Indiana’s state motto is “America’s Crossroads”. This is an apt description of our current state of energy transition. We have long benefited from our state’s robust, reliable and inexpensive energy resources. Indiana, from the early 1880s, was an energy innovator starting with natural gas production that led to boom towns like Gas City. The first long-distance gas pipeline in the United States was built to connect gas from Indiana to the Chicago market. This is why US Steel decided to locate its operations in northwest Indiana.
Throughout the 1900s, it was our abundance of coal that provided low-cost electricity. This has attracted and supported a diversity of energy-intensive industries, from steel and automobiles to chemicals and pharmaceuticals. During this period, Indiana became the nation’s leading manufacturing state, both in terms of GDP and jobs.
In the 2000s, spurred by a mix of federal regulations and technological innovations, Indiana began its transition to low-carbon energy options. In 2006, Governor Daniels released the Hoosier Homegrown Energy Plan, the state’s first comprehensive energy strategy. He called for a holistic approach to energy above favoring resources from local sources, including renewables, biofuels, clean coal and even battery storage. This led to billions in new energy investments, including: 1,000 megawatts of wind generation in northern Indiana (the largest in the country at the time), 15 biofuel production facilities scattered throughout the state and the nation’s most advanced coal gasification plant. These pioneering projects prepared Indiana for where we find ourselves today.
In the mid-2000s, the emergence of horizontal drilling, or “fracking,” led to a renaissance in gas production in the United States that dramatically lowered natural gas prices. It generated billions in economic growth for states like Ohio, Pennsylvania, Texas, Oklahoma and others. Unfortunately, Indiana’s shale gas reserves have proven harder to reach and remain largely under-exploited to this day. Falling natural gas prices coupled with increased federal coal regulations have eroded Indiana’s competitive advantage in low-cost energy. This has led to a period of rising electricity prices, with industrial rates more than doubling since 2005. Indiana has gone from the 3rd cheapest energy state to the middle of the pack today.
This short history lesson is meant as a reminder that Indiana has a long history of energy innovation. Faced with rising prices due to resource scarcity, geopolitics and regulations, the Hoosiers have innovated new methods or sought new sources to produce reliable energy at low cost. Today, as industry and governments search for low-carbon energy options, there is one fuel that is rapidly gaining traction in markets around the world: hydrogen.
Hydrogen has the potential to generate low or even zero carbon power while maintaining high reliability and energy density similar to that of natural gas. Moreover, hydrogen can be produced in several ways at different levels of carbon neutrality. It can be used as a supplement to natural gas in factories or power stations producing electricity. And hydrogen can power all modes of transport (planes, trains, automobiles, boats, drones, etc.).
A number of Indiana companies, including Cummins, BP, Rolls Royce, Toyota and many others, are already investing in hydrogen technology. Key government and nonprofit stakeholders led by the Indiana Economic Development Corp., Purdue University and Energy Systems Network are looking for ways to accelerate and connect these investments across Indiana. The goal is to establish a hydrogen economy in Indiana that will serve as a national hub generating billions in capital investment and thousands of jobs. There is no doubt that hydrogen will play a major role in Indiana’s energy future. Now is the time to plan and invest. As we have done in the past, Hoosiers should again be a pioneer in energy innovation.