EQT Confirms What it’s Planning for its ARCH2 Hydrogen Hub Project

October 16, 2023 — EQT (NYSE: EQT), the nation’s largest independent natural gas producer, is a founding member of the Appalachian Regional Clean Hydrogen Hub (ARCH2), a collaborative of 15 pilot projects in Pennsylvania, West Virginia and Ohio that won up to $925 million in U.S. Department of Energy funding. ARCH2 was one of seven regional hubs selected to receive a combined $7 billion in funding, which was announced by the Biden administration on Oct. 13 with the intent of creating a clean hydrogen economy that would reduce greenhouse gas emissions.

The idea of a hydrogen hub is to create an affordable form of energy that can be used in place of fossil fuels like gas, coal and oil to decarbonize manufacturing, agriculture, transportation and other types of pollution-emitting activities. Hydrogen can be created from natural gas, wind, solar and nuclear power, although at the moment it’s not as cheap as traditional energy sources. The $7 billion in hydrogen hub funding, along with other tax credits and funding sources, is designed to make it economically competitive and scale hydrogen production and distribution.

EQT is keeping details about the low-carbon aviation fuel project, which would be in concert with undisclosed partners, close to the vest. A source told the Business Times last week it was in the range of a potential $2 billion investment. There was no word on where the production plant would be located, but it would use natural-gas derived hydrogen, also known as blue hydrogen.

“We’re going to be producing blue hydrogen, which could be used for multiple purposes including transportation and local power,” said Rob Wingo, EVP of corporate ventures at EQT.

The winning hydrogen hubs, including ARCH2 and a Philadelphia-focused Mid-Atlantic Clean Hydrogen Hub (MACH2), are in the midst of negotiating with the federal government about the projects. Wingo said the projects could begin to start the development, permitting and financing process by 2025, and, if all goes well, the projects could expect to go into service in either 2027 or 2028.

The Business Times reported Friday that EQT is also working with Mt. Pleasant-based Watt Fuel Cell and West Virginia utility Hope Gas on a hydrogen fuel cell that could be used to power residential homes. The hydrogen would be produced using natural gas.

Wingo stressed that ARCH2, contrary to some concerns, is a multistate hub that would have definite benefits for Pennsylvania, West Virginia, Ohio and perhaps Kentucky.

“We knew it had to be (multistate) to compete,” Wingo said.

EQT has been a driving force in the future of hydrogen in the transition away from carbon emissions to meet the world’s climate goals. CEO Toby Rice was part of a group around the Pittsburgh region that included Shell Polymers, United States Steel Corp. and others to discuss the potential for hydrogen. That morphed into Appalachian Energy Future, an advocacy group. EQT, concerned by the slow pace of progress on a regional hydrogen hub application, ended up joining an initiative in West Virginia that became ARCH2.

Wingo said ARCH2 became more than just West Virginia and gathered more partners along with the help of U.S. Sen. Joe Manchin, D-West Virginia, that broke down barriers and helped bring more companies across the hydrogen value chain.

“The coalition was powerful and made our application stronger really than anybody else in Appalachia,” Wingo said.

Wingo said the hydrogen hub’s funding was great but one of the other big benefits has been as a platform to bring different companies together and accelerate the commercial discussions faster than it would have.

“It was about bringing companies toward a common goal and a common deadline to accomplish a big challenge,” Wingo said.

To learn about EQT’s environmental, social and governance efforts visit: https://esg.eqt.com

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