It can be produced by simple electrolysis, using solar or wind power to split water molecules into hydrogen and oxygen. And it can be banked for long periods of time before being burned, essentially allowing sunlight and wind to be “stored” for times of year when those renewable power sources are not so abundant.

The Intermountain storage project is a joint venture between Japanese conglomerate Mitsubishi Heavy Industries and Utah-based Magnum Development, which owns the underground salt domes. Paul Browning, president of the Mitsubishi subsidiary involved with the project, told me the companies would use renewable electricity to produce hydrogen on sunny, wind days, then convert the fuel back to electricity “when it has its highest value to the grid.”

Paul Browning, president of the Mitsubishi subsidiary.

Sometimes that’s moving power from the middle of the afternoon to the early evening.

“But sometimes that’s moving power from April to October. That’s where hydrogen really has an advantage.”

Enter Chevron: The oil giant said last week it had “agreed on a framework to acquire an equity interest in” the Mitsubishi/Magnum joint venture. Chevron declined my interview request, but clearly the company brings deep pockets to the project. While Browning wouldn’t give me an overall price tag, the joint venture hopes to win a $595-million loan guarantee from the federal Department of Energy, and Browning suggested that wouldn’t cover the entire cost. So it definitely won’t be cheap.

But is Chevron serious about accelerating the clean energy transition? Or is its investment in hydrogen a delaying tactic, a way to claim it’s taking action on climate change while continuing to focus most of its energies on oil and gas?

Climate activists are skeptical. Chevron said this week it would spend $10 billion through 2028 on projects that reduce climate pollution, a tripling of its low-carbon investments. But the activist shareholder group Follow This — which recently persuaded 61% of Chevron shareholders to support a resolution calling for the California company to slash emissions from the use of its products — pointed out that Chevron would likely spend 10 times that amount overall in the coming years.

“A company that continues to spend up to 90% of their investment capital on fossil fuels cannot claim to be part of the energy transition to confront the climate crisis,” the group said in a press release.

Environmentalists also worry about oil and gas companies exploiting the promise of hydrogen to kill climate policies that could reduce pollution much more quickly. The nonprofit law firm Earthjustice cited several examples in a report last month, such as Southern California Gas arguing that cities shouldn’t require new buildings to have all-electric space and water heating, in part because hydrogen might someday be able to fully replace natural gas.

The report’s coauthors, Sara Gersen and Sasan Saadat, told me hydrogen could be crucial for ditching fossil fuels in so-called “hard to electrify” parts of the economy, such as heavy industry, aviation and shipping.

But they don’t want to see it used as an excuse to block policies that would cut oil demand by requiring the rapid rollout of electric cars, or cut natural gas demand in homes and businesses by promoting the use of electric heat pumps.

Sara Gersen.

This is a larger movement in the fossil fuel industry, going from denying the fact of climate change to just delaying climate action.

The Earthjustice report also notes that fossil fuels are used to produce nearly all the hydrogen in use today, unlike the “green” hydrogen that Mitsubishi and Magnum plan to produce in Utah. The report criticizes the oil and gas industry for pushing policies “that would increase hydrogen production from renewables and fossil fuels alike” and trying to obscure the difference.

But what about L.A.’s vision of shifting from coal to gas to hydrogen at its power plant outside Delta, Utah? Will that plan be a multibillion-dollar climate boondoggle, or a model for other cities and countries to follow?

It’s a unique beast, and hard to judge because nothing similar at this scale is being attempted elsewhere. Intermountain Power Plant provided 16% of the city’s electricity last year, so LADWP can’t just shut off the gas plant if hydrogen doesn’t work out — it needs that power. On the other hand, if everything does work out, there’s so much space to build underground salt caverns that Mitsubishi and Magnum could create a hydrogen hub serving customers all over the Western United States.

Browning is confident the technology won’t be an obstacle. He said Mitsubishi already makes a gas turbine that can handle a 30% hydrogen mix, and expects to have a turbine capable of burning 100% hydrogen much sooner than 2045 — possibly this decade.

“This is going to be the largest energy storage project on the planet,” he said.

And as for Chevron? Spokesperson Tyler Kruzich told me in an email that the company “has the people, partnerships, engineering and project management expertise” to provide “the affordable, reliable and ever-cleaner energy that California needs.” He said the firm’s proposed partnership with Mitsubishi and Magnum “will be critical to delivering green hydrogen as a transportation fuel to California and other markets in the Western U.S.”

I also asked Kruzich about Assembly Bill 1395, aka the California Climate Crisis Act, which would require the state to cut emissions 90% below 1990 levels by 2045. It failed to pass this month after facing opposition from groups including the Western States Petroleum Assn., which counts Chevron as a member. Chevron lobbied on the bill, according to disclosure forms it filed.

Kruzich declined to discuss the company’s position, saying Chevron “engages with state lawmakers on a variety of proposed legislation and regulation, seeking to balance policy objectives with the need for affordable, reliable energy.”

I hope to return to Intermountain Power Plant before too long, ideally during warmer weather. Maybe by then, it will be a mecca for government officials, utility executives and clean energy entrepreneurs across the American West, all hoping Chevron and partners will sell them the world’s lightest molecule.

Or maybe it’ll still be a hulking coal plant in search of a better future. Only time will tell.

READ the latest news shaping the hydrogen market at Hydrogen Central

Newsletter: A hydrogen hub in Utah could power L.A.’s climate future. Now Chevron wants in, September 16, 2021