Unlocking Potential for Low-Carbon Hydrogen Production from U.S. Natural Gas Resources

Abstract

Hydrogen will potentially play a key role while transitioning to a net-zero economy. This study addresses resource, environmental, economic, policy, and societal issues related to low-carbon hydrogen production by steam methane reforming with carbon capture and storage in Wyoming and other natural-gas-rich states. For low-carbon hydrogen produced from natural gas and electricity supplies and which stores CO2 in saline reservoirs in Wyoming, the levelized cost of hydrogen (LCOH) ranges from $1.62-2.00/kg H2, and the life cycle emissions range from 3.85-5.74 kg CO2-eq/kg H2. If claimed, the 45Q tax credit decreases the LCOH by 19%. Although the supplies of renewable natural gas feedstock and zero- or low-carbon electricity can lower the carbon footprint to make hydrogen projects qualified for the 45V tax credit, the 45Q tax credit is still a stronger economic incentive. To reduce the supply cost, a hydrogen cluster can be developed in the state by leveraging the colocation and coavailability of multiple natural resources and transport infrastructure. Developing a hydrogen cluster can directly create several thousand construction jobs and several hundred permanent jobs in Wyoming. Low-carbon hydrogen production can also be scaled up in other states across the nation.