White hydrogen has amongst the lowest cost and carbon intensity of all hydrogen sources
\nIt can deliver immediate decarbonisation goals by supplying existing sectors such as fertilisers, plastics, cement and steel
\nThe \u201clow-hanging fruit\u201d is ammonia and fertilisers
\nHyTerra is poised to start drilling in Q3 2024 at its Nemaha Ridge hydrogen and helium project in Kansas<\/p>\n
The road to net zero emissions requires a multi-pronged approach \u2013 using renewables, hydrogen, and increased efficiency \u2013 to make a near-term impact as you can\u2019t electrify everything.<\/p>\n
In order to achieve this, we might be best served addressing the low-hanging fruit, that is to say industries and sectors that can be quickly decarbonised by swapping out say a feedstock manufactured using a process with high carbon intensity with the same feedstock made using a low or zero carbon process.<\/p>\n
The use of hydrogen is one such area that presents great potential for decarbonising the low-hanging fruit.<\/p>\n
While many people aren\u2019t familiar with hydrogen as it is not a traded commodity like gold and silver, it is nonetheless interwoven into our daily lives in many ways.<\/p>\n
Notable examples of sectors and products that use hydrogen include fertilisers and refining, with the first being the very definition of a low-hanging fruit with the potential for massive impacts.<\/p>\n
That these are often the same industries that can\u2019t be electrified easily just adds to the process of decarbonising them.<\/p>\n
Ammonia fertiliser for one requires significant amounts of hydrogen, which at this point comes largely from fossil fuels.<\/p>\n
Replacing this fossil fuel-derived hydrogen with hydrogen produced using cleaner methods will make an immediate difference to our emissions, particularly since fertiliser production is only projected to keep growing as the world\u2019s population grows.<\/p>\n
While most people in the know will point towards the use of green hydrogen<\/strong><\/a> \u2013 ie using electrolysers powered by renewable energy to crack water into oxygen and hydrogen \u2013 as being the obvious choice to do so, HyTerra (ASX:HYT)<\/strong><\/a> executive director Benjamin Mee believes the answer can be found under our feet. While he doesn\u2019t necessarily disagree that green hydrogen can clean up ammonia (or other industries that use hydrogen), Mee thinks that white hydrogen<\/strong><\/a> (also known as gold or natural hydrogen) found in reservoirs similar to those that host oil and gas represents a low-cost option that also wins the emissions sweepstakes.<\/p>\n \u201cWhite hydrogen is basically hydrogen made naturally by the earth and as a result there is an immediate advantage from a cost and carbon perspective that could be central to the future of the hydrogen industry,\u201d he told Stockhead.<\/p>\n \u201cAt the front end you have very low cost, maybe the lowest cost, potential in the hydrogen business.<\/p>\n \u201cSecond, it has a very low carbon intensity because you didn\u2019t spend all that effort to mine materials needed to manufacture solar panels, wind turbines, electrolysers and all the bits and pieces needed to produce green hydrogen.<\/p>\n \u201cSo, white hydrogen should be able to compete against grey hydrogen, which is fossil fuels based, in terms of cost and would beat them hands down in terms of carbon. Competes against green hydrogen by at very least matching carbon emissions but at a lot lower cost.\u201d<\/p>\n The low expected cost of producing white hydrogen is a significant point with Mee noting that the lowest cost producer always wins in the short term.<\/p>\n In the long-term, he expects customers to factor in life cycle carbon emissions when considering the different methods of hydrogen production.<\/p>\n Mee pointed out that the oil and gas industry is very good at calculating carbon emissions and this rigour will be applied to all forms of hydrogen.<\/p>\n \u201cToday we look at colours like white, grey, yellow, blue, green etc. These colours help us identify how hydrogen is made,\u201d he said.<\/p>\n \u201cIn the near future, I believe the discussion will shift more to what is the life cycle intensity of what we trying to achieve.\u201d<\/p>\n \u201cThat\u2019s where the attributes of white hydrogen will support the cause.\u201d<\/p>\n And while it is an emerging source of energy, white hydrogen also benefits from being able to apply existing skillsets and technologies from mining, oil and gas, and managing water to the extraction of hydrogen.<\/p>\n Mee pointed out that drilling for hydrogen, which is essentially a brand new energy source that no one really understands yet, has similarities to drilling for geothermal energy. Both use methods from the optimised oil and gas industry. It is not all sunshine and rainbows though.<\/p>\n As one would expect from trying to develop a new energy source, there are challenges involved in bringing white hydrogen to the market.<\/p>\n Mee notes that the first is there is no one recipe for finding and extracting hydrogen.<\/p>\n \u201cCompanies are actually developing that recipe now because it is so new,\u201d he said.<\/p>\n Further complicating this challenge is that companies can be expected to keep that recipe, which is essentially their intellectual property, pretty close to their chests. This means that there would not be much data sharing between companies in the coming years.<\/p>\n \u201cThe second challenge is explaining it, the education of what it can be to the market and helping to create that demand and resilience to any hydrogen economy that pops up around the world,\u201d Mee added.<\/p>\n \u201cThird is the legislation that still needs to be in place. That\u2019s evolving as we see now in Western Australia, as an example.\u201d<\/p>\n He noted that some countries \u2013 such as the US where HyTerra is operating \u2013 are already well advanced in this area, noting that it was a great jurisdiction with all the incentivised regulation ready to. HyTerra is a global early mover. Central to HYT\u2019s efforts to prove its own recipe to be a frontrunner in the white hydrogen space is its 100%-owned Nemaha Ridge project in Kansas, which sits between Kansas City and Wichita in the centre of a major industrial and manufacturing hub.<\/p>\n The project currently has 12,720 acres of exploration leases with good proximity to existing railways, roads, and pipelines that connect it to a long list of potential offtakers nearby including ethanol and ammonia manufacturers, and petrochemical plants.<\/p>\n There\u2019s also significant evidence that hydrogen is indeed present with the company\u2019s acreage hosting historical wells with hydrogen and helium occurrences in the region, some returning up to 92% hydrogen and 3% helium.<\/p>\n The Nemaha Ridge project. Pic: HyTerra<\/p>\n Mee said the company had went in and looked at the wells along with the thousands of wells across the US.<\/p>\n \u201cWe liked the jurisdiction, proximity to industry, and we liked the rocks,\u201d he noted.<\/p>\n \u201cWe then came up with the geological model that could explain why those occurrences are there and we leased those occurrences.\u201d<\/p>\n Taken together, Nemaha Ridge has all the basics required for project resilience.<\/p>\n \u201cYou want to have proximity to customer, you want to have low-cost extraction and you want to have good rocks and good play diversity,\u201d Mee said.<\/p>\n \u201cYou have got to have a lot of things to try. More shots on goal from the start.\u201d<\/p>\n HYT has already tagged Nemaha Ridge with a best estimate prospective resource of 100.2 billion cubic feet of hydrogen and 0.47Bcf of helium and plans to continue leasing more acreage to build its position.<\/p>\n It recently raised $6.1m through a placement and fully underwritten rights issue, placing it in the position to drill in Q3 2024.<\/p>\n Mee notes that Kansas has rigs available and has an existing services industry, ensuring that oil and gas service providers can be hired as required.<\/p>\n \u201cThe trick now is to go find the hydrogen and understand it, drill it out, and replicate that globally and we are looking at different opportunities around the world,\u201d he added.<\/p>\n HYT will first drill some exploration wells, decide on appraisal wells and flow testing before making a decision on commerciality and building a pilot plant to demonstrate early commerciality.<\/p>\n \u201cWhile we do that, we still need to explore, keep building and leasing to build scale in our priorty areas,\u201d Mee added.<\/p>\n \u201cTo do that, we have to start derisking and handling subsurface uncertainty and that\u2019s what we are good at. You can only do that through geophysical surveys, geological surveys, and drilling.\u201d<\/p>\n He added that while there are plenty of potential hydrogen opportunities in the US, the company was also looking globally as there are different geological models to unlock.<\/p>\n \u201cIt is going to be quite interesting to see what we do next.\u201d<\/p>\n \u00a0<\/p>\n\n At Stockhead we tell it like it is. While Hyterra is a Stockhead advertiser, it did not sponsor this article.<\/em> The post HyTerra backs white hydrogen to pick the low-hanging decarbonisation fruits<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n\u00a0<\/p>\nThe case for white hydrogen<\/h2>\n
\n\u00a0<\/p>\nChallenges ahead<\/h2>\n
\n\u00a0<\/p>\nNemaha Ridge poised to go<\/h2>\n
\n<\/span><\/p>\n