The global oil and natural gas industry is focused on developing hydrogen, but California operators are finding the changeover may require negotiating a winding, rocky road as Gov. Gavin Newsom wants to move the carbon neutrality target to 2035 from 2045.

The California Public Utilities Commission (CPUC) recently rejected a joint application by Sempra’s Southern California Gas Co. and San Diego Gas & Electric Co., as well as Pacific Gas and Electric Co. (PG&E) and Southwest Gas Corp. for a proposed hydrogen blending demonstration program. The CPUC called the application “premature and inefficient” but it did not preclude a refiling.

Regulators said they want the utilities to collaborate closer with other stakeholders in the state, such as the California Energy Commission (CEC) and the researchers at the University of California, Riverside (UCR), both of which have completed recent studies relevant to the proposals.          

Guidance was provided in the CPUC’s order, noting that the new filing should take into account “lessons learned” in the CEC and UCR research. The utilities have said they want to “fill in the gaps” in the two studies. For the CPUC, “many fundamental questions remain” because the proposal “is too unclear relative to the scope of work, timing, costs and cost recovery.“

SoCalGas spokesperson Melissa Bailey said the utility sees it as “an opportunity to coordinate with the CEC on current research projects and submit a more robust application that will build upon today’s work, and further accelerate the state’s transition to renewable energy.”     

How much hydrogen can be blended with existing natural gas and renewable natural gas supplies in local utility pipelines is a top priority for the Sempra utilities’ proposed research and development projects. In May, SoCalGas joined with key partners to launch HyDeal LA, an initiative to achieve at-scale green hydrogen procurement at $1.50/kilogram in the Los Angeles Basin by 2030. 

The University of California, Irvine (UCI) has done extensive hydrogen engineering work in the National Fuel Cell Research Center. UCI’s Jack Brouwer directs the advanced power and energy program and the fuel cell center. 

UCI and its research engineers are touting their role in helping to meet California’s climate goals and “remain a leader in green technology,” he said. He emphasized that the state needs government, industry, and academia “working together toward a common purpose.”

In early July, Newsom asked California Air Resources Board Chair Liane Randolph to “evaluate how to achieve carbon neutrality no later than 2035.” He wants the analysis to assess how to reduce or eliminate demand for fossil fuels and end oil extraction in California. 

Brouwer is bullish on the state of U.S. hydrogen development and globally points to Europe, Japan, China and Australia where governments are all committing billions of dollars. 

“I think we are on the precipice of huge growth in the production, distribution, and use of hydrogen to enable high renewable use and zero emissions in all sectors of the economy worldwide,” said Brouwer. ”Corporations all around the world are investing in hydrogen.”