Hydrogen News

Oil, Natural Gas Majors Say Hydrogen May Lie at Heart of Energy Future

By February 12, 2021February 22nd, 2021No Comments

So-called green hydrogen, still in its infancy, is the key for energy companies navigating what many in the industry believe is an inevitable transition from fossil fuels to renewables over the next three decades. Although the potential for hydrogen has loomed for decades, it has yet to be realized in large measure because of the relatively high costs. As such, necessary infrastructure is not currently in place to either produce or consume hydrogen at a scale needed to make an impact, said NGI’s Patrick Rau, director of strategy and research.

Gas pipelines are likely to be the most economical way to transport the fuel, but hydrogen tends to be highly corrosive on steel.  Accordingly, Rau said, “Shipping it in existing infrastructure is a problem that must be worked out.” Nevertheless, greater GHG regulation and government subsidies to galvanize a shift away from fossil fuels, coupled with mounting pressure from influential investors such as BlackRock Inc. and Vanguard Asset Management to slash emissions, provide unprecedented motivation. Rapidly advancing technology may also make hydrogen more feasible in coming years.

While hydrogen currently accounts for almost nothing today, McKinsey & Co. estimated it could drive 14% of U.S. power by 2050 – also the carbon-neutral target year set by the Paris Agreement. BTU Analytics’ Matthew Hoza, manager of energy analysis, states: “This creates opportunities for pipelines to help transport a carbon-free fuel and help off-takers meet climate and emissions goals. There are certainly obstacles,” but “power plants and industrial users will increasingly look for ways to reduce emissions to meet state, local, or self-imposed mandates.”

Resistant until recent years, a number of major energy companies braced for change are beginning to promise major shifts to renewables and, increasingly, they are citing hydrogen as a key piece of the pie. ExxonMobil CEO Darren Woods and other CEOs of U.S.-based energy companies have said they hear investors’ mounting demands but also see as probable more support from governments domestically and abroad.

European energy giants echo that sentiment.

France’s Total SE, for one, views hydrogen as increasingly critical. “We need support from governments in order to move forward, but there is a lot of enthusiasm in Europe from European governments to develop this hydrogen economy,” said CEO Patrick Pouyanné during the quarterly earnings call. “The writing is on the wall,” Pouyanné added. “Clean, low-carbon energy is the future.”

Hydrogen “is definitely a gas fuel of the future,” BP plc CEO Bernard Looney said. “There’s no question about that.”

Continue to the full article… (subscription required)