July 07, 2022 • Paul Rodden • Season: 2022 • Episode: 128
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Welcome to The Hydrogen Podcast!
In episode 128, Investorplace.com has some exciting news for the hydrogen investor. I'll review their talking points and give my thoughts on today's hydrogen podcast.
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Investorplace.com has some exciting news for the hydrogen investor. I'll review their talking points and give my thoughts on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an article in investorplace.com, Luke Lango writes Big Oil is betting big on hydrogen. The author writes throughout the 1900s oil made some people fortunes, but now those who made fortunes in oil last century will make even more by betting on an oil killer. And that's hydrogen, Shell, BP, Chevron and Total energies all created multi 100 billion dollar empires as oil became the modern economies centerpiece. But now even they are preparing for a much different future. Now he makes sure before going any further that he is well aware of hydrogens backstory, it's been touted as a viable clean energy source since the 1970s. Yet since then, its power still hasn't been harnessed. And the past 50 years, the hydrogen economy has been characterized by little more than a series of false starts. But there comes a time when each new technology has its quote, unquote, moment, when it proves itself and goes on to change the world. Thanks to the European war that's broken global supply chains, we sit among a global energy crisis, hydrocarbons won't fix it, there simply isn't enough to go around, which is resulting in sky high prices. Now, I want to break away from this for a little bit, because I think it's important to note that there is enough oil and gas globally without Russia and Ukraine involved. But the problem really boils down to supply chain logistics and refinery capacity. But regardless of that, he is correct in saying that we are going through some sky high prices right now, he continues by saying solar won't fix the crisis.
The cost of solar panels simply remains too high. Wind won't solve it either. Wind Turbine efficacy is too low. So what we'll fix today's energy crisis, he says hydrogen and understand why we need to revisit chemistry 101. Hydrogen is the lightest element in the universe, you can fit a lot more of its atoms into a finite space. And as a result, a hydrogen power source will be infinitely more energy dense than a power source made with anything else. And that has enormous implications. Energy density defines an energy source. So indeed, you could say energy density determines everything, and transportation markets, energy density determines driving ranges and refuel times, a vehicle with more energy density will drive farther and refuel faster. Therefore, hydrogen powered vehicles will drive farther and refuel much faster than EVs and gas powered cars, or in stationary markets. Energy density determines the consistency and robustness of power output, an energy storage system with more energy density will last longer and provide more reliable power. So hydrogen storage solutions can provide more consistent power than battery energy storage systems. But energy density is only one of hydrogens major value propositions, another hydrogen essentially has infinite abundance. So long as we have water two hydrogen atoms, one oxygen atom will have hydrogen power, over 70% of the Earth is covered in water, there will never be a shortage of its potential energy.
And I think I'm going to break away from this for just one second, and state that there is something different about hydrogen in this case, and that is if you take say a hydrocarbon and you burn it, you are essentially destroying what it was. And it can no longer be that, for example, gasoline, when you ignite gasoline, you ignite some of the hydrogen and the rest of the hydrogen and carbon gets released into the atmosphere. But with pure hydrogen, that hydrogen atom remains intact and will go on to just rebond again with something else. So when you hear that hydrogen is infinitely abundant, that is not an exaggeration, but a scientific fact. The author goes on to say And like other alternative energy sources, such as solar and wind, hydrogen is storagable, packagable and transportable. Hydrogen can be produced via electrolysis at giant factories and subsequently can be one stored in a container and sent across oceans on giant ships like oil pumped into existing natural gas pipelines to homes and businesses already connected to an existing grid like natural gas, or three pumped into existing pipelines to arrive at fuel pumps across the globe like gas. The oil majors have recently made it very clear that they're betting big on hydrogen as the future of energy. BP is leading a $36 billion green hydrogen project in Australia.
Total Energies has joined a venture that plans to invest up to $50 billion in green hydrogen over the next decade. Chevron has committed to spending billions of its own dollars on hydrogen Research and Production. And Shell has started to produce hydrogen at a plant in Germany and plans to expand capacity. Big Oil has spoken hydrogen is oils. Second Act hydrogen is value ads are so big that the author and his team believe that when it soon becomes cost effective and viable, our world will be powered by it. We'll have hydrogen trucks, planes and ships hydrogen to heat our homes and to use his backup power will have hydrogen everything. And to that end, he and his team are convinced that hydrogen stocks will become some of the best performing stocks of the 2020s. Now the astute investor will be asking at this point, why now? After all, the periodic table hasn't changed over the past 50 years. So what has changed that will allow hydrogen to take over in the 2020s? Well, the author and his team believed that the stars have finally quote aligned and the hydrogen economy will tip into hyper growth mode this year. The elephant in the room, of course, is Russia's invasion of Ukraine. This has set oil and natural gas prices to nearly unaffordable levels. Yes, solar and wind aren't quite there in terms of capacity and efficiency.
They can't help the world to fully break away from its hydrocarbon dependence. So in steps hydrogen as the jack of all trades energy source that simultaneously is clean and cheap. It's also powerful and plentiful enough to fulfill the world's energy demand. The geopolitical backdrop has never been more favorable than it is today for hydrogen. At the same time, its costs have plummeted with advanced tech and economies of scale hydrogen fuel cell costs have dropped 60% Over the last 10 years. Deloitte expects these costs to drop below electric battery and combustion engine costs within a few years. And when the author says a few years, he really is talking about two to two and a half years. He says the Tech has dramatically improved technological breakthroughs and falling renewable energy costs have led to a new era of scalable green hydrogen production. Now it can be produced from renewable energy sources like solar and wind cost effectively, it's no longer reliant on natural gas, which was historically used to produce most hydrogen. He says In other words, while the periodic table hasn't changed in the last 50 years, everything else has.
And for the first time, all the growth drivers for hydrogen have shown up at the same time. And here the author quotes Matthew Blieske, Shell's global hydrogen product manager, he says in the past, there was a policy missing or a technology wasn't quite ready, or people weren't so serious about decarbonisation. Today, we don't have those barriers. So with those hurdles removed, the hydrogen economy will tip into its long overdue renaissance in the 2020s. And this will create what Morgan Stanley sees as an $11 trillion hydrogen market in the coming decades. The hydrogen is history as a viable clean energy source is riddled with empty promises and broken dreams. But this time is different. Finally, hydrogen is ready to reshape the world's energy landscape with Ultra affordable, energy dense, reliable and transportable clean energy. It's emerging when every country in the world looks to achieve energy independence, and consequently, it's the only energy source that's able to do so in a cost effective way. And so what is the author's final word on hydrogen? He says investors who bet early on this revolution will win big and in their innovation investor portfolio they're betting big on hydrogen also, but that's not all. He says. They're also betting big on batteries to help redefine the world energy industry over the next decade. He says that's because batteries are the perfect complement to hydrogen, or hydrogen thrives batteries flop, or it flops and batteries thrive. The two will work together over the next 10 years to completely reshape how the world is powered. Okay, so quite a glowing article on the future of hydrogen from Investorplace. And I would be lying if I say this doesn't get me really excited for the future of hydrogen and the hydrogen industry.
But I will say that a lot of this seems to be overly optimistic. And if you listen to my critique on JP Morgan's 2022 Energy Outlook, you know that the energy industry still has some major obstacles yet to hurdle. And because of that, I think the timeline in this article is a bit too optimistic. Now, I fully believe that there will be major, major advances in this decade. And just in the last two years of this decade, we've already seen massive leaps forward in technology. And I do believe that trend is going to continue. But to see the hydrogen Industry and Market permeate to the extent that this article is talking about, I believe, is going to take much longer than the next eight years, I fully believe that will have to take at least the next 20 years, if for no other reason than this is the biggest energy transition in history. And the other thing that this article really doesn't take into consideration is the role that hydrocarbons will continue to play in the hydrogen industry over the next 30 to 40 years, especially as the solid carbon market continues to grow.
All right, that's it for me, everyone. If you have a second, I would really appreciate it. If you can leave a good review on whatever platform it is that you listen to Apple, podcasts, Spotify, Google, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you're always welcome to email me directly at firstname.lastname@example.org. And as always, take care. Stay safe. I'll talk to you later.
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