Assembly Select Committee on Select Committee on Building a Zero-Carbon Hydrogen Economy

Good morning. We'd like to call this Select Committee on building a zero carbon hydrogen economy. Together with the topic today being hydrogen pipeline leakage, safety and construction. It is one of the most exciting and talked about topics in Sacramento. I'm joking.

When we've talked to people about this aspect of the hydrogen, it's not the same as when you talk about the three pillars or some of the other things that are out there. But it is equally important, which is why we wanted to make sure that we covered this today. So if we could have all of the panelists come up. We have chairs here any place. Last person here gets the least nice chair. Right?

We have another, better chair coming, I believe. Right. But it's just. Yeah. If those two would share their mic, we'd appreciate it. This meeting room is not designed for the kind of panels and the kind of conversations that we like to have.

But one of the things I want to point out is that we have a number of Members who. This is one of the busiest weeks for us. All of the committees are meeting, and people have to present their bills and committees. They also serve another Committee.

So most of the Members said they would be in and out sometime during this today. But the real value of doing this through the Select Committee process, rather than just having meetings, is that this is all going to be recorded. And that way everybody, we sort of have an official record.

And so the Select Committee has met twice, and we focused on different topics, and we would like to have a body of work. When we finish in August, we'd like to have a body of work with a Select Committee. Committees have covered all of the major topics dealing with hydrogen, hydrogen economy, and trying to move forward. I know we just had the hydrogen conference, and the hydrogen conference is a little bit different approach.

What we're trying to focus on here is to make sure we identify all of the issues legislators should be considering as they're considering legislation going forward, so that any Legislator who wants to do something on hydrogen now, in the near future, could look at these hearings and say, I'm interested in doing something on pipelines.

And what were the issues that were brought up by various experts in the room interested in guardrails or I'm interested in incentives. We'll have all of those various topics that will be covered.

So we appreciate your attendance here today and a few things that I want to make sure that I read to kick this off in terms of officially doing this. And we'll be discussing pipeline safety, leakage development, including the right of way and construction, blending and pipelines and a pure hydrogen pipeline.

The topic's going to be important because no matter what kind of hydrogen's put in the pipes, whether produced gasification or electrolysis, we have important questions to consider about what kind of standards those pipelines should meet. Although at different gas, there are lessons we can learn from our natural gas system.

Most importantly, how do we do everything possible to avoid repeating mistakes, leaks, et cetera? Today's panelists offer a diverse set of views. We have representatives from Southern California gas, air products, Environmental Defense Fund, the Pipeline Safety Trust, California State Building Trades, UC Riverside, which conducted the CPUC's study on hydrogen blending, and H2 Clipper, a pipeline company.

Now, unlike other hearings, we're going to conduct this as one large panel. Given the breadth of this single topic, I think it's important that we have all the participants weigh in on the General topic. I hope we have a healthy and robust discussion, and I'd like to invite any of you to feel free to offer an insight that is different from one that one of your colleagues presents or further illuminates or identifies a topic that we don't identify here today.

The idea today is to comprehensively get all of the points of view out on the table with our other potentially more contentious topics. We like to say that we wanted you to make your case in front of the opposition so that the opposition could counter, and then you could counter the opposition, because we feel like that is much better than what happens oftentimes.

The legislators is one stakeholder comes and meets with the Legislature, says whatever they want to say, and there's nobody there to counter it, and the burden falls on the Legislator to try to find out whether that was accurate, what to do about that, etcetera.

That's what we're trying to short circuit so that we get all the information out as efficiently as possible as we move forward. So I'd like to invite Aaron Murphy, the senior attorney for the Environmental Defense Fund, to jump up onto the screen. What's that? Okay. All right. So we will wait. Are we being recorded right now? Okay.

All right. So while we're waiting to try to get Erin on, we'll ask each of you to introduce yourselves, and we'll just start here and sweep around as we, as we do that. All right. Just introduce yourself and who you're with, and then we'll go back and have you do your opening comments.

Andrew Connolly, air products Vice President, General manager of Low Carbon Hydrogen.

Mark Mulliner California State Building Trades

Neil Navin I'm Senior Vice President of engineering, major projects and the chief clean fuels officer for Southern California Gas Company.

All right, and Neil, when you speak, you're going to need to be real much closer to that. Why don't you try it again just with your name?

Thank you, chair Bennett. My name is Neil Navin. I am the Senior Vice President of engineering, major projects and the chief clean fuels officer for Southern California Gas Company.

I'm Bill Caram. I'm the Executive Director of the Pipeline Safety Trust.

Rinaldo Brutoco. I'm the founder and Chief Executive Officer of H2 Clipper, the only company that holds patents with regard to moving liquid hydrogen as well as gaseous. We are not a pipeline company, though, chair Bennett. We are a technology company that permits other people to use our technology. Thank you.

Good morning. I'm Arun Raju. I'm a research faculty at the Center for Environmental Research and Technology at CSERT at UC Riverside. I'm also associate Director there. Arun, great.

Thank you very much. Appreciate that. And since this is an open panel, we will go through and just ask. We've asked each of you to be ready with three to five minutes of an opening to kick this off.

The General topic is, what are the issues that legislators should be considering as we consider the issue of pipelines in hydrogen? And that's as broad as we can be with regard to that topic. And in the interest of objectivity, we're just going to start and do it in the same order that you're seated here like this. And so we'll start with Andrew.

Mister Chairman and Committee Members. Thank you very much. I'm Andrew Connolly, Vice President and General Manager of Low-Carbon Hydrogen for Air Products. Been with Air Products 35 years. I actually started out early on my career in California.

I was a young engineer back in the mid nineties when our products put its first hydrogen plants and distribution system together in California. At the moment, I oversee approximately $10 billion of investment in the Americas in low carbon hydrogen, and it's a pleasure to address the Committee.

Air Products is the only us based industrial gas company and is the world's largest producer of hydrogen. We have about 110 hydrogen production facilities and over 700 miles of dedicated hydrogen pipelines globally. We've been in this business for more than about 80 years, and in the hydrogen business for around 65 years.

Air Products is investing globally around $15 billion by 2027 in clean hydrogen projects around the world, which are there to drive the decarbonization of other industries in the US. There are around more than 1600 miles of dedicated hydrogen pipelines, which would develop to support current markets that use hydrogen.

The production facilities and these pipelines that deliver hydrogen have been installed, owned and operated by the private sector in competitive markets safely for decades, responding and reacting to clear market signals and market demand.

As new market signals are being developed and implemented, the private sector is already committing an unprecedented amount of money in new hydrogen investments to support remaking our global energy infrastructure. With the focus on transitioning our global economy away from fossil fuels, producing climate change and greenhouse gases, there's a tremendous focus on hydrogen's role decarbonizing our economy.

While we continue to appropriately, directly electrify many sectors of the economy, global experts agree that clean hydrogen is best deployed in hard to abate sectors of the economy, primarily heavy duty transportation and heavy industry.

Because clean hydrogen is more costly, even with subsidies, than in common energy sources, it is critically important to deploy it where it drives the greatest environmental benefit. This occurs in the aforementioned heavy duty transportation and heavy industry sectors of our economy.

Excuse me. I'm gonna ask you to bring the microphone a little bit closer, and when you turn away from it, we lose you quite a bit .That's better.

Okay. Those sectors also impact some of the frontline communities which are in and around the heavy industry and those transportation routes, helping to abate public health concerns associated with emissions.

Technical issues aside, blending clean hydrogen into natural gas grid, we believe is a suboptimal use of clean energy in a sector of our economy that will either be electrified in the case of commercial and residential heating, or will be served by the private sector when there are appropriate market signals in the heavy industry and power generation.

During the Q and A period, I'm happy to answer more specific questions regarding the merits of blending into natural gas pipelines. Currently, private industry is investing billions of dollars in the production, distribution and dispensing of clean hydrogen into these sectors, complementing federal and state government regulations and incentives.

Air Products is the largest producer of hydrogen in California and the only company to own and operate a dedicated hydrogen pipeline system in the state are pleased to support the statewide efforts to expand clean renewable energy. Hydrogen are used in targeted parts of the economy that cannot be served by electrification.

We are founding partners in arches, the state's renewable hydrogen hub, and have dedicated capital along with dozens of other private competitive companies to commit to the overall success of market liftoff. California has a strong track record of getting it right when it comes to the green economy.

One of the key next phases of our state's green economy is leveraging the existing efficient hydrogen market and enabling new clean hydrogen demand deployments through a competitive market framework. It is important to note that California is home to one of the largest hydrogen markets in the United States, second only to Texas.

This market was born out of the need to meet clean fuel standards set by CARB decades ago. There is a history of strong hydrogen market with its co-commitment infrastructure along with the state's effective leadership around green energy markets and is ideal to scale clean hydrogen deployment.

Thank you Mister Chairman, for inviting me to participate today and I'm happy to take any questions from you and the Committee.

Thank you. I think we'll hold the questions until we have all of the presentations.

But before we go to Mister Mulliner, I think if we invite Erin Murphy to speak, she will show up and I wish I could show up just that easily too, but Erin, would you please introduce yourself and hopefully then you'll show up on our screen.

Yes. Hi, can you hear me? Okay, we can.

And there you are. You've just shown up. Scotty beaming you down, right?

Hi, yeah, I'm Erin Murphy. I'm a Senior Attorney with Environmental Defense Fund in our energy markets and Utah regulation team. I'm normally based in Washington DC, but I'm phoning in from Berlin right now, so really appreciate the opportunity to participate remotely.

All right, great Erin. And we will ask you to speak after we were working our way around and you just happened to physically end up all the way to the far right.

So you'll be our last General introductory comments and then, then we will open it up where anybody can answer questions as we move forward and as we ask those questions. Thank you for being here. We really appreciate it and we appreciate all of you being here. Mister Mulliner, good morning.

Thank you for allowing me to be here today. I am a construction worker. I'm a united Association Member. Been a Member for 32 years. I started out on pipelines. I actually built 800 miles going from the Canadian border all the way to Fresno. The PGT pipeline, that's what got me in the industry in 1992.

Had it not been for that project, I wouldn't have been fortunate enough to probably get in the union and learn how to become a pipeline helper, welder, apprentice. I've welded, I built hydrogen plants in the Bay Area and I've welded pipelines. And the thing that I'm here to carry out is the training and the skills are there.

The ability to weld. Hydrogen pipeline is there. Hydrogen pipeline is a lower carbon type pipeline. From everything that we're studying, that everybody is investing in making sure that we get this right.

But the number one thing that I know is going to make it right is to have a skilled and trained, a well trained and an organization that cares about the environment. Like the state building trades and our affiliates are those people to install these pipelines and to build the facilities.

As this economy and as the hydrogen grows, our number one priority is to help industry. And industry is already starting to change over a lot of power companies and everybody is going to try to help facilitate the economy, the clean air and the clean energy economy that we have to have.

But it has to be a multifaceted, utilized every facet of the industry to make it happen. And so with a skilled and trained workforce, with union labor, our apprenticeship programs, everything that we've been doing for the last hundred years, we are ready to do that. And that's why we're here. Thank you.

Thank you, Mister Navin.

Good morning, Chair Bennett. It's a pleasure to be here. Thank you to the staff and my fellow witnesses. Again, my name is Neil Navin. I'm the Chief Clean Fuels Officer for the Southern California Gas Company. SoCal gas is the largest gas natural gas distribution company in the western hemisphere.

We've been serving California for approximately 160 years and we are a privately owned investor owned utility first and foremost. I wanted to thank the Committee for this Important conversation on connecting infrastructure infrastructure is going to be key to delivering on the promise of hydrogen.

The State of California, the nation, and indeed the world has an enormous task ahead of it. It's going to take us, government, industry, community at all levels to unlock the promise of deep decarbonization through hydrogen. To put this into context, a global context, the Kyoto protocol was signed in 1997.

We are exactly midway between that point and our mid century ambitions to be carbon neutral, GHG neutral. So the time is now, and we need hydrogen as one of those tools to help accelerate the energy transition. Indeed, to get to greenhouse gas neutrality, we need an unprecedented technical, economic and political change to make this take place.

SoCal gas is active in numerous hydrogen projects to demonstrate decarbonization for California. Angeles Link is one of our largest. It is our proposed project that could be the nation's largest clean fuel, renewable hydrogen open access pipeline system, delivering clean molecules to central and Southern California.

Our vision is that Angeles link can be a key connecting infrastructure element that could unlock the ability to decarbonize the hard to abate sectors of the economy, electric generation, industrial processes, heavy duty trucking in other sectors. I'm pleased to note that our phase one work, as directed by the CPUC, is currently underway.

We are performing engineering design and feasibility analyses. The studies include supply hydrogen supply demand, end use, pipeline configurations, environmental considerations, workforce planning, project alternatives, right of way analyses, safety and leakage studies. Our work on safety has taken place with the assistance of the Hydrogen Safety Council, a recognized leader in hydrogen safety.

The study will note, and when it's published, the numerous national and international standards that must be applied when developing pipeline infrastructure. And it will also note the availability of detectors and other measures that we plan to deploy when we build this infrastructure, including the opportunity for technologies like fiber optic detection.

Our work on leakage study has taken place with input from the National Fuel Cell center located at the University of California, Irvine and we intend to publish all these studies towards the end of the year.

The studies have been shared with a planning and advisory group, a participation group including community based organizations, to make sure we get early feedback on the work that we're doing. This work is being done in conjunction with our efforts to support arches.

We are a Member of arches, like others on the panel, and we are proud to support the state's efforts to capture federal funds to support the energy transition. Blending of hydrogen is another project that we're working on, as again directed by the CPUC in conjunction with the other gas utilities in the state.

Blending of hydrogen can be a key enabler to unlock demand in the market. Importantly, as recently as Monday, CARB has noted that hydrogen blending is part of their overall strategy and plan to unlock potential tools to decarbonize the state's energy system.

Importantly, if a mere 20% of the natural gas system were replaced by hydrogen, it would be the equivalent of removing 1.5 million gasoline powered cars from our roads. We are blending.

Demonstration projects will be performed again with UCI, also in a city called Orange Cove, which is in the San Joaquin Valley, and we intend to demonstrate hydrogen blending in California system. It's important to note that blending of hydrogen takes place around the world. In fact, it's as near as Hawaii.

Hawaii gases gas system has between 12 and 15% hydrogen and has since 1974. In fact, if you have a burger cooked in Waikiki, it has been cooked on hydrogen since the seventies.

I want to note also that hydrogen blending and the opportunity to blend to help decarbonize the broader energy system is also taking place in the UK with significant trials there. And I'll just quote the Governor that the hydrogen economy is the future and necessary for the State of California. I want to thank you for your time.

I look forward to your questions.

I want to thank you. I understand you had quite a travel schedule, being here for the conference on Monday and then back and forth. So appreciate you making the extra efforts.

In terms of that, I'm going to just ask one quick question, just to clarify something I heard, and I want to make sure I understand before we go on. And when you said open access, could you clarify what you mean by open access?

Certainly, I'd be happy to do that. So the open Access pipeline essentially is a non discriminatory pipeline that would allow any producer or in fact any qualified off taker to take service of that pipeline. As noted by the first witness, there are hydrogen pipelines today in the United States.

Most of those are merchant pipelines that would otherwise deliver to a single customer. A non discriminatory open access pipeline would allow all producers to have access to that. It is similar to the natural gas network.

Wanted to make sure we clarify all of our terms and I'll ask some questions where I know the answer, but I want to make sure we get the question out there for people in terms of doing that. And so we now move on to Mister Carr.

Thank you Chair Bennett and the special Committee Members and staff, for inviting me to speak today. My organization, the Pipeline Safety Trust, was formed after the Olympic pipeline tragedy stole the lives of three boys in Bellingham, Washington.

In 1999, the US Justice Department was so aghast at the negligence of the pipeline company and the lack of oversight from the government that it asked the courts to set aside money from the settlement to create the pipeline safety trust.

As an independent national watchdog, our vision is for no other community to endure the senseless grief that Bellingham had to experience from a pipeline failure. Unfortunately, we still have a lot of progress to make. In fact, 2023 was the deadliest year for pipeline safety in America in at least a decade.

Given that we aren't making real progress on pipeline safety for natural gas pipelines, expanding a relatively nascent pipeline product such as hydrogen gives us pause. We urge great care and discernment when creating policy that will affect pipeline transportation. In 2022, we commissioned a report on pipeline hydrogen pipeline safety.

Included in the report was a description of the current State of hydrogen pipeline infrastructure and regulations, information about the physical properties of hydrogen, and a list of policy and research recommendations. The pipeline and Hazardous Material Safety Administration, or PHMSA, has minimum safety regulations on hydrogen pipelines, but they are not sufficient to protect people in the environment.

There are more robust standards, such as AFSCME's industry produced b 3112, but this standard is voluntary. When it comes to hydrogen blending, the regulations are entirely inadequate. For example, operators only need to report the predominant product in a pipeline, meaning until hydrogen reaches 50%, the regulator would be unaware of any hydrogen blending.

PHMSA has recently proposed operators begin reporting this information, but that process is still in its early stages. There are no regulations addressing the unique risks of hydrogen blended pipelines. There are little, if any, specific regulations about conversion of service from methane to hydrogen or a hydrogen methane blend, a critical safety issue that should be strictly regulated.

Among the unique physical properties of hydrogen when compared to methane are the much larger explosive range, about seven times larger, more complete combustion and hotter fires from explosions, invisible flames from combustion and daylight, and a much smaller molecule than methane. While more research is needed, some studies show hydrogen leaks at faster rates than methane.

This is important from a safety perspective, as leaked gas can migrate underground and accumulate in confined spaces before exploding. But it's also important from a climate perspective. Since hydrogen is a potent, indirect greenhouse gas. Hydrogen can cause a host of integrity issues in pipelines such as embrittlement and cracking.

More research is needed to fully determine which materials are and are not appropriate for hydrogen service, as well as what conditions lead to embrittlement and cracking.

Leak detection technology for hydrogen, crucial to maintaining safe pipelines and protecting communities is far behind the technology for methane and won't be able to meet the five parts per million standard proposed by PHMSA in its recent leak detection and repair notice of proposed rulemaking.

The creator of the formula for the potential impact radius calculation to determine the blast zone around the pipeline has said the formula for hydrogen pipelines is not accurate and needs to be reworked through the analysis. In our paper, we reached several conclusions. Among them, blending of hydrogen into gas distribution systems should not be permitted.

These systems present a risk of hydrogen entering people's homes and businesses through internal piping not designed for hydrogen blends and outside the jurisdiction of pipeline safety agencies. Likewise, blending of hydrogen into gas transmission pipelines that serve gas distribution systems should not be permitted.

Repurposing existing gas transmission pipelines that serve as only industrial users may be appropriate once particular knowledge gaps can be resolved and operators can demonstrate that each component in the system is appropriate for hydrogen service, and new, smaller diameter hydrogen transmission pipelines may be suitable if knowledge gaps can be resolved, pipeline integrity can be demonstrated and pipelines can be cited to ensure that failures will not result in deaths or injuries.

Hydrogen has about one third the energy density of methane by volume. Therefore, a 10% blend of hydrogen will only see an approximate 3% reduction in greenhouse gases. If the hydrogen is leaking at a faster rate than methane, that will reduce the greenhouse gas savings even more.

Given the integrity issues, the inappropriateness of many homes and businesses, internal pipes and appliances to handle hydrogen, not to mention the pipelines and components themselves, the greater range of flammability, the knowledge and regulatory gaps, please take seriously the risks you're asking communities to bear, especially our most vulnerable communities, who all too often bear the brunt of the safety risks from our energy infrastructure.

Thank you very much. And you remind me why we're having the Select Committee, and I want to contrast this with the hydrogen conference that we were just at.

ToPiCs as controversial as the distinct as the difference in opinion that you have with others who support blending is exactly what we need to get out in the open and have Frank, public conversations about. Really appreciate you taking the time to be here, and we will have more questions about that. And Mister Santa Barbara, thank you.

Thank you, Chair Bennett. And thank you, Steph. My name is Rinaldo Brutoco, and I'm the Founder and Chief Executive Officer of a company called H2 Clipper, Inc. When I did my last major book on renewable energy.

You need to bring the microphone closer to you, please.

When I did my last major book on renewable energy, which was in 2007, I concluded in the last chapter that hydrogen was the solution to replace fossil fuel in a major way. And we don't see it as an either electrons or molecule approach. We think both are going to be required.

And I've even started a series of articles which is labeled. The 10 articles are labeled the hydrogen. Basically false dichotomy. It's not electrons or molecules. It's both in which we go through each individual application of hydrogen to see where it fits as either an electron into the grid or as a molecule.

We currently certainly do agree that hard to abate sectors, cement, steel, clearly are going to go hydrogen. Clearly locomotives are going to go hydrogen. It's already happening globally. I'm working on a report right now for the Canadian government, which they're developing a plan to commercialize hydrogen trains all over Canada.

We'll be taking delivery of our first hydrogen locomotive soon. Here, the one in Switzerland, just set a record. It went for over 2000 km, over 2000 miles, actually, without refueling, on gaseous hydrogen.

I share that with you because our company has developed a tremendous number of patents, 16 so far, more in the works on both liquid hydrogen and gaseous hydrogen. And what we've targeted on is the movement of those molecules. So we don't want to ever compete with someone who's creating green hydrogen. We want to enable them.

We don't want to compete with somebody making pipelines. We want to assist them to be safer. We just completed a test, which I've brought a copy with me. Chair Bennett, I can leave with you. With one of the largest public companies in the hydrogen space.

We were paid to do a test, a substantial underground test that lasted nine months. The report was just released a month ago, and we're just now getting copies out. EDF got theirs just like a week ago. I gave Neil his copy this morning. And what it says is two things.

Number one, it says that it will never be economically desirable to capture all the hydrogen that will permeate or leak from every certified carrier pipe in the world. Now, we maintain a database at h two clipper, because we don't manufacture pipe and we don't install pipe. We think the unions should, by the way.

And so we work with engineering firms that have installation capability and we help them design systems. So we definitely promote union activity, and we promote developing the safest possible technology for pipes. So we maintain this database on European pipes, American pipes, et cetera, Greek pipes. Several conclusions come to the fore.

One of them is all pipes leak, which I think everybody here knows. The problem is, we thought that was okay with methane, and we didn't address it on the front end, and you should address it here on the front end in California, and here's why. It isn't economically viable to capture the last molecule of hydrogen.

But it's a terrible safety hazard if you don't the standard's terrible thing. Safety hazard. What?

The test we just concluded for a large public company in the hydrogen space says that within one week, a pipe certified by the Savannah national labs, a specific pipe, the exact one they certified, was put in the test, and it got leakage of 40,000 parts per million within one week, flat. Now, 40,000 parts per million, that's combustion.

So there's no conceivable way that anyone should be allowed to put a hydrogen pipe in the State of California, which does not have the following features. Number one, full containment has to be a safety pipe.

Number two, it has to have a sweep gas technology so that every single molecule can be gathered up and not a single one gets to the atmosphere. Number three, it has to have continuous monitoring. Not occasional, not, not. Maybe you will look once a month. Instantly. Instantly, instantly by instant.

It has to have monitoring, and it has to have remote shut off. Those are the technologies we patented globally. That patent, I think, came in just last September, and we are now in the process of helping people understand that standard has to be written into law. We're fairly comfortable it's going to get into law.

It's already being proposed in several European countries. I believe it'll get into law in California for the simple reason there's no reason not to do it. And I want to point out to people in California, we discovered that we were too loose on methane in the front end.

And we also realized we were too loose on underground tanks for gasoline stations. And so we passed a rule which said, if you got underground tank, gotta be double wall containment, et cetera, et cetera, et cetera. The law passed, but they exempted natural gas. Why?

Because the industry was so entrenched that they felt, I guess, for political reasons, we couldn't go back and change it later. And I know from a couple of conversations with Fred Krupp at EDF, he thinks that shouldn't be allowed to happen in California or anywhere else in the United States.

And I'd be happy to address any and all of these issues in the question period.

Thank you very much. And we have two speakers left. Mister Rahu, I hope I pronounced that right.

Raju. Thank you. Yes. Hi, again. Thank you, Chairman, for the invitation. I'm Arun Raju. I'm with UC Riverside. My research is primarily focused on renewable fuels, particularly hydrogen. I'm sorry, I didn't hear you.

What kind of fuel?

Renewable fuels. Okay, got it. Particularly hydrogen, both from the perspective of hydrogen's impact on materials and also on the environment, but also planning for production and use of hydrogen, planning for hydrogen infrastructure, especially for the transportation sector.

I was also on the steering Committee for California Council on Science and Technology's report last year outlining California's significant energy challenges, which has since then been updated. And as you mentioned earlier, I was the principal investigator for the UC Riverside study sponsored by the PUC to evaluate the impact of hydrogen blending on our natural gas infrastructure.

So I'm going to focus a lot of my comments on that aspect, but I do want to take a step back before I get into that, you know, kind of provide a big picture view of the justification to pursue hydrogen production and use through all possible avenues.

We are going to be going through a fundamental transition of our energy system over the next two to three decades from the resources, from infrastructure, and from end use equipment perspective. We're going to be decarbonized fully by 2045, and a lot of that will be done through electrification.

And electrification is the path to go for many applications, and we see that already in light duty transportation and some of the other sectors. And the building sector is also getting electrified. But right now, if we look at our energy infrastructure, there's three major networks.

One is the electric grid, the other is a natural gas infrastructure, and the third is the oil infrastructure. The what? Petroleum. So these offer quite a bit of dynamic system reliability, resiliency and redundancy for the economy. And there are some end uses that are going to be very difficult to electrify.

This include some industrial uses where heat is needed, or chemical production or heavy duty transportation, marine fuels. So for those, and to keep the reliability and resiliency of our infrastructure, we do need to have a fuel as an energy carrier and infrastructure for that fuel. And right now there are multiple options available, including biofuels for some purposes.

But hydrogen probably offers best opportunity to address all of those needs and to be that energy carrier and also as a chemical production feedstock, but also, more importantly for long duration energy storage that cannot be accomplished by batteries.

So for all of these reasons, it's important that we pursue hydrogen production and use and integration of hydrogen into our energy economy through all the possible avenues. And to do that, of course, we need a hydrogen infrastructure.

Right now, the infrastructure we have is limited primarily to industrial purposes, and all the hydrogen is produced from fossil natural gas but what we really need to do is to produce renewable hydrogen, green hydrogen, and be able to use it for all these different applications.

To do that, we can either build custom hydrogen pipelines, or we can try to blend hydrogen within the existing pipelines. Both approaches have advantages and disadvantages and challenges associated with them building a hydrogen brand new pipeline.

Of course, we can avoid some of the material related concerns or issues that hydrogen has, and I'll get into them in a little bit. And we can potentially eliminate or mitigate a lot of the leakage, which is a major concern as well.

But it also going to be much more expensive, but perhaps a little bit slower, but I think more importantly cause land use conflicts, conservation related concerns and issues. So those are the pros and cons of building custom pipelines.

Right now, we are mostly transporting hydrogen besides the existing air products pipeline through by trucks, which we should try to avoid. So the second approach, blending hydrogen into the existing natural gas infrastructure, it offers some advantages. One is it is likely to be much more cost effective than building a hydrogen infrastructure from scratch.

Second is it offers potentially an expedited pathway to integrate hydrogen into our energy mix in the near future. But there are a number of concerns, and I think some of the panelists have brought up those concerns. So the UC Riverside study looked at different aspects of these concerns. One is leakage.

The second is the effect on materials, both metals and nonmetals, and the transportation and distribution system. Natural gas infrastructure has a very broad range of metals and nonmetals. And on top of that, we also have a pretty diverse range of equipment and instruments and other policies and procedures to maintain and operate them.

We also looked at what percentage of hydrogen can be blended into the natural gas infrastructure. So I'll go through those briefly, one by one, each of those topics.

We'Re past. Can you do that fairly quickly? Okay.

Yes. So I'll just highlight each item. So, with respect to leakage, hydrogen being a small molecule, it does leak much faster than methane, and the higher the hydrogen in a mixture, it will leak faster. But hydrogen does not leak preferentially. It does not leak what? Preferentially?

Meaning hydrogen will not leak just by itself without the methane from a pipeline. And from the material side, hydrogen does have a negative effect on the strength and performance of many of the materials used in the infrastructure today. And we need to better understand the impacts.

In terms of the percentages, I think up to 5% hydrogen can be blended right now without serious upgrades or modifications to the system. And five to 20% seems feasible. Anything higher than that we need a lot more research.

So our recommendation is to do this in pilot projects in isolated segments or safe locations and then proceed to a statewide blending standard. Thank you.

Thank you very much. Appreciate it. There are so many topics here we could spend all day on each one of them. We're going to now move over to Miss Murphy and three to five minutes, Miss Murphy, for the issues you want to highlight, for the Legislature to consider as we consider legislation.

Thank you. Hydrogen pipelines, I'm sorry.

Absolutely. Thank you. So, my name is Erin Murphy, and I'm a senior attorney at Environmental Defense Fund. Hydrogen and methane are distinct molecules with unique properties and behaviors. So when we're considering pipelines and other infrastructure to transport and store hydrogen, we cannot assume that natural gas infrastructure and existing oversight frameworks are immediately transferable to hydrogen.

Caution is needed to ensure that hydrogen is deployed and transported both strategically and safely. I'm going to walk through three points quickly during my introductory remarks. First, that leakage from hydrogen pipelines must be managed carefully. Second, that hydrogen pipeline oversight is still developing at the federal level. And third, that hydrogen methane blending raises numerous concerns.

First, to speak to leakage, hydrogen acts as an indirect greenhouse gas, and its emissions into Earth's atmosphere contribute to near term warming of our climate. Hydrogen triggers chemical reactions in the atmosphere that increase the amounts of the potent greenhouse gases, methane, stratospheric water vapor, and tropospheric ozone.

Over a 20 year timeframe, hydrogen has 30 times the warming power of carbon dioxide. So if not designed properly, hydrogen production, transportation like pipelines, as well as storage and end use infrastructure, can all emit hydrogen into the atmosphere and therefore warm the climate.

There are limitations right now in the abilities of hydrogen-sensing technologies and analysis, and because of those limitations, we don't have a great understanding of the level of hydrogen leakage that is occurring from pipelines and other infrastructure.

However, we expect hydrogen leakage to generally be equal to or greater than methane leakage from pipelines based in part on hydrogen's small molecular size as well as leading analysis.

Just as California has been a leader in mitigating methane emissions from natural gas pipelines, in part through implementation of SB 1371, leadership will be needed to minimize hydrogen leakage from pipelines. Next, I want to speak briefly to the developing federal oversight of hydrogen pipelines.

So, PHMSA, the Pipeline and Hazardous Materials Safety Administration, which is a sub agency of the US Department of Transportation, has oversight of pipelines to ensure their safe operation, and that safety oversight includes ensuring environmental protection.

So there are existing pipeline standards in the Code of Federal regulations at parts 191 and 192 apply generally to pipeline transportation of any gas, including natural gas and hydrogen.

However, to date, hydrogen pipelines have made up a very small fraction of total gas pipelines in the United States, and therefore, the standards have been more tailored to natural gas just in that we have more information and data about natural gas pipelines.

And to give you those numbers, we have about 3 million mile of natural gas pipelines that includes distribution, transmission, and gathering pipelines. And we have about 1600 miles of dedicated hydrogen pipelines in the US. Also, those 1600 miles of hydrogen pipelines are operated by a relatively small group of companies.

There are 31 total operators, and three companies operate 90% of the hydrogen pipeline miles. So there is a need for safety and environmental protection standards for both hydrogen methane blended pipelines, where there's also a lack of clear and specific standards at this time, and for dedicated hydrogen pipelines.

EDF and allies have called on PHMSA to develop hydrogen-specific minimum pipeline safety standards so that there are distinct standards that apply to natural gas pipelines and to hydrogen pipelines in light of the distinct properties of the two molecules and some of the distinct needs around the safe operation of those pipelines.

And so we hope to see PHMSA move forward with the development of standards that are more specific to hydrogen.

I think Bill Caram with Pipeline Safety Trust mentioned that PHMSA has taken a very preliminary step with a new information collection notice that would require gas pipeline operators to publicly report any hydrogen being injected into existing natural gas pipelines.

We think that's an example of a key sort of step forward that is needed at the federal level as oversight begins to be developed that's more specifically focused on hydrogen infrastructure as it's built out. Finally, I want to make the point that hydrogen methane blending raises a number of concerns.

I think I'm over time, so I'll summarize this one quickly. I'm happy to get get into it during the discussion.

But injecting hydrogen into existing natural gas pipelines raises issues with safety, climate as well as air quality concerns, because combustion of a hydrogen methane mixture could potentially increase NOx emissions, which can have harmful health impacts for nearby communities. And pipeline networks that are designed and maintained to transport one gas natural gas will require careful maintenance and likely significant investments in planning to prepare to transport a different mixture of gas.

One of those concerns is around leakage, where if you start blending hydrogen into the natural gas system, you see a possibility of increased leakage.

And then final thought there is that because hydrogen has a lower energy density than natural gas, blending hydrogen into the local gas distribution system achieves minimal greenhouse gas emissions reductions, about 6% greenhouse gas emissions reductions for a 20% hydrogen blend by volume.

And so as a preliminary step, when it's not a full pathway to decarbonization for the building sector, where we expect to see electrification really be the ultimate pathway to move off of fossil fuels, blending as a preliminary step doesn't necessarily make sense in light of the costs as well as the safety and climate concerns.

Thank you for the opportunity to speak.

I want to thank all seven of you and this highlights for me, just listening to the seven of you and the diverse opinions that we have here, how important it is going to be for the Legislature to make sure all the stakeholders have input. But we need industry, labor, environmental groups, community groups, ratepayer groups, safety experts.

We need the best input from all of you if we're going to digest just the topic of pipelines with hydrogen, as you can see, but with the whole issue, we're making the most dramatic transformation in California's history.

I mean, you won't find another time when you'll say something as dramatic as the complete changeover of our energy system from a fossil fuel system to a non-fossil fuel system. That is fraught with so many complications. We need the best of everybody.

So I encourage us all to commit to trying to work collaboratively and not oppositionally with each other, to respect that everybody has a legitimate point of view. We need all of you and we need the input from all of you as we move forward.

And with that, I'd like to welcome and introduce Assemblymember Cottie Petrie-Norris, who is the Chair of the Utilities and Energy Committee and she is digesting something right now. But I wanted to give you a moment. We're-- just so you know where we are in this part of the program.

After you do your brief introduction and any introductory thoughts you have, we have a series of things that we're going to try to do almost like a rapid fire so that we get everybody to give us an opinion on and try to nail some of those things down. Please feel free to jump in anytime that you want.

What I was going to say to all the members is that I'm trying to make this less of our, our commentary and more of pull out information for them. So questions that you have, et cetera, jump in any time. This is going to be fairly free form.

We're going to try to maximize the amount of information that we can get out in the time period that we have. So welcome and thank you so much for being here.

Well, thank you, Mister Chair. And thank you to all of our panelists for joining us today. As the Chair highlighted, we are at a moment of really monumental transformation for the State of California and really for the country and for the globe.

We have some incredibly, incredibly ambitious climate goals before us with timelines that are approaching really, really quickly. And I think we recognize that we've got an enormous challenge on our hands to actually deliver. I think sometimes as policymakers we can set goals.

We kind of do the press release and then kind of think we can wave a magic wand to make it so. And it turns out that when we're talking about trying to deliver on our climate goals, we are fresh out of magic wands.

And in order for us to actually make these goals a reality, we, as the Chair highlighted, we need everybody at the table working together to solve what are really, really hard challenges. So none of this is simple, none of this is straightforward.

That's why we're really grateful to have you and your expertise here and just once again appreciate you Mister Chair, for convening us and for continuing to dig deep and do the work that we need to really solve these problems. So looking forward to the conversation. Thank you.

Great, thank you so much again for being here. And like I said to everybody, we have, we just got to thank for Mr. Hart. He's in two committees stuck. He hopes to get here before this ends. We have Committee members that hopefully will be able to catch up on all this.

So I'm going to ask your help in trying to do this fairly quickly in terms of trying to get some of the key information out. So if you can keep your answers as brief as you can, participate only if you feel like you have something specific to add.

All of you don't have to address each one of these issues as they come up. But I think if I had to rank all of the issues that we should be paying attention to, we have to go to safety first.

And then I've heard differing opinions about the issue and I'm going to take the biggest safety issue, which is explosions. So how explosive is hydrogen? You referenced that, Mr. Caram, that, you know, pretty significant explosive potential out there. Other people have other comments about that.

I won't tell you what I've heard, that hydrogen escapes into the atmosphere so fast that it doesn't get a chance to build up. So could you explain the explosive potential from your perspective and anybody that wants to offer a different one, I'd like to hear that, but as quickly as you can. Short explanation of that, please.

Sure. Yeah. Thank you Chair. So methane has an explosive range. The concentration in the atmosphere where it will ignite is 5-15% and hydrogen is 4-75%. So a much larger range of concentration will lead to an explosion. Once it does ignite, it has a much faster, more complete combustion than methane.

A recent study found that hydrogen can catch fire 13 times more easily than methane. So that gives you a sense of the explosiveness. It is much lighter and does escape to the atmosphere much quicker than methane.

However, when you were talking about pipelines that are underground, certain infrastructure on the surface, like concrete or certain types of soil, can lead to underground migration, and it can find confined spaces, like basements, to accumulate. So it is still an issue.

Great. Thank you. Let me ask you a very specific question. If you have hydrogen in a tank, and that tank gets a puncture in it, well, that hydrogen we're talking about on the freeway, somebody's driving with a hydrogen truck and there is somebody shoots a bullet into that.

Will the hydrogen escape fast enough into the atmosphere that it's above the 75% concentration and not be explosive? Or would that come out as a flame, or would that turn into an explosion from your perspective?

I think others on the panel can probably speak to that a little better, but I would imagine it could be any of the above, depending on a range of conditions. One other aspect of hydrogen, because of all these things I mentioned, it doesn't need as much of an ignition source as methane. It can spontaneously combust as well.

Thank you. So we're going to go 1, 2. Anybody else want to participate on this explosive question? Three. All right, go ahead.

So I think good points on hydrogen. With any chemical--

You have to stay close to your microphone. Sorry.

With any chemical, no matter what it is, the key is prevention of leak to begin with. That's where this really starts. And then that comes back to, if you're going to do something, that the system is engineered to do it, that there's a robust regulatory framework. We have the PHMSA of regulations.

You then have expertise, and you're specifically designing that system for the molecule that you intend to manage. It's prevention. And there's a combination there of regulation that sets a base foundation. Overlaid with that is experience, which says, okay, we're going to go above and beyond that.

We're going to exceed those regulations in this area because we have very specific expertise. But the absolute key to preventing concerns over any kind of energy release is not having it to begin with.

Great, thank you. Any disagreement with this explosive characterization? Because you're talking about a solution and I'm talking about that. Go ahead, Mr. Brutoco. It doesn't do you any good to speak, if you're not--

The evidence is overwhelming and neutral that if you fire a bullet into a hydrogen tank, typically all hydrogen tanks and cars currently are 10,000 psi, you will not get an explosion. That's not the problem with hydrogen. I think the problem with hydrogen is what EDF is going after, which is leakage up in the air.

It's the concentration below ground that will happen. And it's that at 40,000 parts per million in the test we completed, we achieved that level in one week flat. Think about it. A 30 year pipeline with explosive capability within the first week of operation.

So it's clear to me it is unsafe to put a hydrogen pipeline in California, totally apart from shooting bullets at it. And we can talk about what would happen if a backhoe hit a hydrogen pipeline as well, if you like, because that's the nemesis of utilities.

Thank you. No disagreement with the explosiveness characterization, except you're adding your view on a bullet going into a tank, correct?

The bullet going into the tank, which is what you asked, will not explode. There are other things going to happen.

And final speaker on this.

Yeah. Thank you, Chair Bennett. What I would suggest is that the Federal Government is deploying $7 billion to stimulate hydrogen hub activity. There is a robust federal effort to continue with the development of existing standards. The existing standard regiment is quite robust, but there is a recognition that that will continue as we deploy more and more hydrogen.

So I would suggest, just lastly, the safest and most efficient way to move molecular energy like hydrogen is in a pipeline. That is why we do it today.

Great. Thank you. So that's helpful for me. An agreement there is an explosive potential, and quite a bit of the solution is prevention. Same thing as we do with our natural gas pipeline right now. I'm going to be jumping quickly various places, but you just butt in.

And perhaps taking a little bit of a step back. I'm not clear, are we, in California, sort of solving these-- answering these questions and solving these problems for the first time?

It was my impression that whilst the feds have $7 billion of incentives, while we know hydrogen is a nascent industry, that many other countries are actually quite a bit ahead of us. So I guess, a, is that accurate?

And b, who should we be looking to as models who's already grappled with some of these challenges, solve some of these problems, or are we really the first in the nation to be contemplating some of these things?

Go ahead.

I'm certainly happy to answer that. Assemblymember, there are efforts internationally to transition to pure hydrogen pipeline and additionally blended systems. Again, I would point back to systems we already exist in the United States. Hawaii is an example of a blended system that has been in place since 1974 under the existing regulatory regime.

But internationally, we're want to look to Europe, certainly the Netherlands, the Scandinavian countries. No laggards in the environmental transition. Many of those countries are transitioning their energy system to electrification, mostly through wind.

But recognizing their intermittency of that wind, they are deploying utility grade, utility scale hydrogen networks to support jobs, union jobs, that exist primarily in those industries that require high heat manufacturing.

Thank you. I'm going to jump complete topics here: trades. Could you clarify for us which trades will play the most active role in pipeline development? I know you mentioned in your introductory comments all the trades will be involved in some way in the hydrogen industry, but with pipelines in particular, could you identify the trades in particular and which unique roles they might have?

Yes sir. Mister Chair, so the Operating Engineers will be digging the ditch. Operating Engineers are the best in the world at digging and doing the earthwork. The United Association will be doing the welding and the joining of all the piping through automatic welding and low hydrogen welding according to what the hydrogen current spec is stating.

There is a revision coming out this year to that, and the laborers will be there also to help install, coat, and make sure that the process is done accurately as far as corrosion and erosion. So the three major trades are the UA, Operating Engineers, and the laborers.

Great. Thank you. Next question. This is a broad question. If each of you could weigh in if you have any thoughts, but keep it brief. And that is just overall, what should the role of the State of California government be in this issue?

Some people would have the opinion we should just sit back and let the Federal Government do all of this. Some people say the state needs to set up its own standards. Even if the state doesn't set up its own standards, what kind of role should the state play?

You want to just work your way around real quick and give us a broad overview of that?

Yeah, I would say so. If you look to today, there are federal regulations around PHMSA. If you look at other states, those other states like Texas, they have a state agency, Texas Railroad Commission, that supports the regulation of pipelines.

Our view is that is what California should focus on, is the safety aspects of the regulation of pipelines built off of the federal structure.

There may be some nuances that, you know, people elect to want to do in the State of California, but that's the real value of state regulation, is safety and ensuring what's built is safe to operate.

Great. All right, Mr. Mulliner, any thoughts?

Yes, sir. I was going to say similar. We need the State of California, Cal/OSHA supersedes the Federal Government in a lot of ways. California leads the nation in technology and future clean energy.

So I think that California legislators, along with the State Building Trades, should be guiding and making sure that the industry and all of us are working together.

Great. Mr. Navin?

What I would say, certainly I would concur with the safety elements. What I would suggest though, that the success of California with a renewable portfolio standard on the electric side and the low carbon fuel standard on the automotive side, something akin to that is necessary to decarbonize gaseous fuels.

Okay, great. And Mr. Caram?

Yeah. I think the regulator's role is to ensure that there is no leakage, that operators have strong integrity management programs, that those pipes are maintained, and to ensure that siting of these pipelines is safe and equitable.

Your original comment, your introductory comments, was that there should be-- we should not allow blending of hydrogen. Is that a role that the state should play separate from the Federal Government?

I believe so. The state has the ability to implement safety standards for intrastate pipelines. Distribution systems are largely intrastate pipelines, and that would be the state's role to put something like that in place.

Thank you. Mr. Brutoco.

Yeah, I think that it's going to prove to be economically unwise to blend. Just for the record, one of our consulting engineers in our company ran the hydrogen blending program in Hawaii for many, many years. So we're completely familiar with the blending situation in Hawaii, which has been doing it, as you've now heard, 20 years.

And we don't recommend it. We think it's a mistake, and we think it's a mistake that will prove to be uneconomic over time. More importantly, though, what the state must do is it has to stop the monopoly pricing that's choking the entire hydrogen industry.

Because the open access pipeline, which we totally agree with that SoCal Gas is attempting, it can't work if it's going to be $36 a kilogram at the pump, when everybody knows that right now, Air Products, for example, makes it for a dollar and a half a kilogram.

So it's like somehow we've got to have the state investigate how did the price get to $36, which has caused the hydrogen miracle that was starting to happen here? 17,000 cars, all kinds of trucks, locomotives coming, and all of a sudden it's dying. Why? Because the pricing got monopolistic and the state needs to look at that.

Once it does, it'll follow the example of Germany, Spain, and to a certain extent, France, which is the question.

We're going to get into the monopolistic issue in a moment. So thanks for-- Anything else in terms of the state regulations besides those? Alright, Mr. Raju.

Yes. I think that the state should aggressively take its own steps, not just wait for the Federal Government, both from pursuing dedicated hydrogen pipelines where they can be built, but also exploring the blending option. I think we have four recommendations. One is to do pilot scale blending from five to 20%.

And then the second would be to do laboratory scale R&D to support higher blending percentages and other options for the future. The third would be to work with the utilities, the regulatory agencies, and others to develop updated maintenance and operation protocols and regulatory requirements for the pipelines and safety standards.

Obviously, the fourth, but maybe the most important, is to engage with the communities that will be part of this process and other stakeholders to make sure that their priorities are understood.

Great. Thank you. Ms. Murphy?

Yes, thank you. A couple points. First, you know, I mentioned earlier that PHMSA at the federal level establishes minimum pipeline safety standards. But another key component of that is that state agencies, first of all, are able to get authorization from PHMSA to implement and enforce and oversee those standards within their state, which California does.

And that also states are able to exceed those federal standards and establish more protective standards for pipeline oversight in their state. We've seen California do that and truly be a leader in ensuring the minimization of methane emissions from the gas pipeline system.

I think similarly, there's an opportunity for leadership in thinking about, you know, and we're in early days, but thinking about what is needed to mitigate hydrogen leakage from dedicated pipelines or from blended pipelines if that were to occur, and think about what those standards should look like to ensure that operators are really meeting the highest standard for safety and environmental protection.

I also think, you know, in terms of what California's role is, there is a strong need to manage any injection or blending of hydrogen into the existing natural gas pipeline system, and there's a lot going on I know at the California Public Utilities Commission on this topic.

EDF has put forward some recommendations for a set of principles for how to evaluate hydrogen methane blending proposals. But sort of the first top of the list for those principles is the need to consider what the objective is.

So rather than just saying, well, we could start injecting hydrogen into the pipeline system and maybe we can cut our emissions by 1% in the near term. What is the long term objective and what is the goal, and to really carefully evaluate hydrogen blending against other decarbonization solutions, including electrification.

So that if we're looking at residential and commercial buildings where electrification is really expected to be the preferred decarbonization pathway, does it make sense to invest in all of the infrastructure upgrades that are needed to safely blend when down the line those customers are going to be exiting the gas system entirely?

Thank you very much. While we're still on sort of the broad topics, this may be a bit of a curve, but if you could briefly what are the risks that we should be looking for from a legislative standpoint? What are the potential biggest errors we could make?

If you could identify one or two that you would want to get on our radar screen, what are the cautions as we move forward trying to figure out what role the State of California should play. And anybody wants to jump first, otherwise, I'm just going to go and start again with Mr. Connolly.

Sort of unfair because I didn't give you much warning in terms of that, but we'll come back to you at the end after you offer anything that you have right now.

As I touched on previously, I think kind of two things: safety and maintaining a competitive marketplace.

Great. Thank you. I want this to be 15-20 second sort of rapid fire.

Anything. Mister Mulligner?

Underground leak detection, that's. That's huge. The double containment at the, at the fuel stations. We all have seen fuel stations be re-piped two or three times within a five- or six-year period. I think we, probably everybody in this room has seen that happen.

Mister Navin

And it's brand-new tanks, it's, it's underground, it's the installation is the problem.

I would concur with safety. I would also suggest that we need to take seriously the need to look at the integrated energy system and the reliability of both the electric and gas system combined.

Thank you. Mister Caram.

There's been a movement in pipeline safety regulations towards performance-based regulations that leave a lot up to the operator discretion, which encourages innovation, but it makes it hard to enforce and hard to inspect from the regulatory perspective. So, I think finding the balance between prescriptive and performance-based regulations is important.

Thank you. Mister Brutoco.

Permitting any future use of pipelines for hydrogen, that isn't a safety pipe. It's by definition containment. Continuous monitoring, sweet gas technology that has zero emissions of hydrogen molecules. That's the goal. And I think it's critical we stop thinking of going green by a 20% injection of methane, of hydrogen into an 80% methane pool.

I mean, the idea of blending doesn't get you to green, in fact, costs you more energy in the long run.

Thank you.

And it's not economic.

Mister Raju.

I think the biggest potential mistake could be moving forward without a comprehensive, integrated planning for our energy infrastructure. How are we going to achieve our goals? And the second would be not having safety, maintenance and operational protocols that are updated and are relevant and adequate in place.

Great. Thank you Miss Murphy.

Thanks. I think ensuring that the oversight framework that's developed for hydrogen infrastructure incorporates climate considerations into every aspect, which might sound silly, because of course, the reason we're focused on deploying hydrogen is to achieve decarbonization and address climate change.

But when you look at sort of, you know, as a parallel with the natural gas pipeline system and the regulatory framework around it, it really was not designed with environmental impacts in mind, because decades ago there was not this consideration of the environmental harms posed by methane emissions.

So, as we're developing oversight frameworks for the deployment of hydrogen in a responsible way, not making that same mistake twice, and ensuring that the climate considerations are really built into all elements of oversight, with the recognition that leakage contributes to climate change and needs to be minimized.

Thank you very much. I just want to emphasize how valuable already your responses have been, just from my standpoint, in terms of trying to make sure we capture all of the important issues. So, thank you. We're going to dive deeper now into this.

And that is there's the issue of what is the scale of the pipeline infrastructure that we need to develop from your opinion. How do we deal with the issue of location? We've had comments about that.

And then, you know, the $64,000 question, what about the competitiveness, the issue of private pipelines versus open access pipelines, and how we deal with that? So, I'm going to wrap all three of those together and give you a little bit more time in terms of answering.

And because these two gentlemen over here are most interested probably in that topic, I'm going to open this up sort of in any order that you want to try to weigh in. But I'd like your answer to try to deal with.

Give us, as briefly as possible, your sense of whether this is going to be a small scale, medium scale, large scale, whatever metric you want to use for that, in terms of scale, location, and then how do we deal with the issue of competitiveness, etcetera. You stood up first. Good.

I'll start here with. I would say a perspective is we should allow it to be market-driven by where the need is and where the highest value is. And that highest value is focused on emissions reductions and then elimination and reduction of public health hazards in those areas.

A very, very broad, a very broad strategy is going to be enormously costly because of the money it's going to take to bring the system up to the standard to be able to manage hydrogen. There's a lot of questions around electrification, where that's used.

Our view is there's market niches today, heavy transportation, heavy industry that are ready and they want to use hydrogen today. And we let that actually drive what we do, versus a very, very broad, hey, hydrogen is good for everywhere. It's not.

I think some of the arguments over, hey, what's going to get electrified, what's not, that will remain to be seen, but we allow it to be driven by, hey, I want hydrogen today because I want to switch this particular fleet of vehicles over, and then it's a market need, and then you're creating a competitive environment.

If Amazon wants to go decarbonize one of its warehouses, it's not going to go to a monopoly. It's going to go out with an RFQ, and industry is going to competitively bid to build the hydrogen plant or create the hydrogen, put the infrastructure in the ground, and that's going to end up with the lowest cost.

Just a follow-up to that, do you? To what extent do you see if it's going to be market-driven and therefore almost, I want to say, episodic in terms of how, where it evolves, etcetera? What role do you see pipelines playing in that?

Less or more, is it more likely that hydrogen is going to be transported some other way besides pipelines to that Amazon plant, or will the hydrogen be produced at that Amazon plant and therefore not need large infrastructure? Maybe, perhaps some pipeline infrastructure.

I think a lot of this is going to need pipeline infrastructure. So, it really, it depends on the volume of hydrogen used. You know, the, the typical mode of road transportation is liquefied hydrogen. So, we make that today. We ship that around to small users.

Once you get to a certain economy of scale, then you end up in a situation where you either make the hydrogen on-site or you're piping the hydrogen to the site

In a gaseous form.

In a gaseous form. If you are making it on-site, you need a lot of space to make hydrogen, right? You may need a natural gas pipeline to that facility to make hydrogen. So, I think in larger volumes, pipeline will be, and I think pipelines are recognized as one of the safest forms of material transportation.

Thank you. Next. Go ahead. Start.

Chair Bennett. I would point to a few things. One is that heretofore hydrogen in the economy has generally been a chemical precursor. So, a chemical for the production of petroleum, as an example. What is changing is that hydrogen is now being used as an energy carrier, much like electricity or natural gas.

If you were to look as an issue of scale to the state's own estimates of the potential for hydrogen, I would point no further than Arches, which is the successful winner of the hydrogen hub. Their 2045 figure for hydrogen use potential in California is 16 million metric tons a year.

That's a significant amount of hydrogen that can only be delivered using pipelines. And the other thing I would point to is that cities such as Los Angeles, in their Los Angeles Department of Water and Power have firmly pointed towards the need for hydrogen to back up the electric system when renewables are not available.

To date, the success of electrification and renewable deployment is entirely underpinned by the availability of dispatchable electric generation using natural gas. Ultimately, that needs to be decarbonized by something that looks a lot like hydrogen.

Mister Brutoco.

As I said in my opening remarks. So, our company holds patents for both cryogenic liquid hydrogen and, of course, gaseous. So, we have no bias towards which form hydrogen transport takes we focus merely on how to move molecules for a particular purpose. But it is clear that the demand side of the equation in California is badly broken.

You have an entire industry, every car maker putting hydrogen cars into this market is now unbelievably hurting because of monopoly pricing. I go back to what I said earlier. It's a dollar and a half a kilogram to make. No one can dispute it. And they're selling it for $36 a kilogram at the pump. What does that say?

You need an open-access distribution system, so monopoly pricing cannot occur. I'm okay if it's privately owned. I'm okay if it's owned by the utility. But at the end of the day, we have to have the infrastructure to accomplish that. Let me give you an example.

Los Angeles County, you're not going to be able to put a natural gas stove in your house anymore. That's okay. You can put an induction cooking unit in. And when you do that, the electricity will come from the grid. How the electricity got to the grid is a very interesting conversation.

Classic example of where it could come from a fuel cell, as Neil just said, powering up during peaking hours, like we used to do with petroleum products. That particular way of bridging molecule to electron is exactly the future for how California should be pioneering this. And it will be reviewed by everybody.

I work directly with the private office of Macron, the President of France, and what they've told me repeatedly is we keep waiting for California to show us how to do it and then we will copy. And that's a quote by Emmanuel Macron, who's his principal deputy.

Where do you see the monopolist currently? Where do you see the monopolistic pricing power at this point in time?

It's Air Products.

For your example, from $1 to 36 cents.

It's Air Products, by far the largest one in the state. And if he wants to create demand here, simple, charge a fair price and let him prove to the state why it has to be $36 at the pump, not a dollar and a half plus transportation cost. So, we would be happy.

We can show you, by the way, cost of installing new pipe, steel poly pipe, which is probably a better answer for pipe in California. We can show you how you can make it very small.

Over and over again. I'm going to keep stopping you guys when you start to go places. Go ahead. Yeah.

Can I ask just a follow-up question on the pricing topic? I think there's always like a new subtopic every time we have a hearing on hydrogen, there's a new adventure. Okay, so what you just said, namely that it's a dollar, you said it's 1.50 per kilogram to produce, and it's being sold by, you know, it's $36 per kilogram.

Correct.

Okay, is that widely agreed upon? Does everyone agree with that? Okay.

It's a fact.

What's the reason for that?

That's what I want the state to get involved with, because I think you're going to find its monopoly pricing.

We don't really know what the reason is. But your hypothesis is that it's just monopolistic.

I've actually broken down who's getting what piece of the pie, and it's pretty bad. So, what you want to do is look at the two sources of major hydrogen distribution today, and you say, how could we create a system that would be equitable and would cause the hydrogen market to grow much faster and much less expensively?

And by the way, new hydrogen pipeline in the polypipe version is cheaper than steel to put in new. So, what we need is the state to look at this really in a hard way. Look at the safety, look at the pricing and go ahead and set the pattern for the future to the point the Chairman made earlier.

I think we should be the trendsetter in America, frankly, in the world.

Are there other theories? So, $36 per kilogram, how does that compare with what hydrogen is getting sold in other markets?

Germany it's $10. In Germany it's 10.

So, are there other? Again, trying to keep with the Chair's rapid-fire approach. In 30 seconds or less, other theories for why we're seeing such a huge price differential here in California?

So, I'd say, obviously, you don't want to get into how individual contracts and how things were priced, but it's a competitive marketplace. That's the price out there for hydrogen. We welcome other people to enter the industry, build plants, build pipelines, and supply, and that will ultimately drive down the cost to the consumer.

Yeah, it's a competitive marketplace.

Okay, so we need more people in the marketplace.

Okay, other thoughts anyone? Anyone?

Go ahead.

Yes, Assembly Member.

I would suggest that if the natural gas market, which delivers much of the significant portion of the nation's energy today, is an example, the disaggregation or restructuring of the gas market that took place 30 to 40 years ago, whereby open access pipelines, non-discriminatory access to pipeline networks, provided the opportunity for small and large established and new providers of natural gas, in this case, hydrogen, in the future, access to a pipeline system, which we know is necessary and access to off-takers who want this clean energy.

I would just like to add, going back to your original question in terms of the extensiveness or maturity of the infrastructure, I think, as I said in my original comments, we need a fuel infrastructure that's as robust as either natural gas or petroleum infrastructure to complement the electric grid.

And this can be used for chemical production, electricity production for backup, long-duration energy storage, all of those things. Going to the pricing aspect, we should always expect renewable fuels to be much, much more expensive and difficult to produce compared to fossil fuels.

And that's true for all of the renewable fuels, including even renewable electricity, was substantially more expensive a couple of decades ago. Right now, I think what's happening in the hydrogen market is there's a huge supply-demand imbalance and all the hydrogen produced today has been spoken for, meaning it's already used for chemical production or other purposes.

And the transportation industry is kind of a nascent industry that's kind of getting into the demand market. So, what the state needs to do is to really support, through incentives and policies, hydrogen production, and it's not going to be competitive with fossil fuels for a significant period of time.

And the return we get on that is the climate benefits, the environmental benefits, but it will eventually get there. And the DOE's hydrogen hubs is one such effort to infuse some funds to do it. So, the state should also follow that model.

Sounds like there's a lot for us to dig into there. That's a hearing in and of itself. Thank you, Mister Chair.

One of the most important aspects of this hearing, which is why I've tried to time it for sort of in the middle of this, I want to emphasize a few things.

One, it's very important for the State of California to be able to have all of the stakeholders at the table, have everybody feel safe coming to be at the table and safe offering their input.

So, I would like all of us to walk that delicate line of not attacking anybody that's here, but instead try to capture that spirit that I talked about at the beginning, which is we're all in it, we've all got to figure this out together.

And there aren't good guys and bad guys or good women and bad women, but it's just a fact. We certainly recognize that first movers in any market have a temporary monopolistic advantage. And that doesn't mean they're a monopoly. That means, I mean that they're long-term going to be a monopoly.

That means they're first movers and they get rewarded for being first movers because they have pricing power. When that happens, the important thing is to make sure that ultimately, we have competitive markets as we go forward.

And the example that we have here is an example of a first mover who has moved and therefore has the ability to have more pricing power. And we want to make sure that we have other movers. And as you talked about, try to, as rapidly as we can, increase the number of people producing.

And to do that in a way to match with Miss Murphy's comment that we're meeting our long-term goals and not just some short-term fix that complicates us trying to get to our long-term goals. That's not an easy task to try to figure out that path.

And that's why I'm glad that the Assembly Member is here, she's going to do the complicated stuff as we go forward. But it's not an easy task. And so, I just would like us, we're going to have more of these meetings because it is such a rich topic and a complicated topic.

So, if we'll all try to be respectful as we try to do that, we will appreciate it. But I want to dive farther into this. How do we sort this question out, you know, is part of the issue. How do we get the benefits of a competitive market?

What we've done basically with natural gas is we have created monopolies and then we have regulated them price-wise, because otherwise, the monopoly in the long run would have too much pricing power. Is that where hydrogen needs to go?

Or is hydrogen going to be a market where we can, the infrastructure cost are low enough that enough people, that they don't create barriers to entry? Because that's one of the ways monopolies get started, is the infrastructure costs are so high that only one person can get in.

Could all of you or any of you try to elaborate on that? And I certainly appreciate Mister Connolly and I want to emphasize, we really appreciate you being here. There was some risk, right, in terms of this issue specifically coming up, and you were courageous enough to come.

So, thank you and your company for helping us hear your insights.

I'm beginning to regret sitting at the front of the class. The economic regulation, we don't believe it's necessary. And really the backbone underpinning that is we don't believe that hydrogen is a broad solution. It's a specific tool and adds specific value in certain areas. Right?

If you think about domestic going electrical, much better to generate electricity on a box scale, whether that's wind or solar than it is to generate it on a local scale in a community or a house. We see hydrogen adding the maximum value in niche areas, heavy industry, and heavy transportation, not broad-based.

And in that kind of environment, where you're not necessarily dealing with an individual consumer, you have a competitive arrangement. Somebody wants to decarbonize; they're going to go out for bid to decarbonize. If the price is too high, other people will come in and we have a competitive environment in the niche areas where hydrogen adds the most value.

Do you think those niche areas have low enough infrastructure, initial infrastructure costs, that there will be room for competitors to come in?

Yeah, there are other. We have competitors in the LA Basin today. There are other industrial gas companies that make hydrogen in the LA Basin.

Other opinions on that? Mister Navin.

Yeah, if I may. I think the promise of hydrogen, certainly as an energy carrier and as Doctor Raju mentioned, as a displacement for traditional fossil fuels, whether they be gas or liquid petroleum, is immense. Today in California, we use a very different amount of electricity on an average February day than we say do in August or September.

And it is precisely that imbalance of the supply of renewable energy, electricity in this case, and the demand for electricity or renewables that can be solved using hydrogen. So, I agree with the gentleman from Air Products that there are significant areas where decarbonization can take place in the short term around vehicles.

However, the ability to arbitrage, to spread the use in a way that allows for the maximum efficiency of the energy system. Between transportation, manufacturing, high heat manufacturing jobs, which are critical to jobs growth and preservation in California, and the idea of displacing traditional fossil fuels and dispatchable generation, we believe that is key.

We believe that requires a pipeline infrastructure network that allows for just, fair, and open rates. And as a matter of law, that is a role that has been traditionally played by utilities.

Could you just, what is your initial reaction to that?

My initial reaction is there's a very, very long term kind of view there. Blending or converting the existing system to natural gas has enormous complications versus building from scratch. There is no regulatory framework for the safety of blending. There is a regulatory framework today for hydrogen pipelines covered by PHMSA. It's in place.

When you look at the hurdles, the engineering, and the amount of work that it would take to be able to safely blend into the natural gas system, you look at all that cost borne by the ratepayers for what is a very, very broad usage. I don't think that makes any sense at all.

The usage, we believe, is a bit more surgical.

Yeah, thank you. I do believe I need to respond to at least some of that. Thank you. So I think the witness suggested that there is no regulatory framework that exists for blending. That would suggest, then, that the State of Hawaii is not existing in a regulated manner in the delivery of their current gas system.

What is Hawaii's blending percentage?

It is between 12 and 15% hydrogen. Great. Thank you. And as such, that system is constructed largely, if not absolutely, similar to systems all across the country. So there is a regulatory framework that exists. It does exist today. It exists at a federal level. In terms of natural and manufactured gas.

Those are the terms that are used at a federal level. And what I would suggest, at least in part, is that the work by Doctor Raju and others have suggested that the costs are quite manageable and moderate in using the existing natural gas system that the ratepayers have largely paid for.

They've largely paid for those pipes that exist in the ground, and therefore, it provides an early opportunity for offtake.

Happy to have both of you continue this, but I'd like to have the other five of you give us your initial reaction to this disagreement that. That we have here from these two. Mister Caram?

Yes, thank you, chair. Yeah. I would say a blended system is under the current regulatory structure, but I think the point is that there's nothing specific about the blended product. There's no unique part of that regulatory structure dealing with the unique risks of adding hydrogen to that system.

I would say I think every stakeholders goal is to have zero pipeline incidents, and we are not there. And one thing that we are seeing on the natural gas side is there still remains failures that are happening from pieces of their system that they should have known was there, and it wasn't.

There was a failure last year at a chocolate factory in Pennsylvania from an Adelaide section of pipe that operators have known for decades, have caused this exact problem. And so I just bring that up as if we're going to promote this or allow this.

You need to trust that operators know their system well enough to know that every single piece in that system that was built for methane is able to handle hydrogen blend. And I don't think that's been proven yet.

Anybody else? Mister?

Yeah, I would like to comment on real fundamental, with all due respect, fundamental. Different approach to the whole hydrogen question than what we just heard. I don't see it as a surgical application.

In fact, with the number of electric vehicles this state is going to put on the road and the increased demand on air conditioning, we're going to have increasing blackouts if we don't have a supplemental way to move cars, trucks and buses and locomotives.

And so we have to go into hydrogen, which means wide distribution network, which means pipelines, as well as. Because remember, my company will do either pipeline or cryogenic hydrogen. So I'm not. I'm not against either one.

But we're going to have to have a composite plan, as you know, Chairman, because you've seen the video, the proposal that was put up by the Commissioner from Caltrans and the California Air Resources Board was to basically put a trench with a pipe, hydrogen pipe, along all the freeways in California.

And to do that in a way that was so economic, it could be actually less expensive than building new infrastructure in the electrical grid. So what I think we need to do is look at this with a very new eye, not how does it look like the past? And can we tweak it into the future?

So when someone like EDF puts up that it's too dangerous to not consider the environmental impact. Why wouldn't we make that an absolute condition? No leakage. Why wouldn't we say safety is the number one criterion? We agree with these guys. I think that what we should do is make sure that's the top priority.

And the state would have. Last but not least, if you use hydrogen surgically, you will never develop a mass market that will bring the prices down to where it becomes a true competitor. And if you think about how important that is, the new rules that took effect, which basically are putting windows out of business. Right?

So solar gone up dramatically this year nationwide. Wind has dropped precipitously. Why? The three pillar standard choked it off. So you can't economically make hydrogen very easily. And as you know, you can't get tax credits for burning Wood. I can go through the list of other things you can't do.

To make hydrogen, where you end up with extremely expensive hydrogen if you don't make it from methane. And if you do that, you're basically keeping the whole system in place. So we do really rethink it from a base level. Thank you.

The other three, Mister Raju.

So I just want to touch on the regulatory framework quickly before I go back to your original question about monopoly. So right now, California does not have an injection standard, meaning you cannot inject hydrogen into the natural gas pipeline. And as far as the way I understand, you can't do that anywhere.

Hawaii is a very unique example because they're an island. They import LPG and then they refine it. So they don't really inject hydrogen, but they have hydrogen as part of the natural gas that they produce. But also Hawaii's infrastructure is much, much smaller, orders of magnitude smaller than California's.

And it doesn't have all the different parameters that we would be dealing with in terms of the weather, pressure, cycling, all of those. We definitely need to develop a more robust regulatory framework, but we're not going to be starting from scratch.

There's federal regulation on how to handle hydrogen, there's straight regulation on how to handle hydrogen, and industries have done that for decades. So going back to the monopoly, building hydrogen infrastructure and operating and maintaining it is not a trivial task.

So by its very nature, it's going to be restricted to a few players who have both the financial resources but also the technological skills and the expertise. But that does not mean that it has to be one entity.

It can be multiple entities that produce hydrogen, a few entities that operate and maintain the pipelines and other modes of transportation, and then the end use equipment. We need to engage with the manufacturers to make sure that the devices can handle hydrogen and also address the emissions issue that Erin pointed out earlier.

Hydrogen, when combusted without after treatment, tends to produce very high levels of Nox. So all of those need to be addressed. But I think it's very doable.

1 second. I'll just. Let me follow up this question with Tim and I'll be right with you, Miss Murphy. And that is, you talked about hydrogen producers and then hydrogen transporters.

Do you see benefits or a bend towards multiple transporters of it and multiple producers or multiple producers and a monopolistic transporter of it, I think is one of the fundamental questions. Which do you, from your perspective?

I think definitely multiple producers, because there's hydrogen production should be decentralized with lots of. And we're going to be primarily doing it by splitting water through electrolysis. And lots of.

In terms of the transportation, it should be not as many, but at least a few, perhaps similar to the natural gas system we have with very robust state oversight and regulatory framework. Thank you, Miss Murphy.

You're on now. Miss Murphy, thank you.

Thank you. Thanks. Chair. Yeah, just a couple points on this discussion. I think, as a starting point, from my perspective, hydrogen pipeline infrastructure is going to be very different and much more limited than the current operational network of natural gas pipelines that we have in the United States and in California.

We don't know at this point the extent of pipeline infrastructure that will be needed for hydrogen in a fully decarbonized economy. We've seen some analyses. I think there's. The Princeton net zero study takes a stab at an analysis of hydrogen pipeline mileage. I also believe there's a north American hydrogen backbone initiative that's getting underway.

So there's some efforts to think about that. But I think a couple points are that one hydrogen deployment we know should be focused on those key, hard to electrify sectors, such as high heat industrial processes. Those users, we know where they are, or we can evaluate where they are. And hydrogen transportation, ideally, would be minimized. Right.

Because it takes a lot of energy to transport hydrogen. It takes more compression capacity than natural gas, and because of the losses that can occur along the pipeline, both from leakage or from operational releases like blowdowns that contribute to climate. The less distance we need to transport hydrogen, the better.

And so if it can be produced close to where it's utilized, that's excellent. If there's a need to transport it. Right. That's where we need to think about the pipeline infrastructure that's needed, needed. But I think there are considerations, such as if we are able to look at the conversion of current natural gas pipelines to hydrogen transportation.

There's some potential benefits there in terms of cost. The estimates I've seen are that the conversion of a natural gas pipeline to transport hydrogen might be 30% to 40% of the investment of comparison to building a new pipeline. So there's the potential for cost savings there.

But it's obviously essential that any conversion be done in a way that's really safe, in a way that carefully evaluates the specific properties of hydrogen compared with natural gas transport. So that conversion needs to be done in a responsible manner.

I think that kind of circles back a little bit to the blending discussion, where, from my perspective, I've talked already about why it really doesn't make sense to be blending for residential or commercial building customers, where electrification is the preferable pathway for decarbonization, I think for industrial customers or potentially power generation for that clean, firm power that Neil from SoCal was talking about earlier in the discussion.

To me, if you're thinking about blending, there are investments that are required, required just in order to blend, right? To ensure that the pipeline integrity is going to be maintained and to ensure that the end user is able to utilize hydrogen either on their industrial equipment or their power generation equipment.

And so if you're looking at those investments, why not think about those investments for conversion to full dedicated hydrogen use and full decarbonization, rather than blending as sort of a stepping stone that can potentially just extend your use of the fossil fuel natural gas when we're trying to aim for decarbonization. So, lots to consider, but thanks.

Thank you very much either. Anybody else want to weigh in on this? Go ahead. Mister Caram, it looks like you're one.

Thing came up a little bit before on the discussion of, you know, regulating as a utility.

We don't have a strong opinion on that being a safety organization, but one thing I do want to mention is something that's been frustrating to us as safety advocates, is that the current incentive structure around utilities is there's a financial incentive around building new infrastructure, and there isn't that same incentive around maintaining the existing infrastructure for safety.

And I think there's an opportunity to, to fix that wrong as we look to hydrogen.

That's an interesting insight as we move forward. Go ahead.

Yeah, again, chair. Thank you. What I would suggest is that the blending of hydrogen into natural gas pipelines exists beyond Hawaii. It exists in North America, in Canada, in at least two locations. It also exists in New Jersey.

And so there are other venues other than Hawaii, which has a very, as the Professor noted, is a very distinct system based on the nature of the supply. What I'd suggest is that we not prematurely give up tools that could accelerate the adoption of hydrogen, including blending.

Were we to have put all of our retirement into Kodak stock 30 years ago or 40 years ago, we might not be especially happy. So before we invest all of our efforts in one particular pathway, either electrification or eliminating the idea of blending, I'd suggest that we look for opportunities. Thank you.

Anybody else on this topic? I'm going to dive into this a little bit, come at it a different way. There's almost universal agreement that we should go to hydrogen highways for semi trailers to be able to transport, decrease the pollution at the ports, have people be able to have hydrogen trucks.

So if any of you think that's not a part of the future, speak up. But I think there's almost universal agreement. My question is, let's just take that. Some people would call that a niche market or a niche part of the market. Some people would say that's actually part of a major wholesale delivery of hydrogen.

That'll be interesting to see what your perspective is of that. But if we want to every 50 miles, make sure there is a hydrogen station for large vehicles to be able to refuel at, is the best way to get that hydrogen there by pipeline?

I think most people would say, yes, the best way to do that, if you want to have a steady supply and be able to count on et cetera. But that's not the way we get it there. That's not the way we get gasoline and diesel there now.

So I'm open to hearing, no, that's not the best way to do that. They don't build a pipeline to every, you know, 50%.

But if you do do that, if you decide you're going to connect all of these by pipeline, then the whole issue of right of way and who has the right of way and all of that becomes a very significant issue.

And if we have multiple transporters of that, that seems duplicative in terms of cost to dig the trench and to dig another trench close to it and to try to link these up. Help me with what your vision would be on that fairly narrow part of.

How do we handle a step that I think everybody, you know, across the board says for. That's a hard to decarbonize industry, and that is heavy, heavy vehicle equipment movement. That's not as hard as steel and some others, but certainly that's what makes it sort of a good test case for us.

What are your thoughts about competition versus monopolistic approach? And when I say monopolistic approach, one provider of that pipeline versus multiples, etcetera. And anybody can start on this one, even Miss Murphy if she wants. Right. Anybody?

I'm happy to start.

All right, great. Gives everybody else time to. Everybody else time to think about it, right?

Yeah. So I'm not sure if I'm prepared to sort of make a firm recommendation on competition versus a regulated monopoly at this point. That's a really important consideration. I did want to comment, though, on, you know, I think just the baseline question of when is a pipeline appropriate.

And from my perspective, when there is a long term identified demand for the fuel for hydrogen, in this case, that's you know, significant enough to merit pipeline infrastructure, then I think, you know, a pipeline is an approach, appropriate solution to satisfy that demand and to transport the fuel to the end user.

There are really important considerations when thinking about siting and permitting for pipeline infrastructure. One is equity. There's been peer reviewed analysis of the transmission pipeline infrastructure in the United States, finding that those interstate transmission pipelines tend to be located in more socially vulnerable communities using the CDC social vulnerability index.

And I think that shows that, you know, in the past, there has not always been that careful consideration of the equity impacts of infrastructure siting and development. And we need to incorporate that consideration when we're thinking about the development of new infrastructure. I think that's also really key here.

When we're thinking about can we, and when does it make sense to potentially convert and repurpose existing natural gas pipelines for use as dedicated hydrogen pipelines? Do we need to take a step back and think about, well, how was that original pipeline cited? Was it done in an equitable manner?

And do those considerations need to be brought to the table now as we think, think about whether that's the right sort of routing for a hydrogen pipeline.

Great. Thank you, Mister Navin. We'll just, we'll go 12 and when you put your hand up and.

I'll very briefly, if I may, I did want to point out that our Angeles Link project, that in fact includes EDF and many others in this table as part of our stakeholder engagement process, are looking at the ability to repurpose and reuse right of ways as a matter of delivering hydrogen.

What I would also point out is that the involvement of those community based organizations and discussion is important both to look at the impact of infrastructure, but also the benefits in terms of delivered air quality by eliminating the use of diesel trucks, as an example.

And lastly, I would point out that our capacity to deliver hydrogen at scale has been discussed as needing pipelines. UC Davis as an entity has provided some very good work about the short term use of trucking to supply hydrogen to fueling station, but the longer term need for pipeline infrastructure. Great.

So to the specific point you raised about if you had one single pipeline owner, whether it was a private or utility, wouldn't that allow for a hodgepodge of different. And it doesn't, because what you specifically articulated was heavy duty trucks.

So a pipeline running along the corridor that those trucks will take, the stations will all be along that corridor. So it's the ideal use for a pipeline. And there's none of the drawbacks that I can see, again, our company has technology for using cryogenic. There's a couple firms in California currently using cryogenic. We've done papers on it.

We'd be happy to share them with you chair on the economic trade offs, but I do believe it's an ideal application for trucks.

Mister Connolly, has your company looked at that niche market? Do you have thoughts on that?

I don't really have anything substantive to add. Do you mind using the microphone? Yeah, I don't really have anything substantive to add. On the subject of right of ways, you know, we, our pipeline system today, we've successfully permitted obtained right of ways for that pipeline system.

Do you anticipate supplying truck stops every 50 miles on the freeway as a niche market that private industry might move into?

I'm more on the production distribution pipeline side, so the logistics distribution side is not my particular area of expertise. How about getting the hydrogen to those.

To those truck stops?

Yeah, there's different ways of doing it. You can do it via typically transportation of liquid hydrogen, which is very similar to how gasoline is transported today. Or pipeline really depends on the volume.

Do you have any information on the cost of transporting liquid hydrogen to a truck stop in, you know, at the grapevine versus diesel to that truck stop on the grapevine? I do not. Okay. Does anybody have any information on that? Yes, sir. Mister Carter. Zero, on that? No, I'm sorry. Great.

Well, before we jump here a little bit, I want to introduce Assembly Member Greg Hart, who is also on the Select Committee. Assembly Member Katy Pietri Norris just left, so you're filling in appropriately and nicely. We invite you to jump in with anything that comes to a question that you have. But this is a very free form.

All of these gentlemen and Miss Murphy gave a five minute introduction in terms of their thoughts about where we should go with what should legislators know about hydrogen pipelines, and think about with hydrogen pipelines as we might be considering legislation, et cetera.

And so that's the basic topic, and we're just trying to dive down into some aspects of that topic. Go ahead, Mister Carr.

Yeah, I wanted to build a little bit on what Aaron Murphy had shared about citing. There's one of the frustrations we've had under the existing natural gas regulatory structure is that the siting is handled by an economic regulator with FERC and issues. The door closed. An economic regulator. And you said who? Which is FERC?

The federal energy regulator. So what's been frustrating about that is that things like environmental justice, as Aaron mentioned, haven't been taken into consideration, but also things like safety haven't been taken into consideration. And PHMSA, as a safety regulator, is explicitly forbidden from regulating the location or the siting of pipelines.

And that leaves a little bit of a gap, and hydrogen falls outside of FERC's jurisdiction. So there's another unique opportunity here to incorporate things like safety, the possibility of geohazards and things like that in the location, choosing the safest route possible with proximity to people, as well as environmental justice concerns.

To what extent should we anticipate that there will be pipelines, interstate hydrogen pipelines moving hydrogen? Let's take 2050. So some time from now. Well, we have interstate exclusively hydrogen pipelines, and I assume, but correct me if I'm wrong, those would be pretty large infrastructure projects that probably wouldn't have multiple competitors with it. It might be open access.

But anyway, what are your thoughts about the interstate pipeline and how that might affect or be something we should be aware of?

California again, chair, what I would suggest is, if you read very carefully the hydrogen hub funding that was put forward by the Department of Energy, their explicit hope, I would say hope is that over time, those hydrogen hubs would connect with each other. That was part of the application.

So I do believe over time one might see interconnecting the system, say, as an example, the Rocky Mountains to California.

Yeah, I just wanted to say that the arches, which we are also Members of, with SoCalgas, we've been supportive of the connection between the states that are already at play in the Angels Link project, because you're already talking about multiple states now in that particular pipeline location.

And I believe in terms of, if we cite the pipelines directly adjacent to freeways and highways, the amount of CO2 we take out of the air from disadvantaged communities they're currently breathing that. Look at the 710 corridor. It's inhuman.

And by replacing it with a hydrogen pipeline that does not leak, we're doing a tremendous service and we're providing an economic way, way to reduce the cost of hydrogen per kilogram delivered.

Anybody else on that topic? Anybody else on that topic? Then how about the issue that's been raised of continuous monitoring?

Yeah. Thank you, Chair Bennett. I'm happy to jump in. SoCalgas supports a rigorous monitoring and oversight of the hydrogen deployment. Sensors do exist today, some of them being developed by sensor developers in conjunction with some of the environmental advocates.

What I would suggest is that all new large pipelines that are being developed by SoCal gas today on the natural gas system do include advanced fiber optic persistent monitoring for things like leaks and anomalies. And so I would suggest that a robust oversight and monitoring of those pipelines would be appropriate. You use the word persistent.

Is that the same as continuous? Yes, yes. Synonymous. And just very quickly, Erin, you are to my hard right, and so speak up if you want to say something. If you raise your hand, I may not see it. All right? So just feel free to speak up. Okay, great.

Chair. I just wanted to point out probably one of the largest, not the largest, and certainly most reputable sensor manufacturers right here in California, and they're shipping their sensors all over the world. And yes, they're continuous. And whether you do it with one technology or another, it definitely should be continuous.

And then in terms of measuring leakage, if we're okay. She raised her hand. Speak up. Right, go ahead.

Sorry I raised my hand. I didn't want to interrupt. Yeah, we'd love to chime in on this point. EDF has been giving a lot of careful thought and attention to the concerns around hydrogen emissions and hydrogen leakage from infrastructure, including pipelines.

And I did just want to briefly share some information that we've collected thinking about what are the existing hydrogen detection technologies that are commercially available? And they do. There are limitations. Right.

There are commercially available hydrogen detection technologies, but the concentration range is at the parts per million level and is really more designed and focused on a high threshold that presents an imminent safety threat, which is obviously very important to be able to measure and understand, but that doesn't necessarily capture levels of hydrogen leakage that present an environmental and climate harm.

And so EDF is working on this. The Department of Energy is providing some R and D support for various stakeholders.

But there is a real urgent need to develop more effective and nuanced hydrogen detection technology, both to ensure that ability to identify smaller leaks that pose an environmental and climate harm, and also to measure the leak flow rate of hydrogen leaks.

This is something that's also been in development, and we've really seen just dramatic improvement on the methane side. And so we're hopeful to see similar improvement on the hydrogen detection side.

To your point about continuous monitoring, I just want to maybe share some perspectives from the methane perspective on natural gas pipelines that I think is also really applicable when we're thinking about hydrogen pipelines, which is that what we've seen is that it's really a combination of technologies and work practices that gets you to best tracking and understanding leaks and being able to fix them promptly on a system.

So it's on distribution systems, we see a mixture of vehicle driving surveys as well as walking surveys and even occasional aerial flyover surveys. Right.

That might be detecting methane leaks at different thresholds, but, you know, a flyover survey gives you, is only going to pick up a very large leak, but it's something where you can cover a lot of ground very quickly.

So doing that on an occasional basis, combined with the, you know, closer to the ground vehicle surveys, really ensures maximum coverage for a pipeline system. And I think those approaches that have been developed for natural gas pipelines are also going to be sort of best of performance for hydrogen pipelines as the detection technologies catch up.

Well, your comment is perfect. My next question was going to be about measuring leakage and the various techniques, and what do we mean when we say continuous? What do we mean when we say persistent and what are the techniques?

And the other half of that question is who should be responsible for doing the measuring and how public should that information be?

Maybe using, again, the natural gas system as an analog? I agree with the witness from EDF, Aaron, that the Senate Bill SB 1371, I hope I'm getting the number correct. And the multitude of techniques that have been deployed because of that rule have really resulted in a significant reduction in methane leaks.

And what I would suggest is that multitude of either measurement technologies deployed by the asset owner, the pipeline owner, in this case, likely, or facility, but then submitted to the state for review, which is the process in which the SB 1371 work takes place, and, or, my apologies, chair, monitored by a third party or verified by a third party.

So the owner should be responsible for the. For the monitoring and measuring, and that public. That information should be public.

That is the method currently being used broadly for the SB.

And the method you would support for hydrogen also, or the message you recommend for hydrogen also?

I would recommend a similar approach for hydrogen.

Anybody feel differently on that?

No, I feel strongly in favor of it, that it should be the pipeline owner's responsibility. And it should also be something that is transparent. And I would urge something that doesn't allow for a monthly reporting system. This is all data that's captured on the cloud now.

It can be instantaneously available in Sacramento as well as anywhere else, and it should be.

Any disagreement with that? Yeah, Mr. Raju.

Not necessarily to disagree, but I think I do want to reemphasize the need for combination of technologies. So sensors, pressure monitoring, flow monitoring, and drive by sensing, all of those things.

And in terms of the monitoring itself, I think it should be the entities that own and operate the pipeline, but with rigorous oversight by state agencies, including supervision and third party verification.

Thank you. Yes, sir.

Yeah, I think this is an area where, to a previous comment I made, it's really important to strike that balance between performance based and prescription based regulations, allowing operators the flexibility to use a full suite of different leak detection technologies dependent on the unique circumstances of that system, but also having some prescriptive standards in place as to how accurate, sensitive, reliable that equipment they use is. Thank you.

Anything else on this? Yeah, I would. Go ahead. Go ahead, Miss Murphy.

Thanks. Sorry. Erin Murphy, EDF. I just would add to all those great comments to say, you know, on the last point that Bill with pipeline safety trust made, I think that's right.

And where we know what the most effective technologies and most effective work practices are, I think it can make sense for the regulator to sort of lay out what the practices and technologies are that operators should be using.

When we're in a space where we're still really trying to improve and develop the technologies, it can make sense to provide more flexibility to operators and then update those standards over time as we get a better understanding of what works. I did want to make a point. I think in General, EDF's perspective is that it's the pipeline.

You know, it makes sense for the regulator to direct pipeline operators to be conducting leak surveys, gathering that information about the extent of leakage and hydrogen losses on their pipeline, and reporting that information publicly and managing those leaks and fixing them.

I did want to share, and again, I'm analogizing to the natural gas pipeline system, but the US Environmental Protection Agency recently finalized methane mitigation standards, primarily for upstream oil and gas production, and incorporated a new element into that standard, which is the ability of third parties other than operators to identify leaks or other large point sources of methane emissions, provide that information to EPA, and then create accountability for the operators to address those emissions.

I think as we see the emergence of broader emissions monitoring by third parties, like through the emergence of satellites, as well as more frequent flyover campaigns being conducted by academic researchers, by other stakeholders, there is value in ensuring that that information, right where leaks or major point sources of a greenhouse gas are identified by a third party, for that to also be required for the operator to respond to those sources.

And so whether it's the State of California as sort of an intermediary, where information is reported to the state and then it's passed on to the operator, or whether it's directly made public, I think there's different ways to think about it, but want to recognize like the value of the more information we have, the better to ensure that our hydrogen infrastructure is managed carefully.

Thank you very much. Go ahead Mister Connolly.

So the only thing I would add to that is the goal is to prevent the leaks to begin with, and that pulls everything back to having the pipeline system specifically engineered to the molecules that you want to transport. So there are certain techniques with hydrogen pipelines. One is if you eliminate connections, you eliminate leak points.

So that comes into some fundamentally different approaches to the design of aggressively eliminating all connections, all flanges, going to a more continuously welded design. What that does is eliminates those leakage points where leakage can occur. So it's not just about the monitoring that's the monitoring's there.

If you've got a problem, maybe with the fundamental design, that's where you want to correct it in designing the pipeline appropriately for the molecule.

Thank you Mister chair. The company that makes that pipe in Texas Nov delivers it on 18 foot reels, so that you can put almost a mile of pipe down without a single attachment point. So I tend to agree with air products on that.

I also though do not agree that the only leakage occurs at the joint, it occurs permeating through the pipeline, along the entire pipeline face, because no material, including stainless steel, can hold hydrogen molecule captive. So the question is how to capture those molecules when they come out and then keep them safely away from the atmosphere.

So you gentlemen and lady, have been sitting here for almost two and a half hours with no break. We're going to bring this to an end in about 10-15 minutes, if you can be patient with that. So just down to the final things. And Mister Hart, again, jump anytime you're ready.

But I want to just very briefly touch on materials just so that we get it out there, because you've just mentioned the pipeline link, you mentioned getting rid of the joints. Opine any of you, very briefly on is it going to be plastic? Is it going to be treated stainless steel?

Which is what they talked about when we were in Utah and their pipeline coming down. What should we know about materials? As briefly as possible? Go ahead. Time for labor.

Thank you. Chair. A welded steel system, a post hole digger can't go through it. Poly pipe is very damageable. If we're sitting here talking about safety, that would not be the safest installation. Thank you. Thank you.

Go ahead. Mister Connolly.

I would say the best way to address the materials of construction is appropriate regulation.

If we were the regulators and you were addressing us with today's technology, what would you recommend? Some stainless steel? You know, treated stainless steel? Or would you recommend some other.

So today for hydrogen, we follow the voluntary guidance of B 3112, which is a specific grade of carbon steel that is used in hydrogen service. I think to the. To the point around alternative materials. If you look at pipelines in the public domain, probably about a third of events are caused by third party line strikes.

So that you have the. There is an internal safety issue, but then a significant amount of loss of containment is external. And that's the other thing to factor into the material of construction.

Thank you very much. We're going to go to that point.

Chair. It should be the poly pipe inside of a containment pipe, which could be metal, could be anything. In other words, you wouldn't want to put a poly pipe in the ground all by itself uncontained. Thank you. Mister Rob.

I do want to add on the material side, we have reasonably good understanding of which materials are susceptible to hydrogen. Both on the nonmetals plastic side and also on the metal side. And there are some steel grades of steel that are very resistant to hydrogen diffusion and embrittlement.

But also, just because hydrogen diffuses through a material does not necessarily mean that it is going to cause catastrophic failure. So it is a question of whether it's causing embrittlement, whether it's whether there's crack initiation, crack propagation. So a range of materials used in the natural gas infrastructure today are susceptible to hydrogen.

But there's ways to mitigate the issues. But also there are materials that are very resilient to hydrogen. Great.

Mister Nolan, what I would suggest is that B 3112, again, a voluntary standard, is a good start. But I would not diminish the ability to look for these coded solutions as an example, as you may have seen in Utah, and then other poly type pipe that might emerge in the future.

Thank you very much. The two final questions. What should we consider when it comes to ratepayer cost and pipelines. And my final question is, what else? What have we not covered today that we should have covered and we should cover at some other point in time?

So you can think about both of those, but in terms of ratepayer cost, what should we be thinking about when it comes to pipelines and the impact on repairs?

Chairman, I'll start. So what I would suggest is that the current structure we have in California for regulating energy, especially utilities, demands a fair but just return on investment. So as a matter of law, there is a mechanism for the state, in this case the Utilities Commission, to regulate the investments of the pipeline operator.

I'd further suggest that pipeline infrastructure is generally an investment that takes decades to unfold and is used for many decades. So a mechanism that would allow that to take place for the market, including the capital and debt markets, to respond to those signals we think is essential.

Should the rates be paid by the off taker or spread amongst a larger group of people that are somehow tied into the pipeline network by the off taker?

In other words, there's plenty of room in the price between the origination cost of hydrogen and the delivery cost to let the people who use the hydrogen pay for the pipeline. I certainly agree with the concept that has to be a fair and just price.

It's not something done free, but you can build that into the per kilogram cost to deliver, which is not that great considering the cost of hydrogen. It's not that big number. Thank you.

I think given how substantial the costs are going to be, I think there should be a lot of incentives and assistance from other programs that the state is running, maybe cap and trade or other programs where the. Because using hydrogen will result in some climate benefit and ultimately can feed into it.

We have to be careful as we kind of transition away from the fossil infrastructure that it's not the most impacted or vulnerable communities that are also paying a bigger chunk of the cost. So I would be very careful in designing how those costs are paid for.

Great. Thank you. I'm going to make this the close and in your close. Well, now I'm going to ask this question, then I'll let you close. What else? What did we miss?

Is there a major issue, I mean, something minor, but is there something major on the issue of pipelines that we have not covered today that you think we should have at least mentioned as a topic for legislators to be aware of? Yes, sir.

Yeah. If I may chair, what I would suggest is pipelines allow for scale in a way that other solutions do not, and scale will be required both to achieve the greenhouse gas benefit, but most especially in places like Southern California, the air quality benefit.

So the ability to eliminate diesel, particulate matter, Nox and others that come from transportation, most significant health benefits, I think, are things that need to be weighed out.

We did do scale, location and competitiveness all at one time, but you kind of come back to that stuff. Yes sir, Mister Carter.

I mentioned it in my opening remarks, but you know, the main reason as an organization that we are opposed to blending hydrogen into distribution systems is because of what's on the other side of the meter, the internal piping in people's homes. That is not under the jurisdiction of any pipeline safety agency.

It's not under the control of the pipeline operator and is really the weakest link in all of this. And so I would urge caution there. I also just, if I don't get a chance to say it, I just want to express my appreciation to the level of dialogue we had today.

Thank you so much, chair, and to all the panelists, this has been a really great conversation.

Well, you just started off, started us off on the closing comments, so you can work in anything you think we should cover into your close, but why don't we go ahead and just start our close here? Go ahead, Mister Rob.

Again, I would also like to express my thanks to the chair and to the panelists. But you know, even though they're not part of the pipeline, I think the storage infrastructure for natural gas and the end use equipment are of course, very closely, intricately tight, I think.

I'm not sure, maybe there's a separate panel for that, but those should be addressed. And any other topics we discussed today, we could have a separate panel discussion. We could dive deeper into those topics, but particularly the cost and effectiveness and the ultimate benefits.

I think we could spend a little bit more time talking about the different approaches.

Storage would have been a natural to match up here with pipelines, wouldn't it? And stuff. Right? Mister Bertico, you want to do your closing comment?

Thank you. Yes. I think that the Assembly needs to take a look at the interface between the electrical grid we currently have, which clearly will not suffice for the future, and what the relationship of the molecules and the electrons should be ideally. I gave one example earlier.

If you had a fuel cell generating electricity from hydrogen and it was powering instead of a peaker plant using natural gas, you'd be able to avoid completely putting hydrogen to anybody's home or business or office, because they'd get more electricity and it would be generated locally, we wouldn't be building a massive new structure for an entire replacement of the grid.

When you take a look at the number of electric cars that are coming, battery electric cars, and you look at the potential of fuel cell electric cars to help offload that, it is an enormous opportunity and I don't think the state's even looked at it yet.

What's the playoff over the next 10 years of the, of the grid? Thank you very much, Mister Navin.

I think 11 thing to consider is that in most models that model the cost of hydrogen to the end user, the transportation costs, that is the pipeline costs actually pay a fairly limited role. The largest costs are typically when you're talking about electrolytic hydrogen. So hydrogen produced from water is typically the power costs.

So I think looking at the overall cost of delivered hydrogen, not just transportation, and making sure we're doing that in a way that most benefits Californians, ratepayers, all who are impacted by the energy system, I think is key. Thank you.

I just want to add, thank you for allowing us to be here today. The state building trades and our affiliates will continue to spend the money and the training and invest in whichever direction the industry goes. We're going to be ready and our Members are going to be ready. So thank you.

Do you have a sense of, have you folks been able to get a scale? What do you anticipate would be the hydrogen economy from your perspective in terms of workforce that you have too many variables to.

Well, I mean, with arches? Arches is amazing. My Boss, President Hannon, we are actually a founder of that, the building trades. And right now we're talking what, 22 billion.

I mean it's amazing, but it won't be successful if we don't figure out this pipeline and how to distribute it and how to get it spread out so it can be affordable for everybody.

Mister Connelly.

So the private sector is responding with tremendous investment in the entire value chain. Production, distribution, storage, dispensing that same. Private sector operates 90% of the hydrogen pipelines today. Certainly our products has done that with an outstanding and unenviable safety record. Safety is the most important priority as we make this transition.

Operating hydrogen systems safely requires systems to be specifically designed for that and it requires operator expertise. And the private sector has demonstrated that it can do that with an outstanding safety record.

Thank you very much. And Miss Murphy, we get to, you get to close this. Close this off here actually. Mister Hart, thanks so much.

Yeah. Really appreciate the opportunity to testify with this group today. I'll just briefly say in closing that from our perspective, the oversight of hydrogen pipelines is needed to ensure that development and operation is equitable and carefully manages safety and climate risks.

And hydrogen pipeline development should be tailored to facilitate strategic hydrogen deployment for hard to electrify end users. Any blending of hydrogen into the existing natural gas pipeline system requires extremely careful oversight and needs to be evaluated against all decarbonization alternatives, including electrification.

Thank you. Thank you very much.

Yeah, I just want to say thank you to you, chair Bennett, for organizing this series of presentations and for the panelists today for sharing your deep, deep expertise on this subject.

Wasn't able to be here for the whole time, but the part that I was was extremely valuable and helpful and look forward to the next opportunity to dive into this incredibly important subject.

Well, I want to thank everybody that participated, but particularly our seven panelists. This was no small task to ask you to be here and then to ask you to sit through two and a half hours with no break and with questions that you did not have in advance and try to respond.

I particularly appreciate our private sector representative for taking the front row seat and, but all of you for trying to approach this professionally so that we have the best shot at giving the public the best policies possible going forward.

So this is an open invitation that we are trying to compile a body of work that anybody could go back and look at, and this hearing will be part of that. So if you want to add to that body of work, please contact our office if there's something that you think would be helpful, important, valuable.

If something comes up after this and you have our respect and admiration for being willing to be here and help us out, let us know if there's anything we could do to help you out as you go forward. Also, thank you all very much. And with that, this hearing is adjourned. zero, I'm sorry. Public comment? Yes. Right.

Can public comment wait 60 seconds because nice to meet you. I don't think I can. I'll be right back from the rest of you. Actually, we don't have that many people here. No, go ahead. We'll do public comment. Gentlemen, if you'll move away from here so that the public can be on the screen. Right.

Thank you, Mister chair, Beth Olasso, on behalf of the Agricultural Energy Consumers Association, we are fully supportive.

We're with who?

Agricultural Energy Consumers Association, we are fully supportive of hydrogen use in the transportation sector and in dedicated pipelines for eventual use in the hard to decarbonize sector. However, as ratepayers we have strong concerns with pipeline blending. Blending small amounts of hydrogen into existing pipelines will not be cost effective in the state's decarbonization efforts.

Moreover, blending will be risky, especially in the state's antiquated existing natural gas pipeline system. We should all remember the San Bruno and Aliso Canyon. Bottom line is, SoCalGas cannot be trusted to protect residents in their service territory. We have strong concerns about cost as well.

It should not be lost on this body that SoCalGas is currently proposing a massive 45% rate increase, which will cost ratepayers nearly $5 billion over the next several years and then $2 billion every year thereafter.

Adding expensive hydrogen to the mix will simply drive rates far higher, dramatically increasing rates that are already resulting in ratepayers unable to pay their bills. Finally, SoCalgas plans to build 400 miles of hydrogen pipeline on the backs of ratepayers as part of their Los Angeles link project and is ill conceived.

Any hydrogen pipelines being built should be paid by Sempra shareholders and not ratepayers such as farmers and food production facilities in the San Joaquin Valley, who will not benefit from pipelines designed to serve the La Basin. Simply, we cannot afford the SoCalgas pipeline dream. Thank you.

Thank you. And remind everybody, this is 1 minute for your comments, please.

Hi. Thank you, chair Bennett. I'm Jennifer Hamilton, Vice President of the California Hydrogen Business Council. It was great to see you at our event. I just wanted to make an overall comment around the topic of safety codes and standards as it pertains to hydrogen in General and infrastructure.

And that is to say, I personally been working in the field for about 15 years. But the efforts, of course, go beyond that.

And that there has been very much a concerted effort, and safety is always a top priority when it comes to the use of hydrogen and infrastructure as it has has been used safely, relatively speaking, for decades.

And so that effort continues with these new and emerging uses for hydrogen through organizations, the UsdOE number one, with their safety codes and standards office, the Center for Hydrogen Safety, which houses the hydrogen Safety Panel, which I think my colleague referred to, and through various standards development organizations. And I'd be happy to provide you with resources.

Thank you. Thank you very much.

Morning, Senator Tim Sasseen, Director of market development and public affairs for Ballard Power Systems. We've been producing fuel cell modules for over 45 years, 26 years on California roads, in public buses. We're growing fast, and it is projected by CTE that half of all the buses by 2050 in California will be fuel cell, electric buses.

And that estimate has gone up threefold over the past few years. What the customers are telling us is that they need lower cost hydrogen to make it viable and it needs to be reliable. And the price has not moved in over 20 years. And the monopolistic practices in the industry are contributing a great deal to that.

So I would encourage the Senator, in these intelligent discussions, which have been fantastic, to be aware of those that seek to use regulation to restrict the market and keep this a niche industry with high prices and high barriers to entry. We saw it in 45 volts.

There was only a single player with a few add ons that were looking for a restrictive market to keep it small. And we don't need to be importing hydrogen from the Middle East and keeping prices high here to justify that.

We need to grow hydrogen in a competitive way and give these chances to people like SoCalgas, the Angeles Link project, to show what needs to be be done. And we commend EDF for a sensible approach. Thank you. Thank you.

Last but not least.

Yeah, thank you. Morgan Gonzalez with communities for a better environment. I'm a resident of a very heavy energy infrastructure area, Wilmington CD 15 for Los Angeles.

I am very eager to see the economic and energy benefits of hydrogen, but it's frustrating to see that these dense urban communities are going to be the guinea pigs for this hydrogen infrastructure. And especially given the safety concerns that have been risen.

I think that regulation needs to be incredibly severe, even on the heavier end, because ultimately, Wilmington is no stranger to combustion, especially with the energy infrastructure there. And those health impacts have been felt for decades and generations. I mean, there's not a person alive in Wilmington that remembers the time before refineries.

And even then with the natural gas transition, it was. We just recently had a gas truck explosion and, you know, people were sent to the hospital. Firefighters actually died. It's very important that we don't just full steam ahead in the sake of energy competitiveness. There has to be a safety aspect for community as well. Thank you.

Thank you very much.

Now, last but not least.

Sorry. Hi, Mister chair, and thank you for, you know, having this conversation today. But as you and Assembly Member Petrie Norris had mentioned multiple times, you know, we do need all of the stakeholders at the table, and we need everyone's input in order to collectively solve this crisis and achieve California's climate goals.

And notably, you know, the input that was not being heard and the voices that weren't being valued today were that of community Members, especially frontline communities that are going to be impacted by hydrogen infrastructure and these projects. The discussion today was about leaks and pipelines and right of way, all issues that impact frontline communities.

First, we aren't talking about, you know, bullets going into hydrogen tanks in the Wild West, but we're talking about Low income communities of color with existing, confounding, sorry, communities of color that are currently dealing with cumulative impacts. And so when you asked about the biggest risks, we don't see those as being to the market or the industry.

The biggest risks are allowing these vulnerable communities to become sacrifice zones. And like my colleague had said, that's something that we are really urging you guys to consider and for conversations moving forward to make sure that community is involved and invited to this table.

Thank you.

I do want to let you know that we did invite some social justice groups to participate, and they just felt like they did not have enough background on pipeline technology to be productive Members of this. But we're very open to trying to hear, and we still want to hear. And so we really appreciate you being here today.

And they have participated in our past panels, and we'll try to make sure they continue to be active participants in the conversation. So thank you for being here today. And with that, now this meeting is adjourned. Thank you all very much.