March 07, 2022 • Paul Rodden • Season: 2022 • Episode: 96
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In episode 096, Johnson Matthey and 8 Rivers Capital collaborate on producing clean hydrogen. And as Houston still have a leg up in being the first and major hydrogen hub in the United States, all of this on today’s hydrogen podcast.
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Johnson Matthey and 8 Rivers Capital collaborate on producing clean hydrogen. And as Houston still have a leg up in being the first and major hydrogen hub in the United States, all of this 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 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 a press release on March 3, Johnson Matthey and 8 Rivers Capital two global leaders in sustainable technologies have entered into a memorandum of understanding to collaborate towards the commercialization of eight rivers clean hydrogen process. This collaboration will combine eight rivers carbon capture technology, with Johnson Matthey award winning technology for producing blue hydrogen, the innovative technologies LCH from Johnson Matthey, and 8RH2 from eight rivers capital integrated solution is a highly efficient process to produce clean hydrogen, and is ready to be deployed today addressing the world’s netzero needs immediately.
This collaboration aims to accelerate the rollout of global projects producing clean fuels, incorporating up to nearly 100% carbon capture. These Clean Fuels could include hydrogen, ammonia, and sustainable aviation fuels. Eight rivers is leading and supporting deployments of several decarbonisation projects in the United States, United Kingdom, Australia and Asia, and will bring both its 8RH2 technology and project expertise to this collaboration. Johnson Matthey LCH technology is based on a world class auto thermal and gas heated reforming technologies, which enable the production of hydrogen with 98% less emissions when compared to conventional technology. As a member of the Sustainable markets initiative, both Johnson Matthey and eight rivers have pledged to invest in clean hydrogen technologies. This collaboration will increase technology options for clean hydrogen production, and enable wider access to eight rivers and Johnson Matthey industry leading technologies.
Jane Toogood, Chief Executive of Johnson Mattheys efficient natural resources sector said Johnson Matthey is a world leader in syngas and hydrogen technologies. And working with eight rivers provides an exciting opportunity to advance the rollout of low carbon technologies. We’re delighted that eight Rivers has recognized the differentiated value our LCH can bring to their technology. This collaboration will help JM further strengthen our leading position in deploying low emission hydrogen technologies at scale. Cam Hosie, Chief Executive of eight rivers capital said hydrogen will play a critical role in helping the world to achieve Net Zero targets by addressing hard to decarbonize sectors from fertilizer manufacturer to global shipping fleets. Eight Rivers has been driving the energy transition for a decade and working together with Johnson Matthey will enable collaboration on future low emission global hydrogen projects.
Okay, so some positive news regarding Johnson Matthey and the eight rivers collaboration. And while I know this is still new, I would like to know more about where they’re looking to implement their collaborative technologies. Next, in an article from the Houston Chronicle, Houston’s plans for hydrogen have faced green competition. James Osborn, a staff writer for the Houston Chronicle writes, oil companies are moving quickly to establish a global hydrogen energy industry with Houston and its abundant supplies of cheap natural gas as the logical hub for the United States. Convert the natural gas which is composed of hydrogen and carbon to zero carbon hydrogen, and you have a fuel that can be used to power hard to electrify industries, such as heavy manufacturing, trucking and shipping. The resulting carbon dioxide from the process can then be captured in pumped into abandoned oil fields in the Gulf of Mexico, where it can be stored permanently.
It all sounds pretty straightforward, except there’s a competing technology that uses water to produce the same zero emission hydrogen fuel, eliminating the hassle of capturing carbon and storing it underground. The water based technology is more expensive now by a factor of two to three. But if projections prove right, the so called green hydrogen will soon be cheaper than making hydrogen from natural gas, posing a dilemma for oil and gas companies and their partners in Houston’s existing hydrogen industry as they seek to reduce emissions. According to Alex Klaessig, a research director at IHS Markit, they’re in a pinch, they need to make a decision about plunking down 300 400 Maybe $500 million for blue hydrogen, or they can try to buy incremental amounts of green hydrogen that are very expensive right now. And if you wait, what if the cost declines don’t materialize. Traditionally, hydrogen supplies have been made from natural gas to feed the production of it chemicals like ammonia and methanol.
But with the industry looking to shift into transportation as a cleaner alternative to petroleum based fuels, companies have been marketing so called Blue hydrogen, which is made from natural gas, but with the emissions captured and stored underground, the emissions free green hydrogen, which is made by running an electrical current through water technology used on NASA spaceships. For years now, oil executives and political leaders in Houston have studied how the city’s oil and gas infrastructure and expertise could be adopted to the Clean Energy Transition needed to address climate change. What they set upon as detailed in a recent report by the University of Houston was a combined hydrogen and carbon capture hub that would seek to clean up the region’s existing energy and petrochemical sectors, while also producing new low carbon hydrogen fuel. To start, the University of Houston study proposed a series of pilot projects focusing on the region’s existing hydrogen system, capturing the emissions from converting natural gas to hydrogen. Exxon Mobil even proposed the development of $100 billion carbon capture hub along the Houston Ship Channel with a carbon dioxide stored offshore under the sea floor.
The question of whether to invest in gas based hydrogen over that produce from water and powered by wind and solar farms has long posed a dilemma for the burgeoning hydrogen industry. But what seemed a far off question has become much more immediate in a report from Bloomberg New Energy Finance Nef last year, predicted green hydrogen would be cheaper than blue hydrogen by 2030. And in many markets even cheaper than standard hydrogen production without carbon capture. The report stated this will unleash a tectonic shift in the hydrogen market blue hydrogen products with expected start dates closer to 2030, such as Equinor’s H2Morrow plant in Germany at risk of becoming uncompetitive against green hydrogen. That forecast could prove overly optimistic. But most analysts project two technologies will converge on the price at some point in the 2030s.
This according again to Klaessig the report is getting the attention of Democrats in Congress, many of whom have long question supporting a hydrogen industry that relies on hydrocarbon production. Under the bipartisan infrastructure bill passed last year, Congress appropriated $8 billion for quote, clean hydrogen research and development, which includes both blue and green hydrogen technologies. At a hearing before the Senate Energy and Natural Resources Committee last month, Senator Martin Heinrich Democrat out of New Mexico questioned whether the federal government should support blue hydrogen production and the costly carbon capture systems it requires. He said, If you do a big expensive project with carbon capture, you need 20 to 30 years to make it back. How do we avoid making long term investments that end up not being cost effective, and hydrogen companies such as the French firm Air Liquide, which has its US headquarters in Houston, maintained that natural gas based hydrogen with carbon capture is critical to expanding the industry and to transportation fuel.
Once green hydrogen is cost effective, there will be plenty of demand for both technologies. These companies argue, and they have agreement for many environmentalists who want to see heavy industry trucks and cargo ships begin to switch off from petroleum based fuels immediately, not eight years from now, in a quote from Jonathan Lewis, Senior Counsel at the environmental group, Clean Air Task Force, we need a lot of clean hydrogen quickly, and we need it cost competitive, making it from any one energy source is going to make that very difficult. Oil companies are betting on the premise that there is room for both technologies. Exxon Mobil, for instance, signed a deal with a British natural gas from SGN and Australia’s Macquarie Group in December to study the development of a hydrogen and carbon capture facility in southern England. BP is exploring hydrogen projects across Europe and the Middle East, including a facility in northern England that will produce hydrogen from both water and natural gas. And a quote from Louise Jacobsen Plutt, the BP Senior Vice President of hydrogen and CCUS we believe both have a role to play in decarbonisation. It is not one versus the other. It’s about picking the best solution for the area that can over time scale at the lowest possible cost. Green hydrogen technology, meanwhile, is gaining ground fast.
In Los Angeles city officials working with partners such as Mitsubishi, are looking to convert four natural gas fired power plants to run on green hydrogen, for driving down the price to make it affordable for heavy industry and transportation. The hope is to eventually turn Southern California into the world’s first green hydrogen hub, a potential rival to Houston as it seeks to develop its own hydrogen industry. In a quote from Janice Lin, president of the California based trade group green hydrogen coalition. It makes sense right now to have a strategy to rapidly decarbonize existing hydrogen with carbon capture, but at the same time, we don’t want stranded assets. We do believe the future is all Green. Okay, so really, in my opinion, this is a beautifully written article on the balance between blue and green hydrogen.
There really are both pluses and drawbacks to both technologies, as well as severe geographic limitations, again to both technologies. But there are two key points that I think need to be addressed that this article doesn’t talk about. The first being that there are other technologies outside of blue and green that can and should be harnessed in a hydrogen ecosystem. The first being methane pyrolysis, or turquoise hydrogen. The technology has absolutely monstrous upsides with its production of not just hydrogen, but also carbon black. The other option being a waste to hydrogen model, where you can take solid landfill waste, and convert that to hydrogen. Both options have extreme upsides, both in the development of hydrogen and also the environmental implications. The other factor that’s not taken into this consideration is the cost of natural gas, which along with crude oil has seen a massive spike in recent days, which makes it extremely difficult to project cost fluctuations in your feed stock price.
Alright, that’s it for me, everyone. If you have any questions, comments or concerns about today’s episode, come and visit me at www.thehydrogenpodcast.com, or you can always email me at email@example.com. I would really love to hear from you. And as always, take care. Stay safe. I’ll talk to you later.
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