Justin Heath, Resonates’ Head of Corporate Affairs and resident geologist, shares his insights from the 2024 World Hydrogen Congress in Copenhagen where he was supporting host and client, World Hydrogen Leaders, during World Hydrogen Week.
In the recent rush to research and develop technologies to synthesise hydrogen, the extraction of geological hydrogen has often been overlooked. Whether you call it geologic, natural, white or gold, its occurrence all over the world has been known since Roman times. Historical references, such as The Eternal Flames of Mount Chimaera in Turkey, have even become major tourist attractions.
At World Hydrogen Week (WHW) in Copenhagen this imbalance was addressed with sessions ranging from a masterclass on white hydrogen by Stephen Harrison to an expert panel entitled natural hydrogen: the wildcard of the energy transition.
These sessions explained how natural hydrogen is produced underground through geological or biological reactions and that, until recently, it has mostly been found as a byproduct – or even a nuisance – while exploring for minerals, oil and gas. The focus is now shifting, however, to active prospecting for natural hydrogen as a potentially abundant, low carbon energy and feedstock source.
The US Geological Survey began formal investigation of natural hydrogen resources in 2021. By 2024, active exploration campaigns are ongoing in Australia, Brazil, Colombia, the US, and various countries in Europe and Asia.
The World Hydrogen Congress (WHC) agenda also highlighted the simplicity and low OPEX of natural hydrogen extraction compared to many technological processes – whether recommissioning wells with historical evidence of hydrogen (“shows”), or drilling new wells. Analysts agree that the differences between exploring for natural hydrogen and natural gas are “relatively minor.”
As such, natural hydrogen is more of a commodity than a hardware play. The investment and risk profile is not about whether your technology will work or scale. Rather, it depends on whether you drill your well in the right place and if it turns out to be a gusher or bone dry. There is a clear distinction between probabilistic exploration CAPEX and predictable production OPEX.
While this exploration risk, and the maths behind it, is well precedented and understood by extractive companies, analysts and investors, it requires a different mindset than the tech sector. The 2024 WHC saw a meeting of these minds and a growing recognition of how white hydrogen could provide a baseload to the many other colours and sources within the energy rainbow.
Tom Sandison, Corporate Development Manager – Energy Transition at Shell, who moderated the WHC expert panel, said: “I am incredibly excited by the potential I see for natural hydrogen … of course there is still much to answer, and explore for, and that’s what makes this sector so exciting.” That positivity was shared both by fellow panellists, Owain Jackson, Morten Stahl and Michael Hession, and during keen questioning from the audience.
According to S&P Global Commodity Insights “geologic hydrogen’s potential as a decarbonization fuel has spurred millions in investment and, as of October 2023, no fewer than 10 exploration companies are looking to monetize its tantalizing prospects.” These numbers continue to rise rapidly, with subsequent investments including H2Au and Koloma.
In February 2024, UK-based natural hydrogen exploration company, H2Au, secured its first funding round through South Africa’s Hosken Consolidated Investments (JSE: HCI). H2Au’s CEO, Owain Jackson, comments: “This commitment, from a respected investor with 50 years of experience in primary resources, brings a strong endorsement for H2Au and the natural hydrogen industry. With a portfolio spanning key regions like the USA and Africa, H2Au is strategically positioned to tap into some of the largest potential reserves of natural hydrogen, offering a low-cost, sustainable alternative to traditional energy sources.”
More recently, on October 15, Bill Gates-backed Koloma secured US$ 50 million of strategic investment, led by Mitsubishi Heavy Industries and Osaka Gas. Chief Commercial Officer, Erik Scher, sees natural hydrogen as “complimentary to the other secondary hydrogen sources that are being developed and deployed, each of which has its own best uses.”
S&P Global projects worldwide demand for hydrogen to rise from 97 million megatons per year in 2023, which is primarily used in the industrial sector, to 119 million megatons per year in 2030 and 265 million megatons per year in 2050. They predict that the mix will shift to emergent low-carbon hydrogen pathways, with fossil-fuelled hydrogen production declining from 2037. Geologic hydrogen could theoretically facilitate meeting this future demand.
They cite Professor Geoffrey Ellis, from the US Geological Survey. “There’s a very wide range of output, ranging from 1000s of megatons to billions of megatons,” most of which is inaccessible. But the amount that may be available is significant.
Ellis calculates that, assuming a middle ground of 10 million megatons – with 2% or 3% physically and economically extractable – then natural hydrogen could supply more than 500 times S&P Global’s projected global demand for 2050 (265 million megatons per year) and continue doing so for hundreds of years.
S&P Global summarises: “Cheap, clean geologic hydrogen would theoretically increase market penetration in industry, transportation, and power generation, potentially reducing emissions without a significant impact on cost.”
Nadim Chaudhry, CEO of World Hydrogen Leaders concludes, “Large energy consumers are increasingly turning to hydrogen as a suitable alternative to current energy sources. Hydrogen is going to be one of the fastest growing global markets of the next decade and discussions at the 2024 World Hydrogen Congress confirm white as a crucial colour in the hydrogen rainbow.”
Part of S&P Global Commodity Insights, World Hydrogen Leaders (WHL) brings together global energy decision-makers to help each other navigate and de-risk the pathway to the clean hydrogen energy transition. WHL hosts live events around the globe that attract thousands of visitors annually. World Hydrogen Week and the World Hydrogen Congress enable cross-sector interaction to increase hydrogen investment and production while reducing its costs.
The 5-day event was one of the largest and most influential in the industry and hosted over 3,500 attendees from 50 countries.
Keynote speakers included well recognised hydrogen trailblazers from Fortescue Future Industries, Yara Clean Ammonia, European Commission, Volvo Trucks, EY, Santander, ExxonMobil, Equinor and Topsoe.
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