 |
Louisiana Light • 4 days | 82.07 | +2.45 | +3.08% | ||
|
Bonny Light • 150 days | 78.62 | -2.30 | -2.84% | ||
|
Opec Basket • 4 days | 81.72 | +3.78 | +4.85% | ||
|
Mars US • 441 days | 73.93 | -1.23 | -1.64% | ||
|
Gasoline • 12 mins | 2.126 | +0.002 | +0.11% |
|
Bonny Light • 150 days | 78.62 | -2.30 | -2.84% | ||
|
Girassol • 150 days | 79.56 | -1.80 | -2.21% | ||
|
Opec Basket • 4 days | 81.72 | +3.78 | +4.85% |
|
Peace Sour • 4 hours | 71.55 | -0.86 | -1.19% | ||
|
Light Sour Blend • 4 hours | 72.25 | -0.86 | -1.18% | ||
|
Syncrude Sweet Premium • 4 hours | 75.35 | -0.86 | -1.13% | ||
|
Central Alberta • 4 hours | 72.05 | -0.86 | -1.18% |
|
Eagle Ford • 4 days | 75.30 | +2.25 | +3.08% | ||
|
Oklahoma Sweet • 4 days | 75.50 | +2.50 | +3.42% | ||
|
Kansas Common • 4 days | 65.65 | +2.25 | +3.55% | ||
|
Buena Vista • 1 min | 78.64 | +0.73 | +0.94% |
China's dominance in clean energy…
Germany's solar industry is experiencing…
The upcoming Trump presidency is…
As the world pays more and more attention to reducing emissions and mitigating climate change, analysts believe that the most abundant element in the universe—hydrogen—has the potential to become a mainstream energy technology and a key clean fuel source in the future that could help reduce greenhouse gas emissions.
In some industries, including oil refining, ammonia production, and methanol production, hydrogen is already widely used.
But if hydrogen were to support the world’s energy transition and help tackle greenhouse gas emissions, it would need dozens of billions of US dollars of investment every year to overcome the barriers it faces now. These are the challenges for building the necessary infrastructure to create a true global hydrogen economy, to producing hydrogen cost-effectively from renewable sources and with zero emissions.
In a nutshell, hydrogen has great potential but it needs to tackle the scale and source challenges to become the really green fuel of the future, S&P Global Platts’ Jeffrey McDonald and Andrew Moore write.
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The world’s hydrogen demand has more than tripled since 1975, the International Energy Agency (IEA) has estimated. But nearly all of the hydrogen is made from fossil fuels, predominantly natural gas, and hydrogen production emits CO2 every year equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.
That’s why scientists call this type of hydrogen produced from fossil fuels ‘grey’ hydrogen; its production is not zero emission.
Globally, natural gas is now the main source of hydrogen production—it accounts for three quarters of the world’s annual hydrogen production, according to the IEA.
In the U.S.—which produces nearly one-seventh of the global supply—95 percent of the hydrogen is currently produced from natural gas. That’s not only because natural gas is abundant in the U.S.—hydrogen production from natural gas is currently a lot cheaper than from electrolysis.
The so-called ‘green hydrogen’ produced from renewable energy sources via electrolysis has been a promising concept, but scaling up the zero-emission hydrogen production has been a challenge.
According to the IEA, “larger electrolyser projects are needed to demonstrate accelerated scale-up.”
Production of hydrogen from low-carbon sources is costly right now, while the development of hydrogen infrastructure, such as refueling stations for fuel cell cars, is slow and hampers widespread adoption, the IEA said in its ‘The Future of Hydrogen’ report this year.
Moreover, the challenge to replacing fossil fuels with zero-emission sources for hydrogen production also looks significant right now.
To overcome all these barriers, the world will need a lot of investment and a lot of coordination and cooperation between governments and industries across borders and continents.
According to the Hydrogen Council, a global CEO-level advisory body, achieving scale in the hydrogen economy will require investments of between US$20 billion and US$25 billion annually for a total of US$280 billion until 2030.
With long-term, stable-coordination, and incentive policies, “attracting these investments to scale the technology is feasible,” says the council, whose members include oil majors such as BP, Equinor, Shell, and Total, and carmakers including GM, Honda, Hyundai, and Toyota. Related: The Best And Worst Oil Predictions Of 2019
Several major oil firms—such as Equinor, Shell, and Total—have included hydrogen and related research and applications in their alternative energy portfolios, but a meaningful large-scale hydrogen use with low or zero emissions in heavy industries—where emissions are the most and the hardest to cut—is years, if not decades, away.
BP says that ‘blue’ hydrogen, produced from natural gas with carbon capture and storage (CCS), is currently the lowest-cost source of low carbon hydrogen at scale and believes that this technology could be the key driver to the widespread use of hydrogen.
“‘Green’ hydrogen, produced using renewable energy with water electrolysis, will play an increasingly important role, particularly in parts of the world with high renewable energy potential. We recognize the need to demonstrate and scale both these technologies and are actively looking at opportunities,” BP’s group head of technology David Eyton says.
The development of hydrogen research and technology in the next few decades could make hydrogen a multi-billion industry in the United States alone, according to climate policy think tank Energy Innovation.
By 2050, the hydrogen industry in the U.S. could generate as much as US$170 billion in annual revenues and make combined profits of more than US$100 billion, if hydrogen demand as a vehicle fuel results in 5 percent hydrogen-powered vehicles on the road in 2050, and if hydrogen is made entirely from electrolysis.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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There are currently two ways of producing hydrogen: one from natural gas and the other by electrolysis from renewable sources.
Producing hydrogen from natural gas is costly. Production of scales also produces CO2 emissions estimated by some accounts as equivalent to those of the United Kingdom and Indonesia combined per year. If this is the case, then it is more cost-effective to use natural gas as a direct energy sources rather than use it produce hydrogen.
The second method of production is by electrolysis from renewable energy sources. This is a more costly method than from natural gas. Moreover, it needs investments worth billions of dollars to build the necessary infrastructure to scale up the zero-emission hydrogen production.
Still, hydrogen is widely used in some industries, including oil refining, ammonia production, and methanol production.
Other potential use is hydrogen fuel cells (FCVs) as an alternative to internal combustion engines (ICEs) in global transport.
And even with the advances made in hydrogen technology over the past 20 years, there are still many challenges to be overcome before hydrogen FCVs can compete in the market with current motor technology.
However, the most significant challenge is the cost and durability of the fuel cell system.
Another challenge is that the numbers of FCVs sold and out on roads worldwide is quite small. Only 1,074 fuel cell vehicles were sold in the US during 2016. The numbers for Europe are even much smaller.
Experts estimate it will take 40 years or more before hydrogen has any meaningful impact on gasoline consumption or global warming.
Still, the vision of a hydrogen economy is currently being kept alive with Iceland already leading the way to become the world’s first fully-operational hydrogen economy. Icelanders even dream of exporting hydrogen and creating a booming new industry (though first they will have to figure out a way to get it there). Visions don’t come cheap. (For more information on Iceland’s hydrogen vision, please refer to my research paper titled: ”How Viable is the Hydrogen Economy: The Case of Iceland” which I gave at the 28th USAEE/IAEE North American Energy Conference in December 3-5, 2008 in New Orleans, Louisiana, USA).
The vision of a hydrogen economy in Iceland as spelled out by Professor Bragi Arnason, nicknamed ‘Professor Hydrogen’ by the Newsweek Magazine, is to take all of Iceland’s cars and fishing trawlers and gradually replace their gas combustion engines with electric motors run on FCVs. Meanwhile, harness Iceland’s abundant geothermal and hydro-energy resources to begin producing hydrogen gas on a mass scale.
Iceland is a model in the making. With a population of only 290,000 people and with its abundant hydro-energy and its huge geothermal energy, Iceland has already started the transformation into a hydrogen economy. For a number of years, public transport buses in Reykjavik, the capital, have already been running on FCVs. The next step is the introduction of FCVs for private transport. Eventually the entire Icelandic fishing fleet will be gradually powered by FCVs. The question is when and at what cost.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London