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Nebraska, two partner states bid to be ‘hydrogen hub’ that could bring $1 billion in federal funds
Monolith Materials says its plant south of Lincoln is the largest facility of its kind in the world in producing clean hydrogen from natural gas. (Courtesy of Monolith Materials)
LINCOLN — A Nebraska lawmaker is seeking to muscle up the state’s bid to become a “hydrogen hub” — a designation that could bring more than $1 billion in federal dollars to the area to help produce, store and use clean energy.
Sen. Bruce Bostelman of Brainard said that Nebraska, in partnership with Iowa and Missouri, was among 33 of 79 applicants encouraged by the federal government to move to the next stage of the selection process.
He is now asking lawmakers, via Legislative Bill 565, to allocate $500,000 for engineering and other work necessary to help manage the hub and lay the foundation for even more federal funding.
Six to 10 regional hubs are to be named, perhaps by year’s end, said an official involved in the process.
“Nebraska has a tremendous opportunity to lead in the growing hydrogen economy — benefiting Nebraskans by creating new products and markets for our ag industry, providing high quality jobs, including in rural communities, and solidifying access to fertilizer as necessary for Nebraska and our region,” Bostelman said.
Bostelman, the chairman of the Natural Resources Committee, introduced the hydrogen hub proposal, which was later amended and named a committee priority. The Legislature did not act on the proposal before it adjourned for the weekend on Thursday, and is to take up the discussion next week.
LB 565 is an extension of sorts to legislation last year that created the state’s “hydrogen hub working group,” a team charged with applying for the designation. About $8 billion has been set aside, from the federal Infrastructure and Jobs Act, for the so-called H2Hubs program. It is aimed at linking producers with industrial users to expand the use of hydrogen to generate power or fuel planes, trains and tractors.
The local working group includes representatives of companies including Monolith Materials, Werner Trucking, Union Pacific, Nebraska Farm Bureau, Tallgrass Energy and the Nebraska Public Power District.
Courtney Dentlinger of NPPD described the hub as not one physical site, but rather a region — in Nebraska’s case, a three-state region — that would receive up to $1.25 billion from the federal government to accelerate the use of hydrogen as a clean energy.
She said the Nebraska-Iowa-Missouri team is known as the Midcontinent Clean Energy Hydrogen Hub, or MCH2. Their application has identified a half-dozen projects or companies that would, if the bid is successful, receive a chunk of the funds, which require a 50% financial match.
Nebraska has a tremendous opportunity to lead in the growing hydrogen economy. – Nebraska State Sen. Bruce Bostelman
Among those companies is Monolith in Hallam, Nebraska. Monolith has said it plans to use most of its hydrogen to produce anhydrous ammonia fertilizer. Officials said it is to become the state’s largest user of electricity.
Dentlinger said there is potential for regional hydrogen hubs to get future federal funding beyond the first phase of money.
With President Joe Biden’s goal of a net-zero carbon economy by 2050, the hubs are seen as playing a key role in climate change goals. Nebraska state senators also see the program as promoting economic development.
Bostelman said Nebraska businesses and producers could further diversify their product offerings with hydrogen-enhanced biofuels.
“It helps create better and more secure access to fertilizer necessary to continue being a leader in global ag production,” Bostelman said. “And it creates an opportunity for our transportation industries and electric-generating utilities to further diversify their fuel sources.”
‘Design-build’ contracting sought
LINCOLN — A few other legislative proposals have been rolled into the Legislative Bill 565 package, and Thursday’s discussion centered on one that’s related to the Perkins County Canal.
That measure, originally LB 723, would create the Public Water and Natural Resources Project Contract Act. State Sen. Bruce Bostelman said it essentially would enable the Department of Natural Resources to use an alternative method of contracting for water-related projects.
He said other state departments, including Transportation, currently use the method he said was more cost-efficient.
Saying that “time is money,” State Sen. Mike Jacobsen of North Platte said he supports the move toward “design-build” contracting, where the state works, early on, with a single contractor on design and development services.
State Sen. John Cavanaugh of Omaha noted that a key motivation behind the proposal is to make construction of the proposed Perkins County Canal more cost-efficient.
He said his support should not be mistaken as an endorsement of the canal — he said he remains skeptical. But if the project ultimately was built, Cavanaugh said, the alternate contracting method is expected to result in a faster and less expensive build.
The Legislature last year authorized planning of the controversial canal, which would divert water from the South Platte River in Colorado to storage reservoirs in Nebraska. The water would be used to enhance flows in the Platte River through Nebraska or for irrigation.
Some officials have said the $500 million-plus canal is the only way Nebraska can claim flows it was granted in a century-old compact with Colorado over rights to water from the South Platte.
The Legislature is to resume discussion next week.
— By Nebraska Examiner Senior Reporter Cindy Gonzalez
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