“The Clean Transportation Program is — not to be too dorky about it — a beautiful market signal,” said Hannon Rasool, director of the Energy Commission’s fuels and transportation division. “It tells folks we’re committed, we’re in it for the long run and here’s a steady amount of funding.”
The program has explicitly set aside money for hydrogen fueling stations since 2013, when former Assemblymember Henry Perea, who now leads West Coast government affairs for Chevron, authored a 20% annual carveout for hydrogen. The goal was to build a network of 100 hydrogen-fueling stations. Gov. Jerry Brown increased that target to 200 by 2025. California Energy Commission staff told lawmakers in presentations that it will meet the 200 station goal by 2027.
The battle among Democrats in the Legislature
Reyes’ original bill would have forced hydrogen developers to compete for program funds directly with those who build electric charging stations, a proposal she called “technology neutral.”
“The truth is hydrogen has made less than an ideal progress in making this market competitive compared to other zero emission technologies,” Reyes said. She added, “I am not anti-hydrogen, especially not in the heavy duty space” and that she was taking all of her colleagues’ concerns seriously.
Since the program raises money through vehicle registration and other fees, the bill needs two-thirds of lawmakers’ votes to be reauthorized. It needs 54 votes out of 80 lawmakers in the Assembly and 27 out of 40 in the Senate.
“If we’re not able to reach an agreement, and it lapses or sunsets, it’ll be almost impossible to get a new bill through,” Reyes said. “So having it reauthorized is extremely important.”
Reyes said the legislators who oppose her proposal include “both individuals who want more dedicated funding for hydrogen, and those who feel that the 10% carve out for hydrogen in the legislation has already gone too far.”
Reyes declined to identify the legislators who want more hydrogen funding or those who want less.
But Melissa Romero, senior legislative manager for the environmental group California Environmental Voters, said at least seven Assemblymembers opposed reauthorization of the program even after the bill included 10% for hydrogen.
Romero’s environmental group supports candidates who seek to reduce California’s dependence on fossil fuels. She worries the clean transportation program might expire, leaving California in jeopardy of not funding the charging stations it needs for electric cars.
The state estimates it will need nearly 1.2 million chargers for battery-powered cars by 2030. Only about 88,000 are now installed.
“How is it that we could have a supermajority of Democrats…and not be able to extend a program that provides funding for zero-emission vehicle infrastructure?’ Romero asked. “That is totally crazy to me.”
Automakers opposed the bill because fees paid by car owners would be used in part to fund fueling stations for trucks.
“The state is nowhere near having the amount of necessary” electric car charging stations, so “it is unfair to place the burden” on car owners for paying for both truck and car stations, the Alliance for Automotive Innovation wrote to legislators in April.
Most large automakers have set goals to convert all of their fleets to battery-powered cars — not hydrogen — but they did not take a stance on the funding for hydrogen stations. Two of their members, Hyundai and Toyota, sell hydrogen cars.
The link between hydrogen cars and fossil fuels
Romero said the influence of the oil and gas industry, which is hoping to transition to hydrogen technology, is a major reason that the Legislature is debating whether to pay for hydrogen fuel stations.
Major oil and gas companies see hydrogen as a potential way for their industry to remain viable in a decarbonized future. Most hydrogen is now produced using natural gas. Some companies are exploring ways of making hydrogen a green energy source by splitting water using renewable-energy electrolyzers. But that technology remains much more costly than today’s process using fossil fuels.
Energy companies are also experimenting with capturing emissions from the natural gas process and then storing those emissions underground. But those carbon-capture techniques are not yet widespread.
While electric cars are also reliant on energy from carbon-emitting power plants, California is greening its grid. Under a state mandate, 100% of electricity must be renewable and carbon-free by 2045, with most coming from solar and wind.
Teresa Cooke, executive director of the California Hydrogen Coalition, said she is disappointed that so few hydrogen fueling stations have been built over the last decade. She attributed the slow progress to the Energy Commission delaying approvals and difficulty with getting the stations permitted.
Cooke said only about 3.5% of all state funding for clean cars has been spent on hydrogen vehicle infrastructure, while battery electric cars have been overwhelmingly favored by state agencies and lawmakers.
She said oil and gas companies deserve the chance to make the shift away from carbon-heavy fuels.
“It blows my mind that there is such resistance to (supporting) the possibility of oil and gas companies transitioning into hydrogen,” Cooke said. “They should be able to transition into a vehicle fuel that can be produced domestically, can be produced renewably and put into a zero emission vehicle and maintain all of the good labor jobs that come with it — full stop.”
Hydrogen support in the Legislature
Among legislators who support a carveout for hydrogen, some have been major recipients of oil and gas industry contributions, while others have not been.
For instance, one hydrogen supporter, Rubio, a Democrat from West Covina, took more campaign money from oil and gas than any Assemblymember other than Republican Vince Fong, who represents oil-rich Kern County, according to a CalMatters analysis of campaign contributions data from The National Institute on Money in Politics.
Rubio has taken $218,399 from the oil and gas industry since 2016, including contributions from Chevron, Valero and ExxonMobil, among others, the data shows.
In a statement to CalMatters, Rubio reiterated a widely cited industry finding that the U.S. hydrogen industry has the potential to create $140 billion per year in revenue and support 700,000 jobs by 2030.
Rubio said in her district — a swath of communities east of Los Angeles — people who drive long distances will likely need more options than electric cars.
“We have a great number of 'super commuters' that drive hours a day to their jobs,” Rubio said. “They can't afford to wait for their vehicles to get charged or gamble on whether they make it to their destination because of limited battery range.”
Irwin, the Assemblymember from Thousand Oaks, said she wants something closer to the 20% share that hydrogen got in past years. She has not taken much money from the oil and gas industry — around $3,100, with most coming from companies representing gas stations, not oil and gas companies.
Irwin said she believes hydrogen has a role to play in transportation, particularly for trucking, and so it makes sense to build hydrogen infrastructure for cars, too.
“We know that hydrogen has to be part of the future for medium-duty vehicles,” Irwin said. “So why not continue to invest in hydrogen stations that can accommodate both medium and light-duty? I think that's a really smart investment that hedges our bets.”
When the proposal was heard in the Senate’s Transportation Committee on April 11, several Democratic senators spoke in favor of maintaining a carveout for hydrogen.
Sen. Bob Archuleta of Norwalk said the technology was important for meeting the state’s climate goals. “We will need more zero emission vehicles options than plug-in alone,” he said. “We've got to combine everything. Hydrogen fuel cell vehicles are complementary.”
Archuleta has accepted $63,186 in campaign contributions from the oil and gas industry. Newman, the senator from Fullerton, has taken $4,000.
Experts say that hydrogen can play other roles in clean energy, including potentially replacing diesel for large trucks and aviation fuels. Hydrogen’s storage potential also is likely to be important as grids rely more on renewable energy.
California is competing to be named a regional clean hydrogen hub by the Biden administration, part of an $8 billion program. “California is all in on clean, renewable hydrogen — an essential aspect of how we’ll power our future and cut pollution,” Newsom said earlier this month, announcing plans for a statewide hydrogen energy strategy.
But a spokesman for the governor, Alex Stack, declined to say whether Newsom supports a carveout for hydrogen vehicle fueling stations in the Clean Transportation program.
Orville Thomas of CALSTART, a sustainable energy nonprofit, said the state money for hydrogen stations should be used for not just cars, but also medium and heavy-duty trucks.
“Let's make sure that we're being good stewards of that money, “ Thomas said. “Every million dollars is important to make sure California gets to its goals.”
Jeremia Kimelman and Erica Yee contributed reporting.
