Hydrogen poised to be energy game changer

Sector exploring climate-friendly move as market shifts to carbon-free power sources

WASHINGTON — Hydrogen as a source of energy is a tough sell. Sixteen years after former president George W. Bush forecast that the age of the hydrogen car was upon us, the world is still waiting.

But facing a market clamoring for carbon-free forms of energy, some within the energy sector are wondering whether hydrogen might hold promise after all.

The Norwegian oil giant Equinor is exploring the possibility of converting some of the company’s huge reserves of natural gas into hydrogen as a means to reduce its carbon emissions (natural gas is composed of hydrogen and carbon). But instead of just using it to power fuel cells in cars — as Bush hoped — Equinor, which has a large presence in Houston, is looking at using hydrogen to fuel power plants and heat homes or as a feedstock for carbon-free liquid fuels.

“We don’t need hydrogen cars because electric cars are so superior,” said Steinar Eikaas, an Equinor vice president. “Where we need it is heavy sectors. With small adjustments gas-powered plants can burn hydrogen.”

Hydrogen presents a potential game changer for oil companies seeking to survive in an emerging

zero-carbon world as governments across the globe tighten restrictions on greenhouse gases produced by fossil fuels in efforts to slow climate change. At the same time, the costs of wind and solar energy continue their rapid decline, adding to the existential threat to oil and natural gas in the decades ahead.

Hydrogen-fueled power plants and homes could offer some competition to renewables while creating a new market for natural gas, which already is routinely converted into hydrogen for products such as fertilizer and rocket fuel. And while converting natural gas to hydrogen produces relatively small amounts of greenhouse gases, those emissions could readily be captured and stored underground.

“It could be the way they preserve their future,” said Alex Klaessig, an analyst at the research and consulting firm IHS Markit. “Europe has ambitious decarbonization polices, and hydrogen would fit in nicely to produce the energy currently produced by natural gas and coal. Japan are Korea are really big on the hydrogen economy.”

Global shift

Another European oil major, Royal Dutch Shell, has partnered with Toyota to supply hydrogen-fueled tractor trailers at the Port of Los Angeles. And companies including the German industrial conglomerate Siemens, the Japanese conglomerate Mitsubishi and utility Southern California Gas are working on using the excess power from wind and solar farms to produce hydrogen by separating it from water through a process known as electrolysis.

Equinor has proposed switching close to 4 million homes in northern England to hydrogen to heat their homes and fuel their stoves, supplied with hydrogen made from natural gas from the company’s fields in the North Sea. Equinor, formerly known as Statoil, also is looking at converting a Dutch gasfired power plant to hydrogen as well as using hydrogen to make liquid fuels for heavy-duty transportation applications, such as jets.

Investment decisions on the proposals are at least a few years off, Eikaas said. For now, Equinor’s execuyears tives and researchers must figure out not only if the economics work, but how they can safely move highly-flammable hydrogen — lest they suffer the same fate as the Hindenburg in 1937, in which a hydrogenfilled airship caught fire and more than 30 people were killed.

For now, many analysts and scholars remain skeptical that hydrogen can be integrated into the world’s energy system anytime soon. Speaking at a Washington think tank last week, Eikaas drew some skeptical questions about whether the technical and financial challenges in building out hydrogen pipelines and other infrastructure would mean a repeat of the quick sputtering out of Bush’s promised hydrogen age.

“I look at hydrogen as the gas of 2050,” said Melanie Kenderdine, a former top official at the Department of Energy and now a senior fellow at the Atlantic Council.

With climate scientists warning the world has 11 to slash greenhouse gas emissions if it is to avoid irreversible damage from climate change, oil companies are trying to prove their low carbon bonafides. Both Exxon Mobil and the Houston independent Occidental Petroleum have entered into partnerships with firms developing direct air capture systems to pull carbon dioxide from the atmosphere.

“All the oil companies have come to terms with the fact they need to get in the low carbon game,” said Whitney Herndon, a senior analyst at the consulting firm Rhodium Group. “They’re trying to look at our operations and say where can we be most cost efficient in this game.”

And they will have plenty of competition.

Just as electric car and battery manufacturer Tesla is looking to push out gasoline-burning cars, other firms are working on developing electrolysis technology to separate the hydrogen and oxygen atoms in water to produce hydrogen. And unlike using natural gas as the feedstock, this technology produces no carbon at all.

NASA experience

NASA has used this technology on its spacecrafts for decades to supply oxygen for astronauts.

For now, making hydrogen from natural gas is cheaper, but that competitive advantage appears likely to diminish over time, potentially reducing the need for natural gas to produce hydrogen, Klaessig, the IHS Markit analyst, said.

“In the future with the incredible cost declines in wind and solar power, (electrolysis) comes into parity,” he said. “I’m not sure gas would be knocked off entirely. If (electrolysis devices) are being run off renewables, they might have intermittency issues (due to weather). It would be a mix.”