Chevron to invest in ‘green’ hydrogen energy hub for Los Angeles.
Joint venture would hold fuel underground in Utah until it’s needed for a power plant serving L.A.
Los Angeles is making big plans to ditch coal and build the world’s first power plant that runs on green hydrogen.
Now Chevron Corp., one of the world’s largest oil and natural gas companies, says it will invest in a project crucial to making that dream a reality.
The project, Advanced Clean Energy Storage, would involve pumping hydrogen into naturally occurring underground salt domes in Utah’s Sevier Desert, across the street from L.A.’s coal-burning Intermountain Power Plant.
Los Angeles officials and their Utah counterparts had planned to close the plant by 2025 and replace it with a facility that burns natural gas, another planet-warming fossil fuel. But after The Times wrote about the plan in 2019 — and the proposal was slammed by climate activists — the officials changed course.
They said the gas plant would be built, but its initial fuel mix would consist of 30% green hydrogen and 70% natural gas, eventually shifting to 100% hydrogen — eliminating all planet-warming emissions.
Nothing like that has been done before. If all goes as planned, it would be a game-changer for the climate.
What makes hydrogen so attractive? It can be produced by simple electrolysis, using solar or wind power to split water molecules into hydrogen and oxygen. And it can be banked for long periods of time before being burned, allowing sunlight and wind to be “stored” for times of year when those renewable power sources are not abundant.
The Intermountain storage project is a joint venture between Japanese conglomerate Mitsubishi Heavy Industries and Magnum Development, a Utah company that owns the underground salt domes.
Salt domes are common on the Gulf Coast but rare out West. The project’s developer was initially focused on a different type of energy storage known as compressed air, but hydrogen has since emerged as the big-ticket item.
Paul Browning, president of the Mitsubishi subsidiary involved with the project, said the companies will use renewable electricity to produce hydrogen on sunny, windy days, then will convert the fuel back to electricity “when it has its highest value to the grid.”
“Sometimes that’s moving power from the middle of the afternoon to the early evening,” he said. “But sometimes that’s moving power from April to October. That’s where hydrogen really has an advantage.”
Enter Chevron. The San Ramon, Calif., company said this month that it had “agreed on a framework to acquire an equity interest in” the Mitsubishi/Magnum joint venture.
Chevron declined an interview request. Clearly, the company brings deep pockets to the project. Although Browning wouldn’t reveal an overall price tag, the joint venture hopes to win a $595million loan guarantee from the U.S. Energy Department, and Browning suggested that wouldn’t cover the entire cost. So it won’t be cheap.
But is Chevron serious about accelerating the clean energy transition? Or is its investment in hydrogen a stalling tactic, a way to claim that it’s taking action on climate change while continuing to focus mostly on oil and gas?
Climate activists are skeptical.
Chevron said last week it would spend $10 billion through 2028 on projects that reduce climate pollution, a tripling of its low-carbon investments.
But the activist group Follow This — which recently persuaded 61% of Chevron shareholders to support a resolution calling for the company to slash emissions from the use of its products — pointed out that Chevron would probably spend a total of 10 times that much in the coming years.
“A company that continues to spend up to 90% of their investment capital on fossil fuels cannot claim to be part of the energy transition to confront the climate crisis,” the group said in a news release.
Chevron Chief Executive Mike Wirth, meanwhile, dismissed solar and wind power as poor investments, saying on CNBC last week that the company would rather return money to shareholders and “let them plant trees.”
Chevron lobbied on Assembly Bill 1395, also known as the California Climate Crisis Act, which would require the state to cut emissions to 90% below 1990 levels by 2045. Chevron spokesperson Tyler Kruzich declined to discuss the company’s position. The bill failed to pass this month after facing opposition from the Western States Petroleum Assn., which counts Chevron as a member.
Kruzich said in an email that Chevron “engages with state lawmakers on a variety of proposed legislation and regulation, seeking to balance policy objectives with the need for affordable, reliable energy.”
Environmentalists worry about oil and gas companies exploiting the promise of hydrogen to kill climate policies that could reduce pollution much more quickly.
The nonprofit law firm Earthjustice last month cited several examples in a report, such as the argument by Southern California Gas that cities shouldn’t require new buildings to have all-electric space and water heating, in part because hydrogen might someday be able to fully replace natural gas.
The report’s authors, Sara Gersen and Sasan Saadat, said hydrogen could be crucial for ditching fossil fuels in “hard to electrify” parts of the economy, such as heavy industry, aviation and shipping. But they don’t want to see it used as an excuse to block policies that would cut oil demand by requiring the rapid rollout of electric cars, or would cut natural gas demand by promoting the use of electric heat pumps.
“This is a larger movement in the fossil fuel industry, going from denying the fact of climate change to just delaying climate action,” Gersen said.
The Earthjustice report said fossil fuels are used to produce nearly all the hydrogen in use today, unlike the “green” hydrogen that Mitsubishi and Magnum plan to produce in Utah.
The report criticizes the oil and gas industry for pushing policies “that would increase hydrogen production from renewables and fossil fuels alike” and trying to obscure the difference.
But what about L.A.’s vision of shifting from coal to gas to hydrogen at its power plant outside Delta, Utah? Will that be a multibilliondollar climate boondoggle or a model for other cities and countries to follow?
It’s hard to judge, because nothing similar at this scale is being attempted elsewhere.
Intermountain Power Plant provided 16% of the city’s electricity last year, so the Los Angeles Department of Water and Power can’t just shut off the gasfired replacement facility if hydrogen doesn’t work out — it needs that power.
On the other hand, if everything does work out, there’s so much space to build underground salt caverns that Mitsubishi and Magnum could create a hydrogen hub serving customers all over the Western United States.
Browning is confident the technology won’t be an obstacle. He said Mitsubishi already makes a gas turbine that can handle a 30% hydrogen mix and expects to have a turbine capable of burning 100% hydrogen much sooner than 2045 — possibly this decade.
“This is going to be the largest energy storage project on the planet,” he said.
As for Chevron? Kruzich said the company “has the people, partnerships, engineering and project management expertise” to provide “the affordable, reliable and ever-cleaner energy that California needs.”
The company’s proposed partnership with Mitsubishi and Magnum, he said, “will be critical to delivering green hydrogen as a transportation fuel to California and other markets in the Western U.S.”