Policies calling for drastic reductions in CO2 emissions in the coming decades have transformed hydrogen from an oil refinery chemical to a top production priority for oil and gas companies.
In a push to stay relevant in a decarbonized future, major oil and petrochemical companies are scrambling to offer hydrogen as a fuel source to replace fossil fuels. Meanwhile, think tanks and universities are focusing on how to clean up hydrogen made from natural gas and bring down the price of “green” hydrogen made by using renewable energy to electrolyze water.
During a Reuters webinar Wednesday, hydrogen experts from London-based BP, Norway’s Equinor and Spain’s Repsol made clear that their companies are not about to be left behind if hydrogen becomes the fuel of the future envisioned by governments.
Shirley Oliveira, vice president of hydrogen services at BP, said her company wants to take a 10% share of clean hydrogen sales in core European markets by 2030.
“We think that hydrogen has a particular role to play in certain industrial sectors … that are hard to abate [for carbon] where they need concentrated high heat energy,” Oliveira said. Hydrogen will also have applications in “heavy duty transportation” through the electrification of trucking and buses using on-board fuel cells, she added.
“We already produce a fair amount of gray hydrogen and have a lot of experience handling gray hydrogen,” Oliveira said, referring to the type of hydrogen produced with steam reforming of methane, which leaves behind CO2.
BP is looking at replacing gray hydrogen with “lower-carbon” — or blue — hydrogen, which would rely on technologies that capture and sequester CO2 in the production process.
“It’s also really important to help shape this market. We see it as a very dynamic. Helping to build demand is absolutely critical,” she said.
Henrik Andersen, vice president of low-carbon technology at Equinor, which supplies 25% of natural gas used in Europe, said the company has ramped up its carbon capture and sequestration (CCS) activities in the last three or four years.
“We want to supply our gas customers with a solution that enables them to meet a net-zero target — and that means CCS and hydrogen. In CCS, the ambition is to capture and store 15 to 30 million tons of carbon dioxide per year,” Anderson said.
Anderson said CCS is embedded in Equinor’s strategy as “one of our key strategic pillars.”
“We really see this as something where we can contribute because of competence and skills. … We are out in the market today with our natural gas products, and the future is really hydrogen,” he said.
Tomas Malango, hydrogen director at Repsol, said hydrogen is also one of his company’s key pillars for decarbonizing, and that Repsol hopes to contribute more to the development of green hydrogen than blue.
“We need to … [use] all the technologies available, look at which one is going to make the transition with the lowest cost for our society, and push technology development, which I think is something that can help us to move faster.
“When we’re talking about green hydrogen, essentially it’s a matter of the cost of energy [to electrolyze], which is 70- something percent of the total cost of the green hydrogen. I think the deployment of the renewable system to support green hydrogen is one of the challenges of green hydrogen deployment itself,” Malango said.
‘Lead Horse’
Also on Wednesday, the Energy Futures Initiative (EFI), a think tank established in 2018 by former U.S. Energy Secretary Ernest J. Moniz, released an 81-page study, “The Future of Clean Hydrogen in the United States.”
Based in part on private interviews with 72 U.S. companies, including investors, the energy industry and manufacturers, the report found broad interest in hydrogen both as a fuel for heavy trucks and as a substitute fuel for gas turbine-powered generation.
The report also reviewed the cost of hydrogen produced from natural gas as compared to hydrogen produced through electrolysis of water, using electricity generated either by wind and solar or nuclear power plants. About three-quarters of hydrogen produced today is from natural gas.
An earlier EFI report, released in conjunction with the AFL-CIO, noted that gray hydrogen, produced from natural gas, could become cleaner blue hydrogen if the carbon dioxide produced by the process were used in other industries or sequestered deep underground. The theme of a webinar that accompanied that report was blue hydrogen as a job creator (See Shale Gas Could Decarbonize Ohio River Industrial Valley Industry).
In introductory remarks at Wednesday’s EFI webinar, held as part of New York City’s Climate Week, Moniz noted that while hydrogen is now a “specialty chemical,” it will be “the lead horse in deep decarbonization” of the economy. It will also be studied as a fuel and as a method of long-term energy storage, he said.
“The reality is, today, we have many, many companies. Some publicly and some below the radar, engaging in hydrogen activities. We thought that a foundation for our future studies would be, in fact, to find out what these companies are thinking, where are they putting their money down, how are they seeing this value chain evolve,” he said, explaining the point of the study and Wednesday’s published report.
Jennifer DiStefano, a project manager and senior analyst for the study, said the interviews led to some new insights into emerging clean hydrogen markets.
“We found that there’s broad-based interest in developing hydrogen technologies across nearly every sector of the economy. Companies ranging from data centers, to cement makers, to transit agencies and traditional oil and gas companies are all exploring hydrogen applications, internally, while also sometimes seeking more ambitious projects through partnerships.
“Second, we found that many firms are developing strategies to repurpose existing assets to use hydrogen to help them move more quickly up the learning curve and also lower their costs,” she said.
DiStefano also noted that the Biden administration’s proposed $3.5 trillion infrastructure bill includes $8 billion over five years to help the industry develop four “hydrogen hubs,” including “a range of hydrogen production pathways.”
In other words, the Department of Energy would be funding projects producing hydrogen from water using renewable electricity, as well as other projects pulling hydrogen from methane and either sequestering the left-over carbon dioxide or finding new industrial applications to consume it.
As for replacing natural gas in pipelines as multiple companies were found to be investigating, DiStefano said the top limit of such blends is thought to be 20% hydrogen without damage to the pipelines.
She said several companies interviewed were developing “heavy-duty hydrogen vehicles” that could be commercialized soon. Those vehicles would include 18-wheeler long distance electric trucks as well as metropolitan electric buses powered with electricity generated by on-board fuel cells.
“Hydrogen offers a particularly compelling decarbonization option, according to our interviews, for fleets of medium- and heavy-duty vehicles, such as buses and long-haul trucks, due to its fast-refueling time and improved range over battery electric vehicles. And during the interviews, some companies were optimistic that buses could serve as a good foundation to strengthen the hydrogen market for heavy-duty vehicles since buses have the combination of high duty cycles and also the availability of public funding,” she said.
This rush to hydrogen — now energized by the upcoming COP 26 UN conference in Glasgow beginning Nov. 1 — accelerated in the U.S. early in the year with the Biden administration’s announced goals of reducing carbon emissions 50% by 2030 and reaching net-zero emissions by 2050. The DOE announced a hydrogen shot challenge in June. (See Granholm Announces R&D into Green Hydrogen as 1st ‘Energy Earthshot’.)
And the UN’s Climate Change 2021 Assessment issued in August made it clear that reductions in carbon emissions will be crucial to a livable planet. (See Too Late to Stop Climate Change, UN Report Says).