The Biden Administration Should Learn Japan’s Painful Lessons On Hydrogen

Clean hydrogen has long been a promising but unrealized green energy source. A bipartisan infrastructure bill introduced last year suggests allocating 7 billion dollars to create clean hydrogen hubs.

The Department of Energy piled up loads of social engineering requirements on what is supposed to be the next energy revolution. This is what the DOE press release says the Hydrogen transition would do:

• Support meaningful community and labor engagement;
• Invest in America’s workforce;
• Advance diversity, equity, inclusion, and accessibility; and
• Contribute to the President’s goal that 40% of the overall benefits of certain federal investments flow to disadvantaged communities.

The Biden Administration, through the promotion of reliance on hydrogen, is hoping to buttress its climate agenda and put America on track to meet its 2035 climate goals. Earlier this year, an additional 797 million dollars was allocated to develop hydrogen infrastructure and expand the industry across the US. Of course, it comes with more social engineering. The press release says:

“Teams are also encouraged to include representation from diverse entities such as minority-serving institutions, labor unions, community colleges, and other entities connected through Opportunity Zones.”

It seems that everywhere, partly in desperation, Clean Hydrogen is turned into a pork dispensary.

If done right, clean hydrogen may become an attractive force multiplier for energy generation. It can often piggyback from other power generation methods and produce additional energy or fuel for very little sustained cost, although it does require considerable initial capital investment. It has near-zero emissions making it an attractive alternative to traditional fossil fuels. It is especially effective in situations where it can be used on-site or in a location close to its production facilities such as when industrial complexes have their own diversified power generation systems.

Hydrogen’s very strengths as an effective force multiplier reveal its limitations when utilized alone. Hydrogen’s energy content is low by volume, meaning storage requires low temperatures, high pressure, and lots of space. That drives up costs.

The alternative to hydrogen gas storage is either liquidation or solidification, most often in a fuel cell. Unfortunately, these technologies are either in their infancy and require more research and development to be realized or have so many production-side drawbacks that feasibility remains lacking at this point.

These deterrents have not significantly dampened enthusiasm or investment. Hydrogen is still in its infancy. With immense government backing, hydrogen is being championed as a promising substitute for traditional fuels to power the energy sector in the US.

We should be wary of this premature clean hydrogen expansion because of its purely economic and technical limitations and turn a skeptical eye to the last country which wholeheartedly embraced clean hydrogen before the technology was ready: Japan.

Japan was poised for success with clean hydrogen, they said. It is wealthy, geographically compact, and densely populated with high-energy-utilizing wide-spread manufacturing hubs. Japan also committed to clean hydrogen with financing and political support that dwarfs whatever current ad-hoc American program has mustered.

Japan’s National Hydrogen Strategy spelled out what was to be a robust program. Decentralized execution with top-tier oversight combined with generous financing and public-private partnerships should have made everything work. This was a top-down industrial policy par excellence.

Despite initially receiving favorable reviews, the ambitious program to “use hydrogen in every sector” failed. No strategy could resolve the technical limitations of scalability, interoperability, and transportation difficulty.

The process of electrolysis that charges the hydrogen cells provides low energy density and consumes fuel as overhead costs. Most of the hydrogen produced or utilized was so-called “grey hydrogen”, hydrogen in which the fuel used was not from renewable energy sources. This would be fine if it had been merely complementary, instead drive for hydrogen production at all costs inadvertently induced government-mandated demand, resulting in increasing non-renewable energy production to produce semi-green “grey hydrogen”. Instead of the National Hydrogen Strategy helping them realize green ambitions, Japan fell short.

Overcommitment despite initial challenges amplified problems. About 6 years into the National Hydrogen Strategy’s launch, sufficient hydrogen fueling stations, pipelines, and storage facilities were still wanting. Despite the alarming signs, Japan allocated an extra $3.4 billion to green hydrogen in 2021 which constitutes nearly 25% of the Green Innovation Fund. Strikingly, the Renewable EnergyREGI
Institute reported that 70% of the funds allocated for the Hydrogen Society Vision was “spent on bad ideas”. It became clear that hydrogen was a wasteful and inefficient energy carrier compared to alternatives. Overcommitment to becoming the industry leader prevailed over common sense.

While Japan has quietly scaled back its hydrogen ambitions, pivoting to nuclear power, it has not abandoned them. With its energy output declining for several years, a viable and financially sustainable energy policy remains elusive. The country has committed fewer resources to continue its investments in green hydrogen, while still hoping to become a major player in the global energy market. The government has announced several initiatives to support the development of green hydrogen, like funding for research and development, subsidies for demonstration projects, and investment in infrastructure. It may make sense if the technology catches up with ambition.

The US is in danger of taking the same route considering the initial symptoms of overcommitment demonstrated by overspending without clear policy and strategy in place. Mimicking Japan’s faulty approach may halt effective investment and hinder competing research efforts. Worst of all, turning hydrogen into pork is a waste of public resources.

In Japan, promising results were followed by signs of failure. The lack of a clear regulatory framework and standards for green hydrogen production, transportation, and storage discouraged investment and growth in the sector. High production costs were never meaningfully lowered despite earnest efforts at developing new technologies. And finally, the financially competitive edge the sector enjoyed, thanks to government backing, was lost over time.

Japan is now revising its 10-year funding plan in face of these policy failures. The US must avoid falling into the same trap. Clear standards for R&D and industrial applications of hydrogen would be a good start to avoid repeating mistakes. Creating a clear regulatory framework would also prevent the Biden Administration from investing in bad ideas as Japan did. Most of all, The White House and DOE should cease and desist from using hydrogen funding to promote social engineering agendas that have nothing to do with energy transition.

The US can easily avoid Japan’s mistakes. Failure is an excellent teacher, but only if you allow it to act as one.