California’s Last-Minute Hydrogen Debate: Balancing Industry Interests and Climate Goals

As California’s 2023 legislative session draws to a close, a controversial issue has emerged on the state’s energy agenda. A major utility’s push for new legislation has ignited a debate that hinges on the delicate balance between industry interests and ambitious climate goals.

Sempra and its subsidiary, SoCalGas, are seeking to introduce bills that would enable gas companies to charge ratepayers for investments in carbon capture and storage (CCS) as well as methane gas infrastructure. The proposals also aim to streamline hydrogen production and transportation approval processes, raising concerns and spurring reactions from both environmentalists and the energy industry.

In a move that has caught climate and environmental justice groups off guard, lobbyists for Sempra and SoCalGas have employed late-hour tactics to introduce potentially game-changing proposals. These proposals, compressed into the final weeks of the legislative session, touch on two key aspects: carbon capture and storage (CCS) investments and hydrogen production processes. However, the haste with which these proposals have been presented has raised concerns about the potential lack of thorough scrutiny and public input.

The heart of the debate lies in the definition of “clean” hydrogen and the extent to which industry practices align with environmental goals. While the state’s climate plan emphasizes the importance of deploying clean fuels and carbon removal infrastructure, critics argue that the proposed legislation could inadvertently perpetuate fossil fuel reliance. The proposal’s allowance for blending fossil gas with hydrogen has drawn skepticism from advocates who seek stringent guidelines to ensure a meaningful transition away from fossil fuels.

Sempra’s lobbying efforts have injected a complex dynamic into the debate. The company’s political influence, coupled with its historical connection to former political staffers and relationships with top-ranking legislators and agencies, amplifies the reach of its proposed bills. However, the pushback from environmental and climate justice groups reflects the growing demand for accountability and alignment with genuine renewable energy solutions.

One of the proposed bills centers around carbon capture and storage (CCS), a technology that has generated mixed sentiments. Critics view CCS as a potential enabler of continued oil, gas, and coal production, while proponents see it as a necessary tool for achieving California’s ambitious climate targets. The proposed legislation aims to allow gas companies to seek reimbursements from ratepayers for CCS investments, with the California Public Utilities Commission’s potential approval. However, the association of CCS with fossil fuels raises concerns about its long-term effectiveness in combating climate change.

The second proposal seeks to expedite the approval process for hydrogen production and transportation infrastructure. While this appears to support the growth of renewable hydrogen, concerns arise about the specificity of the language and its implications for the industry’s transition. The proposal’s potential benefits for SoCalGas’ hydrogen superproject in Southern California have led to speculations about alignment with industry interests.

Amid the intricate policy landscape, California is positioning itself as a player in the emerging hydrogen economy. With ambitious goals to eliminate climate pollution by 2045, the state’s pursuit of renewable hydrogen presents both opportunities and challenges. While the state aims to apply for federal Department of Energy grants to develop a hydrogen hub, concerns about hydrogen blending and pipeline safety highlight the need for comprehensive and thoughtful decision-making.

As the legislative session nears its end, California faces a critical juncture where industry priorities and climate aspirations intersect. The fate of Sempra’s proposals hangs in the balance, awaiting the endorsement of lawmakers who will decide whether to put their names behind the bills. With Sempra’s lobbying influence and the urgency to address climate change, the debate over hydrogen’s role in California’s energy future remains a complex and unfolding narrative.