West Virginia took the first steps Wednesday toward creating a hydrogen-powered economy with a ribbon-cutting for the first phase of the Appalachian Hydrogen Hub.

The U.S. Department of Energy Office of Clean Energy Demonstrations awarded the Appalachian Regional Clean Hydrogen Hun, or ARCH2, project $30 million for the initial phase, which will cover the costs of planning, engineering, analysis and engagement with labor and local communities that could see production nodes in the regional hub. Combined with private investment, phase one’s total investment is approximately $96 million.

The Appalachian Hydrogen Hub was one of seven regional hydrogen hubs announced in October by President Joe Biden and Energy Secretary Jennifer Granholm. John Haug, associate director of hydrogen hubs for the Department of Energy, told attendees Wednesday that the hydrogen hub projects are the largest cooperative agreements in which the DOE has ever engaged.

“We really haven’t dealt with (anything) of this size and magnitude,” Haug said. “This Appalachian Hub and ARCH2 is of strategic importance to the United States. It is critically important that we got this hub across the line. … The U.S. is going to be the leading producer of clean hydrogen in the world. Not only the leading producer, but probably the leading exporter of clean hydrogen in the world.”

The hub will consist of linked assets — or production nodes — connected between West Virginia, southeast Ohio and parts of Pennsylvania across hundreds of miles. Announced nodes include West Virginia sites in Belle, Follansbee, North Point Pleasant, Washington (near Parkersburg) and Fairmont; Ashtabula, Canton and Hopedale in Ohio; and Labelle and West Keating Township in Pennsylvania.

The ARCH2 project will focus on using natural gas to produce hydrogen, a process called blue hydrogen. The emissions created from using natural gas would be sequestered underground. When completed, the project will produce more than 1,500 tons of hydrogen from natural gas and other feedstocks, such as biomass.

Hydrogen is a fuel that can be used to decarbonize manufacturing processes, such as steel and metals production, and heavy transportation. Hydrogen can also be used as a long-term fuel cell to store energy for future use.

The Appalachian Hydrogen Hub represents a more than $925 million investment. The project could create an estimated 18,000 construction jobs and 3,000 permanent jobs. ARCH2 includes more than 40 partnering companies in the natural gas, energy and manufacturing sectors, along with local transit authorities.

Wednesday’s event featured federal and regional representatives from three states.

“To watch the country, the state and the contractor community come together for a common cause for a new fuel and to do something that really matters, it has been a delight,” said Lou Von Thaer, president and CEO for Battelle, a nonprofit working with the public-private partnership. “To be here today where we get to cut the ribbon and have the starting gun go off is really exciting.”

The ARCH2 project also includes partnerships with the federal National Energy Technology Laboratory, West Virginia University and Marshall University.

“Hydrogen is in abundance here in this state,” said WVU President E. Gordon Gee. “So much of what we have is in abundance in this state: coal, oil, gas, hydrogen, wind, solar and almost everything you can imagine. And then now we have an opportunity to capitalize on it and to make certain that our future is a West Virginia future for the world.”

“Not only are we a state that’s been rich in our tradition, but we will now lead the way for a prosperous and sustainable future,” said H. Toney Stroud, general counsel and vice president for strategic initiatives at Marshall University. “The hydrogen hub will create a network of consumers, producers, manufacturers, to help unleash the power of hydrogen that has been mentioned here today.”

According to DOE officials last week on a Zoom call, ARCH2 will need to meet specific deliverables during phase one in order to unlock additional federal dollars set aside for the regional hub.

“Most of the money won’t go out the door until phase three, which is the construction phase,” said Sarah Moore, federal project manager for the Appalachian Hydrogen Hub. “I also want to note that this hub contains several projects, and they can move through these phases on somewhat independent timelines. So, many will move to phase two more quickly, but others could take up to three years.”

The current hydrogen economy in the U.S. is small, but the Biden administration believes that by investing in and incentivizing hydrogen production, it can help reduce overall greenhouse gas emissions. Biden announced a goal at the beginning of his term in 2021 to reduce greenhouse emissions by between 50% and 52% of 2005 levels by 2030, with the goal for the U.S. to be carbon-neutral by 2035.

According to project leaders, ARCH2 would reduce carbon dioxide emissions by 9 million metric tons annually, or the annual equivalent of more than 2 million gasoline-powered cars.

“It is just not a plant that builds hydrogen,” Von Thaer said. “You have to build out an ecosystem. You have to build out a structure. You have to build out access and uses for these things to really work and to make a difference. And this is a great place to do it from.”

At least one hydrogen project — Houston-based Fidelis New Energy’s Mountaineer GigaSystem LLC — has been announced for North Point Pleasant. Upon completion, the project would provide clean hydrogen power to chemical manufacturers, transportation companies, other electric utilities and data centers, while storing greenhouse gas emissions in underground pore spaces on nearby state-owned property. The project will produce hydrogen through natural gas and biomass.

The $1.2 trillion Infrastructure Investment and Jobs Act — negotiated in 2021 by U.S. Sens. Joe Manchin, D-W.Va., and Shelley Moore Capito, R-W.Va., — included $9.5 billion in funding for hydrogen research. The West Virginia Hydrogen Hub Working Group, made up of state and federal elected leaders, applied to the Department of Energy last year to land a regional hydrogen hub.

“I think the best part about this is the partnerships that were originally begun,” Capito said following Wednesday’s ribbon-cutting. “You can’t do something like this alone. It’s too massive. I think technology is moving along too. I’m excited that we are not just at the beginning of the pack; that we are leading the way.”

Manchin and Capito inserted specific language in the infrastructure investment and Jobs Act requiring a hub in Appalachia. The total cost for the seven announced regional hydrogen hubs is more than $7 billion and could draw down as much as $43 billion in private investment. The $737 billion Inflation Reduction Act – passed last summer after negotiations between Democratic leaders and Manchin – also included several tax credits to incentivize the production and commercial use of hydrogen.

“What we envisioned when we wrote the bipartisan infrastructure law … the one thing that we knew had horsepower was hydrogen,” Manchin said. “It wasn’t like somebody had been thinking about it conceptually or whatever. It’s been around forever. We just never basically invested into it. And it was time for us to do that.”