Does Colorado need hydrogen for a carbon-free future?
HUDSON, Colo. (CN) — Bordered by river rockscapes and decorative wagon wheels, any house in the Box Elder Creek Ranch neighborhood could fill the pages of Home and Garden magazine.
Located in the town of Hudson thirty miles northeast of Denver, the community sits amid a rural landscape of cornfields, horse corrals and scripture-quoting billboards. Inside the development, playscapes tower over white farm fences. Residents fly flags pledging support for the nation, the U.S. Navy and their dogs.
It’s an unlikely scene for an energy revolution — and yet that’s just what’s playing out at Box Elder Creek Ranch.
In an April announcement, Xcel Energy, a national gas and electric company, chose this place as the first Colorado community to receive hydrogen blended into its natural gas lines. If successful, it will provide a blueprint for serving the fuel cocktail to more of Xcel’s 1.5 million gas customers statewide.
Over the next five years, the utility company hopes to demonstrate the safety of using hydrogen blends to cheaply lower carbon emissions without the need for completely new infrastructure. The developments come as officials eye hydrogen as a potentially cleaner power source for an increasingly warming planet — and as environmentalists raise the alarm about what they call a false solution to the climate crisis.
In August, Xcel submitted its Clean Heat Plan to the Colorado Public Utilities Commission. It outlined its plans and asked for a variance to raise rates to pay for upgrades, including for the $6.5 million hydrogen-blending pilot.
In testimony, Xcel estimated it would cost $20,000 per home to do a full electrification retrofit — adding up to a whopping $3.5 billion by 2030. A portfolio that includes hydrogen and recovered methane (also known as natural gas) would cost consumers much less, the company argued, at about $2,000 per home.
The energy industry already looms large throughout the American West, with oil-and-gas infrastructure, fracking walls and pumpjacks all frequent sights. Hudson is no exception: Just a few miles up the road in Keenesburg, Xcel operates a 580 megawatt natural-gas facility.
Infrastructure like this has long prompted debate over how to protect the environment (and people’s livelihoods) while still keeping the lights on. New investments in hydrogen power are changing the terms of the conversation, raising fresh questions about what it really means to build a “green” future.
As the debate unfolds, oil and gas remains king in places like Hudson. While Xcel has invested in building solar and wind farms, 27% of Colorado’s power still comes from coal and 31% from natural gas.
Among those opposed to the Box Elder Creek Ranch blending project is Brett Anton, a safe buildings organizer for the Sierra Club. In an interview, he disputed Xcel’s main financial argument for hydrogen, saying the company could fully electrify every house in the neighborhood for less than the cost of the pilot.
Anton worries hydrogen is being used to greenwash natural gas, allowing companies “to talk about natural gas as a clean future when that's absolutely untrue.” He isn’t alone in these concerns: Both the Sierra Club and Physicians for Social Responsibility have launched petitions asking local officials to block the project.
With only one atom, hydrogen is the simplest element in the known universe. Commercially produced as a biproduct in the petroleum refining process, it’s long been eyed as a clean fuel alternative.
Government grants and tax credits aimed at lowering the cost to produce hydrogen are sparking fresh interest in the technology. Still, environmental groups warn that not all hydrogen is created equally. While hydrogen can provide power without generating end-use atmosphere-warming carbon-dioxide, the full production line is neither free of risk nor pollution.
Hydrogen can be generated in different ways, with each method having a varying impact on the environment. “Grey” hydrogen is refined from natural gas, a process that currently produces 830 million tons of carbon dioxide per year. Ninety-five percent of hydrogen — including that used in Xcel’s proposed blending project — is produced this way.
When carbon from such projects is captured and sequestered underground, the final product becomes “blue” hydrogen. Only 1% of hydrogen producers currently use carbon capture. Besides scrutinizing the efficacy of current carbon capture technology, environmentalists question the benefit of sequestering carbon over just not producing it at all.
Hydrogen can also be separated from water through electrolysis, which, when powered by renewable wind and solar energy, earns the name “green” hydrogen. That’s on top of other, more obscure hydrogen colors like “pink” from nuclear-powered electrolysis and “brown” from coal.
One technical definition of “clean” hydrogen is embedded in the Inflation Reduction Act, passed in 2022, which provides tax credits to producers based on lifecycle carbon emissions. Still, environmental groups see big differences between these colors — and between hydrogen power and true renewable energy. Because it takes energy to make green hydrogen, many environmental groups would rather ramp up renewable solar and wind power for homes instead of expanding green hydrogen ventures.
“It’s really a scam to call this clean energy,” Silas Grant, a campaigner for the Center for Biological Diversity’s Climate Law Institute, said over the phone. Noting that hydrogen is “overwhelmingly made with fossil fuels,” Grant argues that leaning heavily on hydrogen to power the future will “perpetuate our reliance on oil and gas” and “put frontline communities at risk.”
Even among environmentalists, there’s differences of opinion on core questions like this. Some groups, including the Sierra Club, support building up green hydrogen to reach hard to decarbonize industries like steel-production and long-haul trucking.
Others oppose it in general, viewing it as a Trojan horse for more dirty fuels. In August, the Center for Biological Diversity submitted a letter to the Department of Energy signed by more than 100 local advocacy groups, urging federal officials to reject all applications for hydrogen hub grants and instead fund solar and wind. It cautioned them against believing the “hydrogen hype.”
In recent years, as fracking operations encroach further into the suburbs, Colorado lawmakers rewrote the rules governing oil and gas to better account for public health and environmental risks. As public approval of the industry hits record lows, it remains to be seen if Coloradoans will accept new and ostensibly greener energy from the usual suspects.
Perhaps unsurprisingly, industry groups remain optimistic. They say hydrogen promises a greener future and should be embraced regardless of its color.
The American Petroleum Institute, an oil-and-gas industry trade group, lists hydrogen production as a top priority under its climate change pivot plan.
“We generally don't try to talk about blue versus green or any of that, because our members are interested in all of it,” Rachel Fox, an API policy advisor, said in an interview. She said API members are “big supporters of all of the above energy solutions” as long as they reduce carbon impact. And since Colorado is already producing grey hydrogen, she argues "the biggest early adopting opportunities” lie with tools like carbon capture.
If financial opportunity is the carrot driving hydrogen expansion, government decarbonization deadlines are the stick. Using 2005 levels as a baseline, Colorado has committed to cut greenhouse gas emissions 26% by 2025 and 90% by 2050.
Governor Jared Polis, a Democrat, wants to push the Centennial State to source 100% renewable energy by 2040. To this end, he signed the Advance the Use of Clean Hydrogen Act into law this year, directing the Public Utilities Commission to create rules guiding the industry to produce “clean” hydrogen with limited carbon dioxide.
Last year, Colorado also banded together with three oil-and-gas-producing neighbors — New Mexico, Utah and Wyoming — to form WISHH, the Western Inter-State Hydrogen Hub. The group submitted a proposal to the U.S. Department of Energy asking for a $1.5 billion grant to ramp up hydrogen production.
A concept paper envisions harvesting hydrogen from biomass in Utah, electrolysis in Colorado and industrial processes in Wyoming. The proposed funding could allow Wyoming to scale blue hydrogen production and pipe it south to power Colorado's Front Range and west to fuel long-haul trucks in Utah.
The Department of Energy sees such hubs as a vital part of the nation’s renewable-energy portfolio and is expected to announce $7 billion in grants for them later this year. Anja Richmond, program director for WISHH, said the inter-state compact looks to support both blue and green hydrogen because “the problem we're trying to address is greenhouse gas emissions and carbon intensity.”
“We are energy producers, and we look at all forms of energy,” Richmond added. “As long as we're addressing the problem — how do we deliver low-carbon-intensity hydrogen — then the source becomes secondary.”
Frank Wolak, president of the Washington, D.C.-based Fuel Cell and Hydrogen Energy Association, commended the feds for recognizing what he sees as a national need for a diverse energy profile that includes the humble element. He’s been interested in developing alternative energy sources since 1973, when he found himself waiting in line for gas while he was in high school.
That year, U.S. involvement in the Arab-Israeli War prompted members of the Organization of Petroleum Exporting Countries (OPEC) to cut off oil exports, shocking the U.S. economy that relied on them. This defining moment in history sparked an interest in energy conservation and domestic energy production and inspired a generation to search for better fuels.
It was a defining moment in Wolak’s life, too. “I always knew that I wanted to be involved in activities that were increasing energy efficiency and making the world a better place,” he said. He spent his career looking for ways “to be more efficient, use less energy, treat the planet kindly, and still operate in the civilized, highly industrialized world we're in.”
Still, Wolak is a pragmatist. He acknowledges that hydrogen isn’t a one-size-fits-all solution to the ongoing climate crisis. “Like with any innovation,” he said, there’s “natural limits of practicality.”