Hydrogen blending could lead to 'lengthy, contested' proceedings at US FERC

Pipeline operators and their federal regulators should brace for "lengthy, contested" proceedings as the industry moves toward blending hydrogen into natural gas infrastructure, according to an Interstate Natural Gas Association of America executive.

The nation's vast natural gas pipeline system could serve as a cost-effective means of shipping low-carbon hydrogen among a network of regional hydrogen hubs under development. However, the different gas quality needs of pipeline off-takers could give rise to conflict, INGAA Senior Vice President and General Counsel Joan Dreskin said during an April 19 webinar hosted by the organizations Electric Power Research Institute and Hydrogen Forward, a coalition of companies focused on the fuel.

Tariff proceedings before the Federal Energy Regulatory Commission could provide an early venue for debate. Interstate gas pipeline operators seeking to blend hydrogen into their infrastructure will have to update their FERC-approved tariffs to include gas quality standards that specifically address hydrogen, Dreskin said. Dreskin believed commissioners and pipeline customers will scrutinize hydrogen's impact on off-takers' facilities.

"I'm sure that there could be some contested proceedings between those that want to put as much hydrogen [as possible into pipelines] versus those that are concerned about the impact on their generators, their burners, their valves, and things like that," said Dreskin, who has worked in the FERC Office of the General Counsel.

Gas-fired power generators, industrial customers and gas utilities might have different tolerances for the same blend of natural gas and hydrogen, Dreskin said. Past battles over gas quality standards have touched on issues such as how a blend might impact pipeline safety and heat rate, or the amount of energy used to generate a kilowatt-hour of electric power, according to Dreskin.

In Dreskin's view, the regulatory framework for hydrogen blending in interstate gas pipelines is already in place. FERC's 2006 policy statement on gas quality standards, spurred in part by concerns over proposed LNG imports, could be instructive for hydrogen blending, Dreskin said.

Dreskin noted that the commission has not identified a blending threshold beyond which an asset would no longer be considered a natural gas pipeline but a hydrogen line. This distinction will be important because the scope of FERC authority over interstate hydrogen transmission remains unclear, and the commission does not have jurisdiction over pure hydrogen pipelines, Dreskin said.

In October 2021, FERC Chairman Richard Glick stated that the commission has the authority to regulate hydrogen blending in interstate pipelines but has not explored the extent of its authority. Specifically, Glick was uncertain "at what percentage the blending of hydrogen in the natural gas stream could require revisions to existing gas quality provisions or may require additional authority for the commission."

Hydrogen stakeholders have cited the uncertainty over regulatory authority as an impediment to project development.