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Sen. John Michael Montgomery
OKLAHOMA CITY – Touting them as another step toward the creation of a regional hydrogen hub, the Oklahoma Senate last week passed two bills that would encourage the development of hydrogen as an energy source.
Senate Bill 1857 would add hydrogen-powered vehicles to the list of vehicles eligible for the state’s 10/10/10 tax credit plan. A companion measure, SB 1858, would create a tax credit for 50 percent of the tuition paid by those who get a degree related to hydrogen engineering, provided the individual is working for a qualifying employer within one year of obtaining the degree.
Both bills were authored by state Sen. John Michael Montgomery.
“This is a very exciting endeavor, and hydrogen has the real possibility to be a viable commercial fuel, especially when you consider how clean and cost-effective this type of energy is in relation to other sources,” Montgomery, a Republican from Lawton, said. “We have an excellent opportunity to be a nationwide leader in hydrogen fuel production, but we must give businesses the tools they need to succeed when developing this new energy type.”
A fiscal impact study provided by the Oklahoma Tax Commission estimated the cost of SB 1857 at $825,000 for fiscal years 2023 and 2024. Data provided by the U.S. Department of Energy’s Alternative Fuels Data Center indicates that only 11,016 hydrogen fuel cell vehicles are in use as of Aug. 2021. All of those vehicles, record show, are located in California and Hawaii.
However, for SB 1858, the tax commission said it was unable to estimate the cost to the state.
“The number of employees who may be considered ‘qualified employees’ under this proposal is unknown and information is not available to determine related tuition reimbursement and compensation amount,” an analysis by the commission noted. “As a result, the expected revenue impact is an unknown decrease in income tax collections.”
Montgomery’s bill follows an announcement on March 14 by Republican Gov. Kevin Stitt that Oklahoma had joined Arkansas and Louisiana to establish a regional hub for the development, production, distribution and use of clean hydrogen as a fuel and for manufacturing feedstock.
“Oklahoma is honored to join in forming this partnership, not because of convenience, or necessity, but rather because we share a similar vision and goals for the production, use, and economic impact that can result from creating this hydrogen economy,” Stitt said in a media statement announcing the partnership. “Like our partners, we believe that creating as many end-use cases for commercialization with as many private partners is the quickest and best mechanism to spur real demand for this clean energy. The resources and opportunities in Oklahoma are complementary to our partners and tailor-made for a diverse hub application to compete with others around the country.”
The partnership – known as HALO – would authorize agencies in each state to “cooperate in the planning, studying and development of a regional clean-hydrogen hub.” That organization, if selected by U.S, Department of Energy, would seek federal funding for the hub and could partner with the Oak Ridge National Laboratory and DOE labs for hydrogen research.
The agreement would also include partnerships with the state’s tribal nations and the University of Oklahoma.
“At its core, this hydrogen hub will bring together stakeholders, including those from underrepresented communities, to enhance new pathways for this emerging technology that will benefit Oklahoma and the nation,” OU President Joseph Harroz Jr. said.
Creating a hydrogen hub, Montgomery said, could result in more than 4,400 direct jobs, with the potential to creative a total impact of about 19,500 jobs, and have an annual impact of $1.5 to $2.5 billion on our state’s economy.
“We are well-positioned as a state to advance in this area and help our country in the pursuit of energy independence, and these credits are two pieces of the puzzle to attract these businesses to Oklahoma,” he said.
While hydrogen itself is considered a clean-burning fuel because it only produces water as a byproduct, converting hydrogen to a useable energy source often includes other fuels including coal or natural gas.
Currently, about 95 percent of the hydrogen production in the United States uses fossil fuels. Additionally, hydrogen is difficult to store for future use, requiring compression and high-pressure tanks or liquification suing cryogenic technology.
Senate Bill 1857 passed the Senate 32-14 while the second measure, Senate Bill 1858 passed 35-11. Both measures have been sent to the House of Representatives.