The San Pedro Bay Port Complex is getting a boost in funding for hydrogen fuel infrastructure, and local companies are looking to benefit from that.
That money – $1.2 billion for California through the public-private partnership Alliance for Renewable Clean Hydrogen Energy Systems, or Arches, the group that applied for the federal Energy Department grant – will help pay for things like shipping trucks, port equipment and fueling stations at the ports. Once that’s done, one company – World Energy LLC – is ready to start pumping hydrogen fuel directly to the ports from its Paramount facility.
“Arches funding toward entities such as the ports will kick-start demand,” said Joe Ran, vice president of business development and innovation for World Energy. “As hydrogen usage in new applications becomes a reality for applications such as trucking or off-road equipment, World Energy is well positioned to supply clean hydrogen at scale through its hydrogen pipelines.”
Officials at both the Port of Los Angeles and Port of Long Beach welcomed the funding as another crucial piece to achieving their Clean Air Action Plan, through which they aim to achieve zero-emission operations. That plan contains many options for transitioning away from fossil fuels, including the relatively nascent hydrogen fuel. The money, which will be matched by the ports and their tenants, will fund the deployment of hydrogen-powered cargo-handling equipment, mobile hydrogen refueling trucks and hydrogen fuel cell heavy-duty trucks.
“This is going to be a really important factor to make this technology a viable option for our operators to take advantage of,” said Heather Tomley, managing director for planning and environmental affairs at the Port of Long Beach. “Another factor that’s going to be really important for deployment is bringing down the cost of the fuel. That’s hopefully one of the factors that this funding can help.”
Why hydrogen?
The bulk of discussions about moving vehicles to cleaner operations is taken up by electrification, with virtually all automakers now offering hybrid or full-electric personal vehicles in their fleets.
However, battery power is much less affordable and considered much less viable for heavy-duty vehicles, such as the trucks that haul cargo from ports to their destinations. That’s where hydrogen – which emits only water vapor as its exhaust – might come into play, Ran said, thanks to its high-intensity heat and energy density when combusted.
“Hydrogen brings a really intense energy source, and because of that there are a few sectors that are good for hydrogen,” he added, highlighting heavy-duty equipment, aviation and off-road vehicles.
World Energy, which is headquartered in Boston but has its largest staffing operation in Paramount, sees Southern California as a strong testing ground for hydrogen, in large part because of how much cargo is imported to the region. Ran said the company was so convinced that hydrogen could succeed here that, when it bought the former Paramount Petroleum refinery from then-owner Delek in 2018 for a reported $72 million and began a $2.5 billion revamp to produce sustainable aviation fuel, it also invested $300 million to establish a companion hydrogen-production operation.
That’s around the time the company first reached out to the ports about bringing hydrogen fuel to their facilities.
“Here we were. We made these investments and are going full speed ahead,” Ran said. “We knew there was a demand for it, and we knew the ports had a mission to decarbonize. It was essentially a cold call.”
Potential use
Sustainability officials at each port have previously talked about hydrogen as technology with high potential but still in the developmental and expensive stage. While this funding will not singlehandedly solve those issues with the flick of a wand, it should help bridge adoption by some operators who seek the technology over battery-powered competitors for its lower refueling time, longer range and simpler infrastructure.
“Some of the things that we’ve heard about hydrogen that the operators are excited about is that the operation of hydrogen fuel cell equipment is pretty consistent with the type of operation they’re used to today with diesel fuel equipment,” Tomley said. “There are definitely some advantages that some operators are looking at. For them, they’re going to have to look at what their specific needs are and what technology is available to meet that need.”
Other companies that are involved in port-related hydrogen initiatives include Southern California Gas Co. through its Angeles Link initiative to produce and deliver renewable hydrogen, and US Hybrid, a Torrance-based subsidiary of Ideanomics that designs and manufactures hydrogen fuel cell and battery powertrains for heavy-duty and specialty vehicles. The Los Angeles Department of Water and Power also expects to use the Arches funding – which has yet to be allocated to all of the California parties involved in creating the hydrogen hub – to help convert an existing natural gas plant to a hydrogen plant.
Gene Seroka, executive director at the Port of Los Angeles, said there were harbor craft and locomotive applications that the port has researched as potential hydrogen users. He also noted that while heavy-duty truck powertrains are available for hydrogen use, they remain a hard sell for many truckers, and this funding can help “take some pretty large bites” out of the ancillary expenses to help.
“The average trucker here has less than five trucks. They’re a small businessperson. They typically buy trucks on the tertiary market for $50,000,” Seroka said. “The battery electric truck is going for $400-to-$450,000 and needs just about the same money per truck for charging infrastructure. The hydrogen fuel cell truck is going between $700,000 and $800,000 in preproduction stage. It has some advantages, but to go from $50,000 to $700,000?”
Fueling the market
Ran said one issue with hydrogen fuel cell technology mirrors the “chicken or egg” question, in that speculators of either the fuel infrastructure or the technology to use it hesitate to pour money into one without the guarantee of the other.
While some automakers – notably Honda, Toyota and Hyundai – have dabbled in hydrogen fuel cell vehicles in recent years, it is far from a mainstream option for most consumers. Los Angeles is among only a handful of areas in the nation with even a modest amount of hydrogen fuel infrastructure at all.
World Energy thinks it can solve the scaling problem with hydrogen fuel production. While typical methods have involved splitting molecules from fossil fuel-based natural gas – which is zero-emission only if you capture the resulting carbon dioxide – Ran said World Energy has developed a method that utilizes byproducts from its existing aviation fuel production.
That aviation fuel is produced using animal waste, cooking oil and other fatty food waste. The method produces methane, ethane and propane as a byproduct. The (company’s) under-construction hydrogen fuel facility will use those byproducts, in addition to renewable natural gas (such as the natural methane emissions from landfills), to produce the hydrogen fuel.
And once that facility is up and running, by 2026, it can start pumping fuel directly to the ports, thanks to the existing pipeline that was, ironically, once used to pull in petroleum from the ports for refinement. Ran said the facility should produce between 60 and 100 tons a day, enough to fill the tanks of between 2,000 to 4,000 trucks a day.
World Energy is also developing a hydrogen-production facility in Newfoundland, Canada, and is using the Paramount blueprint to construct a Houston facility by 2027. Ran said the company is also evaluating sites for a third and fourth such facility, on a quest to reach a target of producing 1 billion gallons of sustainable aviation fuel – another cog in the decarbonization machine – annually.
“When solar got set up, it used to be so expensive, and now it’s one of the cheapest renewable energy sources. Ultimately, the efficiency of hydrogen fuel cell vehicles is going to continue to improve. You don’t get there until you start producing some,” Ran said.
“For us to get adoption, we have to get that cost down and we really believe that the volume we’re producing it in and the efficient distribution will get us there quickly.”
