Hydrogen holds great promise as an energy medium, but its fundamental properties raise significant complications. The lightest of all molecules, hydrogen is colorless, odorless, difficult or impossible to odorize, combustible, and necessarily maintained under significant pressure for most of its applications. These considerations give rise to critical questions about how a new hydrogen energy sector may be regulated from a safety and environmental protection perspective, how receptive the public and regulators may be with respect to siting and permitting hydrogen facilities, and what forms of risk and liability exposure may exist for the different players in a hydrogen economy.
Hydrogen Energy Scenarios. Hydrogen as an energy medium may appear in a number of different potential scenarios. There are probable uses in transportation applications, as well as for electric power. Hydrogen can be used to create power chemically with fuel cells or through combustion. Hydrogen can be produced from steam methane reforming (SMR) or through electrolysis, and possibly through a number of other novel means. While SMR necessarily requires the use of hydrocarbons, the steam source used to "reform" those hydrocarbons can come from fossil fuel combustion or from an alternative source of energy. Electrolysis can also use electricity derived from fossil or renewable sources. In the short run, however, it seems unlikely that we will produce hydrogen on a commercial scale for widespread energy applications without heavy reliance on fossil fuels (and their attendant carbon and other air emissions) in the production of that hydrogen. In addition, some hydrogen scenarios involve centralized production of hydrogen while others envision widely-distributed generation. These different scenarios for the use and production of hydrogen point toward a multiplicity of physical, technological, and environmental alternatives, all of which involve significant legal issues and risks.
Legal and Liability Considerations for Hydrogen Energy. One need only consider the massive number of regulations and codes that are already developed or on the drawing board to recognize that a hydrogen economy will exist in a tightly-regulated environment. And one need only consider the inherent risks associated with the widespread transportation and use of any type of flammable gases and liquids (but especially colorless and odorless ones!) to recognize the inevitability of liability issues for hydrogen. Considering both the anticipated regulatory environment and these liability issues, it does not require much speculation to recognize that the siting and permitting of new hydrogen facilities may face important procedural hurdles, as well as public and political opposition. The novelty of hydrogen as an energy medium on a commercial scale also necessarily raises important business logistics and transactional issues such as the availability of a sufficiently skilled and trained workforce, novel supply and distribution contracting issues, the availability and appropriateness of insurance and financing, and other issues that are fundamental to the success of most businesses that will be engaged in the creation and development of a hydrogen energy sector.
There are obvious and significant energy security and environmental reasons to pursue hydrogen as an important energy medium. But the optimistic sales pitch about "clean energy emitting only water vapor" and the enthusiasm of hydrogen's boosters only seem likely to approach fruition if the regulatory, siting, and permitting schemes that are developed are both strong enough to inspire public confidence and streamlined, marketadaptable, and wisely-designed enough to facilitate safe, cost-effective hydrogen project development in a marketplace which has yet to develop and which could evolve in a number of different and unpredictable ways. Similarly, the safety of hydrogen in commercial scale energy scenarios needs to be effectively demonstrated with a maximum of transparency and clarity and, frankly, a minimum of bad news.
The Message and the Path Forward. The discussion of these risks by reporters in the media, however, is often overdramatic to say the least. Prospective participants in hydrogen economy owe it to themselves to engage more effectively and meaningfully with the press on these issues – perhaps through a trade group or other organized body – to help combat exaggerated media depictions and to appropriately soften public perceptions about the relative risks of hydrogen. Developing and publicizing a clear, honest, and effective message about the safety – and the hazards – of hydrogen and about the measures being undertaken to ensure hydrogen safety will be critical. Any recklessness or, realistically, any unfortunate hydrogen-related incidents or accidents, have the potential to reinforce negative public perceptions, lead to liabilities that can impair the viability of companies pursuing hydrogen energy, and unduly alarm the mission-critical providers of services, insurance, finance, and investment to the incipient hydrogen energy sector. Careful progress and equally careful message control will be critical in overcoming any such actual or perceived obstacles.
New Scale, New Players, New Exposures. In moving from a world of specialized industrial uses of hydrogen at discrete, heavily-secured locations under the close watch of well-trained employees to a scenario involving much broader commercial distribution and consumer use and handling of hydrogen, the safety issues associated with hydrogen become much more acute. With respect to public perception of hydrogen, an explosion during a hydrogen delivery at a power plant is bad news; an explosion of a hydrogen vehicle in a residential garage would be catastrophic. And, simply put, as hydrogen's reach grows, so too will the opportunities for such incidents and accidents to occur.
As a flammable, explosive, colorless, odorless, and difficult (or impossible) to odorize material, hydrogen plainly presents unique safety considerations. Even though hydrogen may be as safe in many respects as natural gas or propane, and even safer than flammable liquids such as gasoline in many applications, its properties do pose difficulties that other fuels may not. Safety concerns about odorless, colorless natural gas have been addressed through the addition of mercaptan odorants and a massive public information campaign to highlight safe conduct whenever someone smells gas. In the hydrogen context, if an odorant cannot be developed that effectively disperses together with leaking hydrogen but does not foul fuel cells, one must wonder about the possibility of an effective public safety campaign for hydrogen. Perhaps commercialization will lead to the availability of cheaper hydrogen detection and alarm devices that could offer an effective substitute for odorants. In the meantime, however, prohibitions on parking hydrogen vehicles indoors, etc., may be the best way of guarding against fire and explosion risks from hydrogen leaks; such prohibitions, on the other hand, do not exactly inspire public confidence in hydrogen's safety. Clear explanations for this sort of dramatic safety measure ("though this is probably overkill, we're taking every possible precaution since these are new technologies," etc.) may be critical.
Public relations implications aside, safety measures of this type appear to be well-advised. Several recent incidents – including a hydrogen explosion with nine injuries and a fatality during a delivery of hydrogen to a power plant near Columbus, Ohio, a hydrogen fire and explosion at an industrial facility in Midwest City, Oklahoma, and explosions due to hydrogen build-up in a lab facility in Australia and in a battery room near Sacramento, California – all serve as reminders that hydrogen has undeniably hazardous properties that necessitate tremendous caution.
Environmental Benefits and Their Limits. In addition to the safety issues, further activity appears to be necessary with respect to the environmental benefits of hydrogen. To rely on "only water vapor emissions at the tailpipe" hype is to deny – and invite pointed and accurate criticism that – the short-run reality that hydrogen as an energy medium is likely to originate in polluting fossil fuel-burning production processes that might be even less energy efficient than simply utilizing that fossil-derived electricity directly. Getting all of the facts and developing a crisp message on the importance of short-run developments to achieving commercial scale hydrogen production and use may help justify the very limited near-term environmental benefits of hydrogen; and more realistic and potentially more effective explanations may help blunt some of the recent criticisms. Further study and policy work may also be warranted to conclusively address questions about increased emissions of water vapor (which, interestingly, is itself the most important of all of the greenhouse gases), both as an environmental actor and as a possible road safety issue.
The Lawyer's Role. Legal issues are likely to arise in connection with the ongoing development of laws, regulations, and codes that relate to hydrogen production, transportation, distribution, and use. Legal considerations are relevant to proper comment on proposed rules and are, of course, critical to effective legal challenges to such regulations. Such tools may be essential if we hope to achieve an overall body of regulation and codes that assure safety without draconian or inflexible terms that would depress hydrogen development. Legal thinking can also help address the liability issues associated with hydrogen, both in responding to situations and claims that may arise out of hydrogen-related incidents, but also in a preventive mode in which counsel can help companies identify mechanisms and measures to, among other things, better demonstrate "due care" that can serve as a defense to potential future negligence claims. Further, legal talent will be necessary to help effectively lay the groundwork for and push through siting and permitting activities, which themselves may involve legal proceedings and legal challenges. And the application of legal skills will be necessary in arranging critical business logistics including, among other things, negotiations and contracting for financing, insurance, leases, and the like. Companies engaged in hydrogen energy-related businesses will benefit from the early and effective involvement of knowledgeable counsel.
Conclusion. Broad new applications and an entirely new scale for hydrogen make this a pivotal and challenging time for companies pursuing hydrogen-related businesses. Organizing a potent strategic communications effort that develops and effectively deploys a persuasive and realistic message on hydrogen's benefits and risks will be a critical step in overcoming unfortunate media and public perceptions about hydrogen. And finally, careful assessment of and participation in statutory, regulatory, and code developments, preventive thinking about potential incidents and other contingencies, and thoughtful preparation for contractual and other business and public interactions on hydrogen with the advice of well-informed counsel will go a long way towards smoothing the path forward for hydrogen as an extremely promising energy medium.
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