Paul Rodden • Season: 2025 • Episode: 395
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Welcome to The Hydrogen Podcast!
🚨 BP is making history! The oil supermajor just became the first to invest in natural hydrogen (geologic/white hydrogen) through Snowfox Discovery, alongside Rio Tinto and Oxford Science Enterprises. This game-changing shift could disrupt the entire hydrogen economy, offering cheaper, scalable, and infrastructure-ready hydrogen that competes with fossil fuels.
🌍 In this episode of The Hydrogen Podcast, I break down:
✅ Why BP and Rio Tinto are betting on natural hydrogen
✅ How natural hydrogen could cost as low as $0.50/kg (compared to $4-6/kg for green hydrogen!)
✅ How BP plans to repurpose oil & gas infrastructure for hydrogen drilling
✅ Why this could be the biggest energy shift since the shale revolution
✅ How this disrupts green and blue hydrogen investments
✅ The future of hydrogen as a mainstream fuel source
Is natural hydrogen the missing link to scaling hydrogen without massive renewable investments? Let’s dive in!
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#Hydrogen #NaturalHydrogen #BP #RioTinto #GeologicHydrogen #GreenHydrogen #HydrogenEconomy #CleanEnergy #WhiteHydrogen #HydrogenPodcast #ShaleRevolution #RenewableEnergy #FutureOfEnergy
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Paul Rodden
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Transcript:
The hydrogen industry is at a critical turning point. For years, the focus has been on producing hydrogen through electrolysis, using renewable electricity, or reforming natural gas with carbon capture. These methods have received billions in government subsidies and corporate investment, but they still face major cost and scalability challenges. Now, a new frontier is emerging—natural hydrogen, also known as geologic or white hydrogen. Unlike conventional hydrogen production methods, natural hydrogen is found in underground reservoirs, much like oil and natural gas, and could be extracted at a fraction of the cost.
This potential breakthrough is why bp has made history as the first supermajor oil and gas company to invest in natural hydrogen development. In January 2025, bp Ventures led the Series-A funding round for Snowfox Discovery, a company dedicated to exploring and producing naturally occurring hydrogen. This investment, supported by Rio Tinto and Oxford Science Enterprises, marks a significant shift in the energy landscape.
Unlike its competitors, such as TotalEnergies, Shell, and Chevron, which have focused heavily on green hydrogen—requiring massive investments in wind, solar, and electrolysis—bp has taken a different approach. By betting on natural hydrogen, it is looking to leverage existing drilling expertise, repurpose infrastructure, and bring down the cost of hydrogen production faster than traditional methods. If natural hydrogen proves to be viable on a commercial scale, it could disrupt the entire hydrogen economy, making hydrogen competitive with hydrocarbons without the need for large-scale renewable energy projects.
For Rio Tinto, the investment is equally strategic. The mining giant sees natural hydrogen as a potential fuel source for its massive global operations, reducing reliance on diesel and coal-powered processes while improving sustainability and cutting costs. If successful, natural hydrogen could provide an alternative to traditional fuel sources without requiring expensive infrastructure transitions.
In this episode, I’ll break down why bp and Rio Tinto are making this bet, what it means for the future of hydrogen, and how this could reshape global energy markets. I’ll dive deep into the economic and technical implications, discuss the cost advantages compared to green and blue hydrogen, and explore what this means for other energy giants who may soon follow bp’s lead. All of this on todays Hydrogen Podcast
Why bp Ventures and Rio Tinto Are Betting on Natural Hydrogen
The decision by bp Ventures and Rio Tinto to invest in Snowfox Discovery marks a pivotal moment in the hydrogen industry. These two global powerhouses—one from the energy sector and the other from the mining industry—are making a strategic move into natural hydrogen, recognizing its potential to be a game-changer in the quest for clean, cost-effective energy. Their investment signals a shift in priorities, away from high-cost hydrogen production methods and toward a naturally occurring, lower-cost alternative that could reshape the entire hydrogen supply chain.
For both companies, the rationale behind this investment is driven by several key factors:
1. Cost-Effective Production Compared to Other Hydrogen Sources
One of the biggest hurdles to hydrogen adoption has been its high production cost, which limits its competitiveness against hydrocarbon-based fuels. The investment in natural hydrogen is an acknowledgment that the industry must find a cost-effective way to scale up production without relying on extensive government subsidies or high electricity costs.
Currently, hydrogen is produced in three main ways:
• Green Hydrogen – Produced through electrolysis, powered by renewable electricity. It is the cleanest but also the most expensive method, with production costs ranging between $4 and $6 per kilogram due to the high price of renewable electricity and electrolyzer technology.
• Blue Hydrogen – Derived from natural gas reforming with carbon capture and storage. While it is cheaper than green hydrogen, costs still range between $1.50 and $2.50 per kilogram, and it relies on fossil fuel infrastructure.
• Gray Hydrogen – Produced from natural gas without carbon capture. This is the most widely used but the most polluting method, with costs as low as $1 per kilogram, though it emits large amounts of CO₂.
By contrast, natural hydrogen has the potential to bypass the need for energy-intensive production processes. If early cost estimates hold true, it could be extracted at $0.50 to $1.50 per kilogram, making it not only cheaper than green hydrogen but potentially cheaper than all existing hydrogen production methods, including gray hydrogen.
From a business standpoint, this makes natural hydrogen highly attractive for companies looking to scale up hydrogen production while keeping costs low. For bp, this aligns with its strategy of increasing hydrogen output while maintaining profitability. For Rio Tinto, it offers a lower-cost fuel source for mining operations, helping to cut operational expenses and improve sustainability.
2. Scaling Hydrogen Without Massive Renewable Energy Investments
One of the biggest challenges in scaling green hydrogen production is the sheer amount of renewable energy required. To meet global hydrogen demand with electrolysis, the world would need an enormous buildout of wind, solar, and hydroelectric capacity, requiring trillions of dollars in investment.
For energy companies like bp, this presents a significant bottleneck. While bp is investing in renewables, scaling green hydrogen would require a huge expansion of clean electricity generation, adding complexity, cost, and time to its hydrogen strategy.
Natural hydrogen sidesteps this issue entirely. Instead of requiring vast amounts of renewable electricity, it can be extracted directly from the earth, just like natural gas. This means that hydrogen production could be scaled up faster and more efficiently, without the need for massive infrastructure investments in wind and solar farms or grid expansions.
From a strategic perspective, this allows bp to diversify its hydrogen portfolio—continuing to develop green hydrogen projects where feasible while also exploring a lower-cost, lower-risk alternative that could be commercialized much sooner.
3. Utilizing Existing Oil and Gas Infrastructure
One of the key reasons bp is well-positioned to capitalize on natural hydrogen is its expertise in oil and gas extraction. The same drilling and geological mapping techniques used in the fossil fuel industry can be adapted to locate and extract hydrogen from underground reservoirs.
This gives companies like bp a significant advantage, as they can repurpose existing infrastructure, pipelines, and drilling expertise rather than having to build entirely new hydrogen production facilities from scratch.
For Rio Tinto, this infrastructure advantage is also relevant. The company operates large-scale mining operations in remote areas, where fuel and energy supply chains are a major cost factor. If natural hydrogen extraction sites can be developed near mining hubs, Rio Tinto could cut its reliance on diesel, reducing costs and carbon emissions in the process.
4. Strategic Positioning for the Future Hydrogen Economy
Both bp and Rio Tinto recognize that hydrogen will play a major role in the future energy landscape. The global push toward low-carbon industrial processes, heavy transport electrification, and energy storage means that hydrogen demand is set to grow exponentially over the coming decades.
However, not all hydrogen will be priced equally, and cost competitiveness will be key to widespread adoption. By investing in natural hydrogen now, these companies are positioning themselves to be first movers in a sector that could see massive growth.
For bp, this investment helps diversify its clean energy portfolio, ensuring that it remains competitive in the hydrogen sector without being overly dependent on expensive green hydrogen projects. It also provides a potential hedge against policy shifts or energy price fluctuations that could impact electrolysis-based hydrogen production.
For Rio Tinto, securing a low-cost, clean hydrogen supply could be the key to decarbonizing its mining and refining operations, allowing the company to reduce its reliance on diesel-powered machinery and coal-based steel production. This aligns with its broader strategy of improving sustainability and meeting emissions reduction targets set by both governments and investors.
5. Addressing Energy Security and Supply Chain Resilience
Another crucial factor driving this investment is energy security. The global energy crisis following recent geopolitical events has highlighted the risks of over-reliance on imported fuels. For industrial players like Rio Tinto, which depends on a stable energy supply for its mining operations, securing a domestic, low-cost hydrogen source would be a significant advantage.
For bp, natural hydrogen presents an opportunity to develop a locally sourced, geopolitically independent hydrogen supply, reducing reliance on volatile energy markets. This is particularly important as many governments push for energy independence, seeking to reduce reliance on imported hydrocarbons and improve domestic production capabilities.
The Road Ahead: What This Means for the Global Hydrogen Economy
The discovery and commercialization of natural hydrogen could fundamentally reshape the global energy landscape. If costs remain at the lower end of projections, it has the potential to compete directly with hydrocarbons, making hydrogen a truly cost-effective energy carrier for the first time in history. This could accelerate the transition toward a hydrogen-based economy, where hydrogen serves as a primary fuel source for industrial processes, transportation, and power generation.
However, significant challenges remain. While early research suggests that natural hydrogen reserves are vast, further exploration is needed to determine the true scale and commercial viability of these deposits. Extraction techniques must be refined to ensure sustainable and environmentally responsible development, and regulatory frameworks will need to adapt to accommodate new hydrogen production methods.
As we move forward, this technology could become as disruptive as shale gas was to the oil and gas industry in the 2000s. If successful, natural hydrogen could redefine the economics of hydrogen production, bringing us closer to a clean energy future at a pace faster than anyone expected.p
Alright, 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 you listen to. Apple podcasts, Spotify, Google, YouTube, etc. That would be a tremendous help to the show. And as always if you ever have any feedback, you are welcome to email me directly at info@thehydrogepodcast.com. So until next time, keep your eyes up and honor one another.
