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Green Hydrogen Hub Taking Shape In Louisiana

October 19, 2022 Sean McMahon Season 2 Episode 9
Green Hydrogen Hub Taking Shape In Louisiana
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Renewable Energy SmartPod
Green Hydrogen Hub Taking Shape In Louisiana
Oct 19, 2022 Season 2 Episode 9
Sean McMahon

A key component of the Biden administration's energy transition plan involves establishing hydrogen hubs at multiple locations across the US.  Michael Hecht, president and CEO of Greater New Orleans Inc., joins the show to share details about H2theFuture, which is a green hydrogen cluster that's being developed in southern Louisiana.

H2theFuture was recently awarded $50 million from the US Economic Development Administration to develop a green hydrogen hub that will include everything from R&D facilities at multiple Louisiana universities to an end-use project at the Port of South Louisiana. Michael and his team pulled together many different stakeholders to get H2theFuture off the ground, so his insights on why southern Louisiana is well-positioned to play a big role in the future of green hydrogen are worth a listen.

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Show Notes Transcript Chapter Markers

A key component of the Biden administration's energy transition plan involves establishing hydrogen hubs at multiple locations across the US.  Michael Hecht, president and CEO of Greater New Orleans Inc., joins the show to share details about H2theFuture, which is a green hydrogen cluster that's being developed in southern Louisiana.

H2theFuture was recently awarded $50 million from the US Economic Development Administration to develop a green hydrogen hub that will include everything from R&D facilities at multiple Louisiana universities to an end-use project at the Port of South Louisiana. Michael and his team pulled together many different stakeholders to get H2theFuture off the ground, so his insights on why southern Louisiana is well-positioned to play a big role in the future of green hydrogen are worth a listen.

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Energy innovation for the next generation

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

Sign up for the Renewable Energy SmartBrief

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(Note: This transcript was created using artificial intelligence. It has NOT been edited verbatim.)

Sean McMahon  00:08

What's up everyone and welcome to another episode of the renewable energy smart pod. I'm your host, Sean McMahon. Now, the Biden administration has rolled out all kinds of initiatives as part of its energy transition ambitions and one of those initiatives is a plan to establish hydrogen hubs at multiple locations within the US. Last year, we spent a couple of episodes on this podcast talking about green hydrogen. Those episodes were wildly popular, so I figured it was about time we revisit the topic, and in a few minutes you'll hear an interview I conducted with Michael Hecht. Michael is the president and CEO of Greater New Orleans Inc. or GNO. GNO has been the organizing force behind H2theFuture, which is a clean hydrogen cluster that's being developed in southern Louisiana. 

Michael and I had a really fun conversation. He was fresh off the plane from watching his beloved New Orleans Saints take on the Minnesota Vikings in London. And he explained how H2theFuture, which was recently awarded $50 million from the US economic development administration to develop a green hydrogen hub that will include everything from R&D facilities at multiple Louisiana universities to an end use project at the port of South Louisiana. Michael and his team pulled together many many many different stakeholders to get H2theFuture off the ground. So I think listeners of this podcast will appreciate hearing just how they did it. 

Looking ahead, today's episode is actually the first of a few episodes about green hydrogen, a green hydrogen episode hub, if you will. I can't quite yet disclose who we are bringing on the future episodes. But I promise you, you're gonna hear more great insights about green hydrogen before the end of this year. 

And of course, COP27 is less than a month away. So we're cooking up some episodes to cover that global gathering. Lots of good stuff is coming down the pipeline, so stay tuned for those episodes. 

Before we learn more about H2theFuture from Michael Hecht of Greater New Orleans Inc. Here's a quick word from the exclusive sponsor of today's episode. EDF Renewables

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Sean McMahon  02:35

Thank you everyone for joining me for today's show. I'm pleased to welcome Michael Hecht from Greater New Orleans Inc. Michael, how are you doing today?

Michael Hecht  02:42

I'm doing fabulous Sean. I just got in from a quick jaunt across the pond to London to see my beloved football team lose again. But you know, the sorrow was lubricated with Guinness and friends. And you know, and now was used to be returned. So it's great to be back. 

Sean McMahon  02:58

Yeah. Well, welcome back to the states bring you on the show today to talk about H2theFuture. It's a project going on in New Orleans. So let's get right into it. You know, what is that project? And what's your role in it?

Michael Hecht  03:08

Thanks Well, ah, H2theFuture is a project that's predicated on the idea that Louisiana has always been an energy state, primarily in hydrocarbons. But now it can be an energy state of the future with a more clean energy outlook. And when we began to understand about the potential for green hydrogen, particularly as a feedstock for our industrial corridor, where we are the most intensive users of industrial hydrogen for processes, like making ammonia for fertilizer or refining steel, we said, Hmm, we might have an opportunity to continue to power our industrial corridor, but do it with a cleaner source of fuel and feedstock, and that'd be a win for the economy and the environment. That was the genesis of H2theFuture.

Sean McMahon  03:57

All right, so what are the key elements of the project?

Michael Hecht  04:00

Well, I guess there are two parts of I'm sure that your audience knows but you know, green hydrogen differs from gray or dirty hydrogen and that it's synthesized from water, instead of natural gas as we've always done it here. The key to that is that the electrolyzer that splits up the water, the electricity has to be created by a clean energy source, otherwise, it's faux green. And so what we're saying here is that we're going to do that with wind energy with wind installations in the Gulf, that are going to power electrolyzers that are maybe sitting on disused oil and gas rigs, that's going to then create the hydrogen which is piped into our industrial corridor. And according to our smart and well paid friends and mackynzie will be able then to maintain our industrial corridor, but potentially reduce carbon emissions by as much as 70%.

Sean McMahon  04:46

I dug into your website, everything is lined up and all the groups that have come together for this. So what is H2Workforce?  H2Testbeds? H2NeXus and things like that, it seems like those are some aspects of this wider picture that might have helped to get some buy in from other local constituencies.

Michael Hecht  05:02

Ya, I know, all these sound kinda like JayZ lyrics, but they weren't intended to so Alright, so the background of this is that we were one to 4% of national winners of a Department of Commerce, EDA grant, it was the Build Back Better regional challenge. For ours, we pulled together 35 partners. From across South Louisiana, we pulled together other economic development organizations, universities, including our HBCUs nonprofits, and we basically applied and there are five parts to our application. The first is what we call h2 testbeds. And this is the work that's happening at our universities themselves. So for example, at LSU, they're working on electrolyzers and carbon capture technology, at UL Lafayette, they're working on electrolyzers, as well at University of New Orleans and working on clean maritime. So that's where the research is actually happening. The second part, a part that I'm particularly excited about is Nexus, the new energy center of the US, this is going to go at the Research and Technology Park of the University of New Orleans. And it's going to be the physical location, the hub of all the activity around energy transition for Louisiana, including green hydrogen, so you're gonna have existing companies, they're startups, training space, public space, social space, if you know, for example, the Cambridge Innovation Center that they have up in Boston, or they have in in in Rhode Island, it's going to be a similar type of physical hub where people can meet, serendipity can happen. And the media can point to it and say, this is where it's all coming out of, then the third part is a workforce component. There, we're going to be working with our two year college system, as well as our HBCUs. To make sure that workers new people are trained for clean energy, but also that existing workers, particularly the 22,000, that have lost their jobs in the oil and gas industry over the past 20 years, can be trained for green hydrogen, and clean energy. So these are programs are going to happen in the universities. Also out in the community, some of them will be full degrees, including associate's degrees, some of them might just be certain certificates that could happen over a period of weeks. Then the fourth component of this is business development. That's one, we're going to be working with our partners in Baton Rouge. And that's going to be bringing in new companies in the clean energy space, but also working with existing companies, including hydrocarbon companies in Louisiana, to help them understand how they can be part of the green hydrogen supply chain, and generally how they can clean up their operations. And so a carbon capture, although it's not kind of the headline, in this project, is also going to be something we're going to be pushing companies towards, if it's a way they can take their traditional processes and capture the carbon and in general, move Louisiana to the forefront, then the final part is going to be a demonstration project. That one we're going to do at the port of South Louisiana. And here we're going to be taking green hydrogen, with that creating e methanol. And we're going to be building an E methanol, clean fueling barge that then is going to fuel the First Fleet of zero emission, tugboats in America that are going to operate on the Mississippi River. They're called the hydrogen one built by a company called maritime partners. And so we're going to demonstrate how we can take the synthesized green hydrogen and put it to industrial use, and be able to reduce our emissions while maintaining our work product.

Sean McMahon  08:40

All right, well, you just mentioned a ton of entities there, right? You know, from the college campuses, right on up to the hydrocarbon companies. One of the things I'm really kind of passionate about is messaging. So how did you go about pulling together all these stakeholders for what's really kind of regionwide and massive undertaking? What was that like?

Michael Hecht  08:59

Well, it's interesting, Sean, you might say how could a state like Louisiana, that is so culturally rooted in oil and gas, that the color of its football team are black and gold, like oil, black gold, and that is intentional, because they were founded by an oil man. And the reason are the way we've been able to do this as a state and lean into particularly wind energy, which is the power source for green hydrogen, is that we've led with it as an economic idea that has an environmental benefit. But we basically have said is that all of the skills all of the people all the assets that we've used for decades to engineer to construct to install and to service oil and gas rigs, we can use to do the exact same for offshore wind because if you think about it, on offshore wind structure and installation is really in many ways similar to an oil and gas rig in terms of its massiveness, in terms of the needs for skills like welding in terms of lift boats, construct it is just that once you're out and hundreds of feet of water, you're going up for wind instead of down for oil. So it was really our folks down in the bayou, who traditionally are Republicans who have gotten behind the idea of wind energy as a way to use what they've done for decades in a new application. And in fact, the first wind farm in America, Block Island off the coast of Rhode Island was almost entirely engineered, constructed and being serviced by Louisiana oil and gas companies. And so there's a lot of enthusiasm in the traditional hydrocarbon world here in Louisiana for offshore wind, because they don't really see it as a transition, meaning a change. They really see it as an evolution. And for that reason, because we lead with the economic elements. We've been able then to wrap around the environmental elements and say that they can go together this is where the economy meets the environment. And everybody's very, very comfortable with that.

Sean McMahon

We'll be right back. 

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Sean McMahon  11:48

And now, back to my conversation with Michael Hecht from Greater New Orleans, Inc. 

All right, you mentioned the strategic importance, I guess, to make sense to have Louisiana be the hub of something like this, because of all the history of of energy development. But are there any dangers to that region, specifically to natural disasters and things like that? Because I know, one of the questions I tried to get to with, you know, offshore wind is like, Can those turbines, you know, withstand a category five hurricane, who have you talked to from the wind development sector to address those concerns?

Michael Hecht  12:17

Well, there's some individuals who are specifically addressing those concerns, or there's a new company we have called Gulf wind technologies, which is developing technologies, specifically for the Gulf. And then there are other companies like LM wind power, which is owned by GE, which is making the longest blade in the world 107 meters long, that are also looking into this. And it is true that it would seem that on the surface that the Gulf has kind of a Goldilocks problem with its wind, we either don't have enough or we have too much. But then when you consider that there are offshore wind installations, for example, in Southeast Asia, where they're dealing with typhoons, and then the fact that the technologies, whether it's material science, or just doing things that we've always done in the natural world, and in the built world, when we encounter storms, like feathering the blades, there's a high degree of confidence that we're going to be able to build structures that are going to be suitable for, you know, the occasional category four Category Five, hurricane, one of the things that got us very interested in offshore wind power was when we saw a study by NRL, the National Renewable Energy Lab, and it had Louisiana ranked number four in the country, for potential for offshore wind. And that was, to be honest, somewhat surprising to us, because we said, Man, you know, we thought we had this too much not enough problem. And they said, they acknowledge that, and actually, the very best wind in the Gulf is off the coast of Corpus Christi off of the southeast coast of Texas. But they said on the other hand, because we have a broad shallow shelf off the coast of Louisiana, it allows our offshore wind installations to be embedded in the seabed, instead of having to float them. And that actually makes them much less expensive to install. And so that really works in our favor. So overall, the feeling from the experts is that with a little bit of innovation, the Gulf of Mexico actually will be a quite good location for offshore wind over the next 10 years.

Sean McMahon  14:10

Do you feel like you have any kind of Head Start considering the transportation and shipping infrastructure that's already in place when compared to other hubs that might be out there?

Michael Hecht  14:17

No doubt when we were pitching this to the Department of Commerce. We talked about our existing pipeline network, which would go around the earth over six times, if you laid it end to end our existing port infrastructure, which is the best in North America, our workforce, which for decades, has been doing this complicated welding and servicing rigs offshore. And we said, because this represents just an evolution of those existing skills and assets. This is something that we have a 50 or 60 year headstart on versus other places in the country that might be doing a de novo. So no, there's no question that that we haven't Headstart and frankly, that was our competitive advantage that we pitched to the federal authorities.

Sean McMahon  14:59

Okay, and now Department of Energy recently came out with the National Clean hydrogen strategy and roadmap. How does your project fit into that?

Michael Hecht  15:06

Well, it very much weaves into that. Louisiana is applying to be one of the hydrogen hubs in the country, applying along with Arkansas and Oklahoma as a consortium. And our governor has been very clear that Louisiana intends to be an energy state of the future, he, he spoke to this and COP26, he led the application for us on the hydrogen hub. And actually, for our project, we're getting $50 million from the Department of Commerce, but that's being matched by $25 million from the state of Louisiana. So the commitment is there at the executive level. And again, it's driven by an understanding that with clean energy, we are going to be able to preserve and grow jobs, at the same time that we are preserving the environment. And that's why I believe this has bipartisan support in the state, and why we continue to apply for all of these various projects that together will make Louisiana what it is today for natural gas in the future for hydrogen.

Sean McMahon  16:07

Okay, and I talked earlier about the messaging and kind of building the coalition, and there's gonna be more than more of these hubs around the US. So if you had any advice for someone who's in your position, who's trying to kind of pull together all those stakeholders, I hadn't had to get that done. What would it be?

Michael Hecht  16:22

When I think about the coalition that we pulled together for H2theFuture, which again, was, was almost three dozen organizations across the south of the state, it came together, because originally four of us were all applying for the grant. And we hadn't called each of the three. And basically, it was agreed that they would drop their applications and allow genome Inc, to lead one collectively, for all of us recognizing that if we all applied, we all were going to lose, the only way that they were able to make that decision was because of honestly over a decade of working together, really 15 plus years since Katrina, that had built up a level of trust, a trust of our intentions, and a trust of our ability to execute. And without that level of familiarity and affinity and trust, there's no way that we would have been able to work together like this. And so although the coalition and the application came together, seemingly very quickly, in fact, the foundation had been laid over, you know, 10 to 15 years. And that was really the secret to our success.

Sean McMahon  17:27

Were there pitfalls that you encountered along the way, either technical or with building coalition?

Michael Hecht  17:32

Oh, I mean, there were, you know, many twists and turns. And we had a lot of fire drills along the way. So for example, our Nexus center, we had thought that we were going to put it down at a port site. And with two days to go before the application, it became apparent that for some, frankly, legal reasons, we weren't going to be able to put it there. So we had to pivot and put it at the University over about 48 hours. But again, each time one of these fire drills happened, because of our relationships, we were able to make a few phone calls. And people were able to some degree to to just trust that it was going to work out and we were able to resolve them. I think the biggest question we had going into this in terms of a technical pitfall was going to be the price of green hydrogen versus the price of gray hydrogen, because that's really the trick. If the price is not comparable, then then green hydrogen is not going to be sustainable without subsidy. And we didn't want to subsidize product. There are two things that make us feel better about that. One is that the technology related to electrolyzers continues to improve. And that's part of our project. The second is that we have such scale of industrial hydrogen consumption here in Louisiana, that we're going to be able to amortize our fixed costs over a over a large user base. And actually, the third thing I'm just thinking about this, that is just now happening, is that because of what's going on in Europe with the invasion of Ukraine, actually, now we're seeing the price of natural gas shoot weighed up. So not only are we seeing the price of green hydrogen come down, but the floor is rising. When we started this project, natural gas was under $2 per MMBtu. Now it's up what Sean at like five or six, and so the delta is getting much smaller. And although that's bad for users of natural gas, and frankly, for electricity today, in terms of the feasibility of green hydrogen, which is about that delta, it actually improves it.

Sean McMahon  19:31

So what are the next steps for your project?

Michael Hecht  19:34

Well, you know, to some degree, Sean, we've been not only building the plane while we've been flying it, we've actually been looking for the airport. We were just told where the airport is because we just just announced a couple of weeks ago that we won the grant. And so now we're very busy looking to hire the staff who's going to run the project for the next four years plus, and we're very anxious to get the Nexus center open by the summer of 2023 and basically crank up the The entire project, our goal is that within a couple of years, we're gonna be able to take folks to the port of South Louisiana, have them see the clean fueling barge that we've built. And to watch these boats go up and down the river, servicing the entire country in the world, frankly, but doing it with zero carbon emissions. And we think that if we're able to make it have people see touch, feel these manifestations of the green hydrogen economy, from Nexus to the clean barges on the river and clean tugboats on the river, they'll be able to understand this is not just an idea they're reading about in magazines or hearing about on podcasts, but actually is a way we can take not just south Louisiana, but America forward into a clean energy future. So the clock has begun to tick. But we're we're very excited because there's great enthusiasm in the industry, great enthusiasm and the public in the media. And as we've talked about, because we're talking about the environment and the economy coming together, money meeting morality, there's great bipartisan enthusiasm, and so we're ready to get to work.

Sean McMahon  21:08

And then one thing I'd like to do on this podcast whenever we get a chance to ask folks like you for bold predictions. So what do you got? For me, Michael, you seem like you're pretty bullish about the prospects for H2theFuture. So where are we in five to 10 years?

Michael Hecht  21:22

In five to 10 years, the industrial corridor of Louisiana, which is the most intensive on a per capita basis by far in the country, and uses the most hydrogen per capita second most overall in the country will be entirely powered by clean hydrogen, which might not only be green hydrogen, some of it might be blue from carbon capture. Some of it might be pink from nuclear, but we are going to be able to demonstrate to the country that we have the ability to preserve and grow well paying middle class jobs, to create the products, whether it's the plastics, or the fertilizers, or the steel or the fuel for our country and the world. But do it in a way that is much more environmentally sensitive. And in that way, I think Louisiana is going to be a leader for the country, and is going to be an energy state of the future.

Sean McMahon  22:16

All right, well, Michael, Hey, how can our listeners learn more about the H2theFuture project?

Michael Hecht  22:20

Oh, thanks, Sean. Well, we have a website that includes all the information, it's with two as the number so big H number two, the that contains all the project information and contact information, or otherwise, they can also just go to genome and get in touch with myself. And we'd be happy to share all of our mistakes and our small number of successes that we're trying to build on.

Sean McMahon  22:45

 Alright, great.. We'll include a link to that in the show notes for this episode. So I appreciate that. Awesome. Well, it sounds like there's some exciting times ahead and quite frankly, exciting times already happening for you and the region. So I really appreciate your time. Thank you for joining me.

Michael Hecht  22:58

Sean. Thanks so much. I look forward to coming back and reporting on our progress.

Sean McMahon  23:02

Me too. I look forward to hearing that. Well, that's our show for today. But before we get out of here, I want to say one final thank you to the exclusive sponsor of today's episode. EDF Renewables. 

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What is H2theFuture?
Key aspects of the H2theFuture coalition
What messaging did you use to get buy-in from various stakeholders?
Benefits and risks of establishing a hub in Louisiana
Why Louisiana has a competitive advantage
How does H2theFuture fit into the DoE's National Clean Hydrogen Strategy and Roadmap
Advice on messaging for others trying to establish hubs around the US
Pitfalls the coalition has encountered
Next steps for H2theFuture - Money Meets Morality
Bold predictions for H2theFuture and green hydrogen