Published Wednesday, January 18, 2023 in the Northwest Labor Press
by Colin Staub
State building trades councils in Oregon and Washington are backing plans by Obsidian Renewables to produce, store and transport hydrogen in the Pacific Northwest.
Oregon State Building and Construction Trades Council, Washington State Building and Construction Trades Council and Pendleton Building and Construction Trades Council signed a memorandum of understanding (MOU) Dec. 2 with Obsidian Renewables covering its proposed Obsidian Pacific Northwest Hydrogen Hub. The project would include the construction of two production plants and a network of pipelines to deliver the fuel to customers. The MOU says Obsidian will negotiate with the councils to reach a project labor agreement covering the project.
“I think that demonstrates their commitment to us and to the state, and the skilled workforce the state has to offer,” said Robert Camarillo, executive secretary of the Oregon State Building and Construction Trades Council. Camarillo said other developers are considering similar projects, but only Obsidian has approached the building trades councils and signed an MOU.
“They have committed to do the right thing—hire local workers and support local workers in these communities,” Camarillo said.
The project would also dramatically increase solar and wind power production to power the hydrogen plants. Obsidian would add 1 gigawatt each of new solar farms in Washington and Oregon and 1 gigawatt of new wind farms in each state as well, which it says would double current solar production and increase wind production by 25%.
All that infrastructure adds up to a lot of building trades work, over a buildout period of four to five years. David Brown, senior principal at Obsidian Renewables, estimates the solar and wind construction will provide at least 500 jobs, and the hydrogen plant construction will provide 50 to 100 jobs. Additional phases, like constructing underground hydrogen storage pipes and pipelines for transportation, would create further building trades work.
“We’ve committed that all of those jobs will be union jobs,” Brown said.
The entire scope of the trades involved in construction isn’t finalized, but the wind and energy installations would certainly include electricians, laborers and operating engineers. And the pipeline work would at least involve pipefitters, laborers and electricians.
Details like the exact apprenticeship utilization and wage rates would be negotiated as part of the project labor agreement, Camarillo said.
Headquartered in Lake Oswego, Obsidian was founded 20 years ago with a rather different focus. The company did financial legal work, handling bankruptcy and fraud cases and working as a court appointed receiver trustee. But Brown says he always had a strong interest in renewable energy, so the company launched a renewable energy division around 2007. Since then, the company has shifted to focus nearly exclusively on renewable energy, completing smaller solar installations around Oregon. The company is currently developing a solar project at Fort Rock, called the Obsidian Solar Center. The company has a team of nine staff members, and is planning to grow with the hydrogen project.
Known as the Obsidian Pacific Northwest Hydrogen Hub, the project would center on hydrogen production plants in Hermiston, Oregon, and Moses Lake, Washington. They’ll be electrolytic hydrogen facilities, meaning they’ll use electricity to produce about 175 metric tons per day of hydrogen per plant. That electricity will be primarily self-supplied by the solar and wind farms, so the hydrogen will be considered green energy.
The hub also includes a storage, collection and distribution pipeline. In the first phase of the pipeline, Obsidian anticipates installing about 50 miles of pipe in Grant County, Washington, and Umatilla County, Oregon, surrounding each anchor site. The pipeline will deliver hydrogen to customers like industrial manufacturers who would locate near the production plants. In later phases, Obsidian anticipates extending the pipeline to transport hydrogen to customers around the Northwest.
Obsidian also envisions a handful of smaller production plants in the region.
All told, Brown estimates the project will cost more than $10 billion with its current plans.
The company is applying for $700 million in grant funds from the U.S. Department of Energy, money made available through the infrastructure bill Congress approved in 2020. The project would also qualify for about $3.5 billion in tax credits through the Inflation Reduction Act that was signed last year.
Obsidian is working through local land use approvals, but Brown says the project could break ground in about two and a half years.
The renewable energy project would likely have to meet some wage and apprenticeship requirements even without the company committing to a project labor agreement. Oregon lawmakers in 2021 passed legislation setting labor standards for energy projects producing or storing 10 megawatts or more. The requirements include paying prevailing wage, participating in state-registered apprenticeship programs, and ensuring that at least 15% of the total work hours are performed by apprentices. Although those aren’t requirements in Washington, that state’s 2019 Clean Energy Transformation Act created state and local tax breaks for clean energy construction projects that use the same responsible labor standards.
But for Obsidian, working with labor has other benefits. Brown said the professionalism, training and safety record of union outfits is something Obsidian wants on its job sites. The MOU also commits the building trades councils to support and prioritize the project, which Camarillo said can include attending state or local government meetings about the project and testifying in support.
“I feel very strongly that there are significant and tangible advantages to make our project better if we bring labor in early, and so that’s what we’ve done,” Brown said.