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Gold hydrogen: fool’s gold or El Dorado?

Gold hydrogen could play a crucial part in energy security, by providing an additional means of securing the zero-emission gas. But the question remains: will it scale?

There are new hopes that natural hydrogen could represent a new frontier for drillers. Gold hydrogen – sometimes known as white hydrogen – has seen a surge of interest with reports of large reserves in the US, and new attention in Australia and Europe.

Assessing natural hydrogen’s resource potential is still in the early stages. However, if large volumes are found to be recoverable, then prices could fall significantly, making use of the gas more commercially viable in many areas of the energy transition.

Lower prices could also cast doubt over the huge spending plans on blue and green hydrogen projects, as well as electrolyser manufacturing plants, and green hydrogen energy storage projects.

As the energy transition gathers pace, demand for clean hydrogen will soar. Existing low carbon production methods – blue and green – are currently unable to produce it cheaply enough to compete with fossil fuel alternatives.

While most focus has recently been on the US, the UK may also have large hydrogen reserves and production potential. The British Geological Survey (BGS) has hedged its bet. The agency said it “understood there could be great potential, but to date there is little published field data, but we are hoping to work on this as part of a next phase of research”.

Big numbers

According to reports in the FT and elsewhere, the US Geological Survey (USGS) has estimated in an unpublished report that there are as much as 5 trillion tonnes of natural hydrogen in the US continental crust. While much of this is unrecoverable, the USGS has speculated that this resource could meet hydrogen demand for years to come.

US incentives provide a supportive environment for hydrogen developments. For zero-carbon hydrogen, the Inflation Reduction Act provides a $3 per kg tax credit. Additional incentives are available for the use of hydrogen in power generation.

BGS said it has not studied the USGS data. It “is aware that there is commercial interest in several parts of the world”. While there was potential for hydrogen to be produced in naturally occurring geological processes, “each location needs to be studied on a case-by-case basis to understand whether the hydrogen has been trapped in the crust and is amenable to extraction”.

HyTerra, which is working on hydrogen plans in Nebraska and Kansas
HyTerra is working on hydrogen plans in Nebraska and Kansas

To date, the BGS has not conducted research on natural hydrogen in the UK beyond a review paper published in 2005. As part of its (unpublished) soil gas surveys, the BGS does monitor for hydrogen but it has not found high concentrations in the UK thus far.

However, BGS said, “there are places in the UK with what would appear to be suitable geological conditions where hydrogen could have potentially formed, and more research is needed to investigate these”. They added that it was possible that natural hydrogen had not been identified because “it has not been an exploration target in the past – and as a consequence, monitoring kit may not have been designed to identify hydrogen”.

Ultramafic targets

As far as source rocks, BGS said the main interest is in ultramafic rocks that have undergone a geological alteration process of serpentinization (hydrogen is a by-product in the process of formation of these rocks). Iron-rich rocks reacting with water can produce geologic hydrogen in large quantities. Catalysts can stimulate this process.

Research in this area is ongoing, including at the University of Texas at Austin. It is investigating a range of natural catalysts to produce hydrogen through the natural serpentinization process. The US has a $20 million subsidy programme for technologies to measure and produce natural hydrogen.

BGS said the first obvious UK targets would be areas where ultramafic rocks occur at depth and where the geological conditions occur to trap hydrogen. A key factor for developing natural hydrogen sources will be proximity to market. “Transport and storage are additional cost factors”, it said.

Given the negative impression of oil and gas companies in Europe, there may be advantages to pivoting to clean hydrogen production. There may also be scope for an argument around reducing tax on operations in order to fund hydrogen developments.

Microbes and sedimentary traps

BGS said there may also be a smaller potential for hydrogen accumulations related to other geological processes, including coal seam gas production.

“It is also useful to highlight that H2 is a good energy resource for microbes, at its natural production and slow upward migration likely powers many of the subsurface microbial communities, of which we know very little.”

In addition, as with oil and gas, sedimentary rocks can act as reservoirs for the hydrogen that emanates from other source rocks.

Some of these rocks are the same as those that act as reservoirs for oil and gas, so it is possible that oil and gas producers have records related to hydrogen emissions found during their search for hydrocarbons. However, if companies were not monitoring for hydrogen, they may well not have identified it.

Wood Mackenzie was unable to comment on the UK or European situation. OEUK said there were a number of investigations and studies being carried out in the area. It noted a link between Durham University and Helios Energy in Spain, where plans are more advanced.

Progress elsewhere

Until recently, most natural hydrogen discoveries have been made by accident by geologists on the hunt for fossil fuels. The only current use of natural hydrogen is in a village in Mali, West Africa. The village burns a small volume of hydrogen unseparated from other gases to generate electricity.

Now, there appears to be enough confidence in some parts of the world to support hydrogen exploration plans with the aim of commercial development.

Australia’s Gold Hydrogen reported in November that it had found high levels of hydrogen in a well in South Australia.

Denver-based Koloma has been searching the US Midwest, with some success. Recently, Koloma raised over $200mn in funding from backers, including Amazon’s climate fund. The company launched in 2015, when it won backing from Bill Gates’ Breakthrough Energy.

Gold Hydrogen in action

European driver

In Europe, a natural hydrogen seep has been found in a mine in Albania, emitting at least 200 tonnes per year – the highest flow reported anywhere in the world to date.

In northern Spain, Helios Energy – with help from Durham University – is seeking to develop natural hydrogen accumulations discovered by a well drilled for oil and gas in the southern Pyrenees in 1963. Helios says sub-surface data suggests there may be commercially recoverable quantities.

Last autumn, there was also a major discovery in the subsoil of eastern France, according to researchers at the University of Lorraine.

When looking for methane emanating from Carboniferous rock formations, they also found concentrations of hydrogen (thought to be 90% at 3000 metres), with total reserves estimated at 46mn tonnes.

Exploration is also ongoing in the French Pyrenees and Alps, and the researchers estimate French output could reach 3mn tonnes per year. This remains small, though, compared with the total grey global hydrogen production of about 96mn tonnes in 2023.

The bans on hydraulic fracking and oil and gas drilling in European countries like France and Spain do not apply to drilling for natural hydrogen. Any development in Europe, or the UK, would be unlikely to face the same public opposition as fracking has generated, due to its clean energy qualities and different production methods.

Mixed views

Despite the progress, developers remain some way from producing natural hydrogen commercially at scale.

Companies have not yet drilled wells to any significant depths to test the hypothesis. Industry has also not yet collected and purified hydrogen at scale. The gas is often found mixed with other gases such as methane.

Furthermore, companies will need to take particular care when extracting hydrogen, given the gas does contribute to climate change. Given the small size of hydrogen, the gas leaks from conventional gas pipes. Tackling this problem will push up costs. Any interaction with oxygen is also problematic.

David Cebon, director of the Centre for Sustainable Road Freight and Professor of Mechanical Engineering at University of Cambridge, said that while he wasn’t a geologist, based on the existing evidence, he didn’t believe there was much prospect for natural hydrogen.

Cebon said nobody had properly measured reserves anywhere in the world. Natural hydrogen, he said, “appears to be another case of over-hyping without proper evidence”.  

He noted that the Hydrogen Science Coalition had just released a report on the issue. This was generally negative on the chances of commercial exploitation, with any developments likely to be very small scale.

“[Natural hydrogen] remains an exceedingly early-stage and little-understood topic … Even if abundant, most geologic hydrogen won’t be accessible or easy to recover,” said the report. There are around 23mn tonnes of hydrogen seeping into the atmosphere each year already. Interested companies would struggle to capture these seeps, given the spread over a large area.

“Seeps furthermore lack pressure support, resulting in low flow rates unsuitable for commercial production.”

Industry interest

On the other hand, France’s earth science specialist, CGG, announced last week that it was planning a global natural hydrogen screening process to assess suitable source rocks and hydrogen distribution worldwide.

The company says it will use subsurface data and high-performance computing capabilities “to identify and high-grade ‘hot spots’ for natural hydrogen exploration”. It claims full industry support for the move.

The outlook may prove challenging, at least in the near term. With only one village in Mali currently running on natural hydrogen there are clear questions about the viability of scaling up.

However, the prize is tempting. Redeploying oil and gas skills to solve energy transition problems is a tantalising prize – that may yet find favour with investors and politicians.

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