The greatest hydrogen risk facing Pennsylvania policymakers

Photo: Environmental Resources & Energy Committee, YouTube

Lately we hear a great deal about hydrogen’s environmental and economic promise. But hydrogen deployment also carries risks, not just for health and safety, but economic risks, including higher prices, taxes, and utility bills along with little potential for job growth.

That’s why I joined the Pennsylvania House Environmental Resources and Energy Committee’s recent hearing on hydrogen hubs and climate change: to explain when hydrogen risks outweigh the rewards. Click here to view my full testimony.


First, as I told state legislators, it’s important to understand that the Appalachian Regional Hydrogen Hub, or ARCH2, isn’t a big deal environmentally or economically.

ARCH2 claims it will abate 9 million metric tons of carbon dioxide each year. That might sound like a lot, but it comes out to less than 2% of the region’s emissions, not even enough to offset the emissions of a single coal-fired power plant.

And 86% of the hub’s jobs will be short-term construction jobs, which, as we saw during the construction of Shell’s petrochemicals complex in Beaver County, might cause a temporary employment spike, but they don’t translate to long-term economic growth. The 3,000 permanent jobs will be shared with the other ARCH2 states, Ohio and West Virginia. The few jobs that land in Pennsylvania will amount to less than three-one hundredths of a percent of the Commonwealth’s 5.8 million jobs.

In short, the benefits that ARCH2 offers to Pennsylvania communities don’t offer much. But the risks are enormous. First, the carbon capture and storage technology with which ARCH2 aims to achieve its meager emissions reductions comes with a gargantuan price tag. Equipping power plants with this technology would double the cost of gas-fired power and triple the cost of coal power, causing electric bills to spike.

ARCH2 also stands to prolong fracking operations across the region. Some have celebrated this as a win. But, even putting documented health risks aside, there’s no question that natural gas development has actually harmed Pennsylvania’s economy. Since the dawn of the fracking boom, the twenty-two Ohio, Pennsylvania, and West Virginia counties that produce 90% of Appalachian natural gas, far from flourishing economically, have experienced record job and population losses.

Why? Even as the gas industry grows, its need for workers diminishes. Federal data show that, of Pennsylvania’s 5.8 million jobs, fewer than 25,000 of them are in the natural gas industry. That’s less than a tenth of a percent. Even when gas production was increasing, between 2019 and 2022, the gas industry laid off over 10,000 workers, about three out of every ten employees.

It doesn’t matter how much gas Pennsylvania produces — the industry is structurally incapable of creating lasting job growth. Producing more gas is a bad deal for Pennsylvanians, especially when our tax dollars are at stake.

Yet ARCH2 is pushing for an even greater slice of public funding. As my colleague Danny Cullenward, JD, PhD, a climate economist and lawyer with the Kleinman Center for Energy Policy, pointed out during the hydrogen hubs hearing, ARCH2 and other hydrogen producers are going after a hydrogen production tax credit, known as Section 45V, that could be worth hundreds of billions of dollars in the decade ahead.

The credit is currently restricted to facilities that meet stringent pollution standards — fossil fuels won’t cut it. But gas-based hydrogen producers are arguing that they should be able to qualify for the 45V tax credit using methane offsets, an accounting trick that would allow producers to claim they are preventing someone else from emitting methane into the atmosphere, even though they are making hydrogen from methane gas and emitting carbon dioxide in the process.

CNX Resources plans to do just that with its Pittsburgh airport hydrogen project. CNX claims the project will be powered by methane captured from leaky coal mines. While that might sound like a climate benefit, the net effect is, at best, a wash: the company earns a tax credit that lets it pollute because it paid someone else not to. This only shifts where the climate pollution occurs, not how much; and it doesn’t do anything to reduce CNX’s impact on local air and water quality.

Pennsylvanians have a lot to lose from hydrogen hub plans and very little to gain. That’s why, as I explained during the Pennsylvania House hearing, the biggest risk our policymakers face isn’t that they’ll do too little to support hydrogen, but that they’ll do too much, forcing hydrogen into uses that don’t make sense for our economy.

Sean O'Leary

Sean O’Leary, senior researcher, energy and petrochemicals, is a native of Wheeling, WV. He has written about coal, natural gas, and their role in the economies of Appalachia in a book, a newspaper column, and blog titled, “The State of My State”. Previously, Sean served as communications director at the NW Energy Coalition in Seattle, Washington.