Biden Energy Loan Revamp Starts With $1 Billion for Hydrogen
Biden Energy Loans Revamp Starts With $1 Billion for Hydrogen
(Bloomberg) -- The U.S. Energy Department said Thursday it would back a Nebraska project to convert natural gas into hydrogen, marking the first conditional loan guarantee of its kind under President Joe Biden.
With an up to $1.04 billion loan that would be guaranteed by the Energy Department, the commercial-scale venture by Monolith Nebraska LLC aims to supply hydrogen to the agriculture sector. Carbon black also produced at the site would be put to use in tires, plastic production and other materials.
The move represents a revival of the Energy Department’s loan programs office, which aims to use more than $40 billion in loan authority to accelerate the development and deployment of clean-energy technologies. The conditional loan guarantee is the first of its kind offered under the Biden administration and the first to go to a non-nuclear project since 2016.
Although the office was mostly dormant under former President Donald Trump, it previously provided a $465 million loan to Tesla Inc., helped finance the country’s early large-scale solar photovoltaic projects and provided a $535 million loan guarantee to Solyndra LLC, a California company that flopped in 2011.
The program also provided critical support to Southern Co.’s Vogtle nuclear plant in Georgia.
Loan Programs Office Director Jigar Shah, a clean-tech pioneer who helped usher solar power to the mainstream, has stressed the importance of providing a bridge for the rapid deployment of clean-energy technologies.
“They really see this program as, ‘Can we use this to launch platform technologies, not just individual projects?’” said Rob Hanson, Monolith’s co-founder and chief executive officer.
Monolith intends to expand its Olive Creek facility in Hallam, Nebraska, with the proposed loan. The facility uses methane pyrolysis, a process that subjects methane to high heat in the absence of oxygen. The methane splits into hydrogen and carbon black, a solid form of carbon used in car tires. The company this month announced a collaboration with the Goodyear Tire & Rubber Co. to potentially use carbon black from the facility, whose expansion is scheduled for completion in 2025. Monolith will use the hydrogen to make ammonia and sell it to area farms.
The methane pyrolysis process gives off no carbon dioxide, Hanson said. If some of the methane comes from renewable natural gas, supplied by landfills or farms, the process can be carbon-negative, removing more carbon from the environment than it produces. Current processes for making carbon black and ammonia emit greenhouse gases.
“Not only are we making the hydrogen cleanly, we’re also cleaning up this other industry many people haven’t heard about but everyone depends on,” Hanson said.
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