Paul Rodden • Season: 2024 • Episode: 334
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Welcome to The Hydrogen Podcast!
In episode 334, Doomberg dives head first into natural hydrogen. Will they like what they find, or will they continue their narrow scope approach to the hydrogen economy? I’ll go over this news and give my thoughts on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
Doomberg dives head first into natural hydrogen. Will they like what they find, or will they continue their narrow scope approach to the hydrogen economy? I’ll go over this news 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 doomberg.com natural hydrogen, something or nothing? A breakthrough would redefine hydrogen as a fuel, no longer just an energy carrier. Doomberg writes, We have long held mixed views on the so-called hydrogen economy. Hydrogen could make for a reasonable carrier of energy if created with a fleet of nuclear reactors. It produces only water as a byproduct when burned, circumventing the whole carbon emissions thing, and there are few technical barriers to its wide deployment in society. Some 70 million tons of the stuff are produced in pure form globally each year—mainly for use in the synthesis of ammonia and certain refinery applications—and a further several dozen million tons are produced as gas mixtures. Handling, storage, and transportation challenges have largely been solved (with the notable exception of shipping on the seas, which remains a vexing constraint).
We concluded a piece on the topic in mid-2022 as follows, saying We are fully supportive of developing the ancillary technologies needed to exploit the utopian potential of a massive nuclear energy renaissance. Eventually, physics will demand a return to sensemaking. When that happens, the option to pursue a hydrogen economy will no doubt be valuable. At the same time, we have had more than our fair share of fun poking holes in various cockamamie schemes involving the use of intermittent renewables to produce hydrogen, approaches doomed to a death of a thousand cuts of inefficiency. Governments around the world seem nonetheless set on wasting scores of billions chasing the impossible, a fact that makes it difficult to take anything associated with the hydrogen economy seriously.
The reigning challenge with leveraging hydrogen as part of our collective energy future has been the need to expend significant upfront energy to produce it. Today, nearly all industrial production of the molecule uses hydrocarbons as the main starting material, and the roundtrip energy efficiency of using hydrogen to power a car or heat a home is quite low. Most people—including us, until quite recently—believed that naturally occurring and economically viable deposits of hydrogen simply did not exist, and we have always been careful to refer to it as a carrier rather than a fuel. But what if everything people thought they knew about hydrogen suddenly got turned on its head? Over the past several months, our readers have been forwarding a flurry of news articles that chronicle the alleged discovery of huge deposits of natural hydrogen all over the world. Such resources are sometimes referred to as either “white” or “gold” hydrogen to signify the minimal hydrocarbons required for their economic extraction. If true, such developments would indeed be a game-changer.
A recent report on OilPrice.com covered one such exciting discovery, and so they write, What are we to make of these claims that, if valid, could meaningfully impact global energy supplies for decades? Will the exploitation of natural hydrogen be the next big thing in energy? Longtime readers of Doomberg will know that we apply a simple five-question framework to assess technology claims that go viral, an approach we’ve applied to alleged breakthroughs in room-temperature superconductors, a new cancer wonder drug, and Toyota’s progress in the development of solid-state batteries. It’s been a few months since we last deployed the technique – let’s drill into these natural hydrogen headlines and see if we strike energy gold. Now, doomberg did a follow up piece on july 22 saying in the mid 2000s soaring natural gas prices in the US triggered a crisis in its heavy manufacturing sector.
After staying flat for the prior decade, domestic gas production fell measurably in 2004 and even further in 2005 down more than 5% from the level seen two years earlier. By December of that year, prices at Henry Hub cross an astonishing $15 per MMBtu, a compelling demonstration of the inelasticity of demand for hydrocarbon fuels. The price spike came on the heels of the publication of Matthew Simmons’ controversial book, The Twilight in the desert, the coming of Saudi oil shock and the world economy, a tome that fed a general. Sense of panic that the world was running out of economically extractable hydrocarbons. Proponents of Simon’s Peak Oil conjecture saw validation in the natural gas market, with many warning that this was just the warm up act for a collapse in the production of comparatively more important liquid sector.
So convinced was the industry of Armageddon arrival the plans to build liquefied natural gas or LNG import facilities along the US Gulf coast were announced and chemical companies jockeyed for investment allocations to head their exposure. The sharp price expansion only served to accelerate the construction schedules of such projects, as ground was breaking on several LNG import terminals, entrepreneurs with an appetite for risk were printing new drilling techniques to work in the Marcellus Shale. Although it was long known to possess an enormous resource of natural gas, the formation was considered by most to lack economic viability. Even after the first commercial wells begin producing gas in 2005 few could internalize the meaning of the breakthrough. In the ensuing years, production of natural gas in the Marcellus and other shales raised higher.
The US became by far the largest producer of the stuff in the world. Plans for new LNG import facilities were shelved. A wave of export terminals were built, and the awesome technical prowess of the US energy sector was validated yet again, having postponed their peak energy forecast by decades. True believers of the concept moved on to predicting when productions in various US shale regions will decline, arguing that the shale bounty is merely a reprieve in various debates doomberg has participated in since publishing Peak Cheap Oil is a myth last December. They are often asked what the next energy miracle will be, although their standard answer is that miracles are not required to ensure oil and gas production continues to grow steadily for decades.
The history of Shale development demonstrates that there is almost always something of significance cooking in industrial labs that can change the trajectory, spotting early signs of that revolutionary potential before it becomes obvious, is the tricky part. Earlier this year, doomberg published an article on one possible breakthrough, creating interesting chatter among industry executives and government officials alike, and natural hydrogen, something or nothing, they applied their standard five question framework to assess the claims that hydrogen exists and massive quantities underground and could potentially be extracted directly. If true, the introduction of new carbon free primary energy source into the world’s existing fuel options would be significant.
And they concluded their analysis as follows, saying, we find ourselves more optimistic about the potential for natural hydrogen than we were when we embarked on the research for that piece. There are huge barriers to this eventual commercial development, but they are hardly insurmountable, given the size of the prize saying we will be keeping close tabs on the developments in the field. In the last six months, since they published that piece, momentum around natural hydrogen, also commonly referred to as geologic hydrogen, has continued to grow. Could this technology be the next shale? What recent developments make them think so, and how might the environmentalist react to this new source of primary energy? If it proves out? Okay. So these two articles are from the free preview tier of doomberg subscription listing, and to read the full reports, you’ll need access behind their paywall.
And for those of you who aren’t familiar, doomsberg is an excellent research platform that publishes content on their findings, and for a large portion of their content, I do agree with much of what they have to say, save their overall criticism of hydrogen. Historically, doomsberg has been at least from what has appeared to me as being extremely opposed to hydrogen development, pointing out its terrible economics, and more often than not, the economics they use were from electrolysis with renewables and not incorporating all the potential technologies. And now it appears that the good news of geologic hydrogen, or at least its potential, has made its way past their wall of skepticism and given them pause to consider this a real world possibility. So what this means for us in the hydrogen transition space is that there are now a few oil and gas hydrogen skeptics that are seeing real possibilities of hydrogen and its relatively easy path to boost fertilizer availability and decarbonize certain industries.
Now, you all know by now, I am very bullish on natural hydrogen, and for doomsberg to see that as a massive bolster to the technology segment of the hydrogen economy. And so for what it’s worth, I applaud doomsberg for applying their rational critique to the natural hydrogen potential without being swayed by their previous viewpoints of hydrogen in general, the upside for natural hydrogen is staggering, but as ARPA E says, much work is still needed and the hydrogen supply chain still needs to be developed, so until we know a good bit more. The current offerings of hydrogen production need to be bolstered and supported.
All right, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
