Clean burning hydrogen fuel is finally coming into its own, and it could shape the future of U.S. energy.
In November 2019, the United States not only became fully energy independent but a net exporter. What a pyrrhic victory, that independence. In September, more than a million people flooded city streets across the globe to demand action on climate change. The most direct action was, and remains, extinguishing the fires that burn over oil and gas drilling sites, everywhere.
Now, given its determined focus on climate change and the danger of fossil fuels, the Biden administration is faced with a conundrum: how to keep the economic and security benefits of American energy independence while drastically lowering carbon emissions — not in a half century, but in a little more than a decade.
The fossil fuel contradiction
The extreme weather crisis that has mauled the Texas power grid offers a stark example of the hurdles the U.S. now faces. Texas oil was already losing value and credibility before the February deep freeze. More broadly, the U.S. oil and gas industry currently accounts for at least 10 million jobs, 8% of GDP, and 6% of total employment. Average annual pay in the oil patch — or the fracking patch — is around $102,000, well above the median household income. Erasing that? Not possible.
At the same time, Climate Joe has a powerful opportunity to engage American oil and gas companies in an emergency dialogue over how to change practices and make the big transition from black emissions to grey emissions. There are ways to phase out fossil fuel emissions without laying off millions or threatening U.S. energy security.
In short, committing to a hydrogen economy would serve both ends.
The proven technology
No doubt, hydrogen is controversial. In this case, we’re talking about “brown,” or “grey” hydrogen, produced during the processing, or “reforming” of natural gas in large scale oil refineries and fertilizer manufacturing. According to the U.S. Office of Energy Efficiency and Renewable Energy, 95% of the hydrogen in America is currently made this way, using steam-methane technology, which produces hydrogen from a methane source (eg. natural gas). Methane reacts with steam under pressure in the presence of a catalyst to produce hydrogen. Currently, the world’s largest producer of hydrogen is American industrial conglomerate Air Products, which boasts a largely U.S.-based supply chain.
While steam methane reforming offers a lower emissions pathway, it is not a zero-emission technology. That said, there is considerable research directed at combining carbon capture technology with steam methane reforming units. When it’s done right, the process brings net-zero emissions.
Brown hydrogen vs. green hydrogen
Green hydrogen — which must be made from a proper renewable energy source, is an ideal fuel. When consumed in a fuel cell, it produces only water, electricity and heat. Hydrogen and fuel cells have potential widespread applications including distributed or combined heat and power, backup power, systems for storing and enabling renewable energy, portable power, auxiliary power for trucks, aircraft, rail, ships, specialty vehicles such as forklifts, and passenger and freight vehicles including cars, trucks, and buses. Below is a snapshot from the United States Energy Information Administration estimating hydrogen and fuel cells emission reduction potential:
- Light duty highway Vehicles: Between 50% and more than 90% reduction in emissions over today’s gasoline vehicles.
- Specialty vehicles: More than 35% reduction in emissions over current diesel and battery-powered lift trucks.
- Transit buses: Demonstrated fuel economies of approximately 1.5 times greater than diesel internal combustion engine (ICE) buses and approximately 2 times higher than natural gas ICE buses.
- Auxiliary power units (APUs): More than 60% reduction in emissions compared to truck engine idling.
- Combined heat and power (CHP) systems: 35% to more than 50% reduction in emissions over conventional heat and power sources.
Time to repurpose oil and gas pipelines for hydrogen
For decades, the hydrogen value chain has been constrained by infrastructure challenges. Unlike other alternative energy technologies, the hydrogen economy does not have greenfield infrastructure needs nor requires the development of an entirely new domestic supply chain. The hydrogen economy, just like the oil and gas sector value chain, operates in three segments: upstream, midstream and downstream.
Jason Kontomitras, CEO at Hydroco, says that “the transition towards low emission fuels, like hydrogen, would be a daunting task without the use of existing infrastructure developed for oil and gas. The United States will be able to maintain a strong energy workforce with hydrogen; however, the United States must utilize the capabilities of the oil and gas industry during the energy transition to ensure the continuance of the United States’ energy independence and position as a trailblazer in the energy sector.”
Unlike other alternative energy technologies, the United States has a fully built out domestic supply chain that can be engaged to support the development of the hydrogen economy. One measure that would help: collaboration between the government and the oil and gas industry in redrawing the lines of existing energy infrastructure. In doing this, they should utilize the existing oil and gas workforce.
Reinventing U.S. shale
Such a course could not be more timely for the oil and gas industry. The proliferation of cheap shale gas flooding domestic markets over the last decade has led to the current down cycle in commodity prices. To make matters worse, COVID-19 has served to bolster this depression in demand and has led to a prolonged period of oversupply. The result is over 40 producers with $51 billion in debt entering bankruptcy protection over the course of 2020. Early estimates place the total number of oil and gas jobs lost at over 107,000. This displacement of the traditional energy workforce presents a unique opportunity for the expedition of a hydrogen economy.
“Though different technologies, many of the competencies required for successful implementation of hydrogen-specific infrastructure mirror those required in oil and gas,” explains Stephen Brooks, director of engineering at Lone Cypress Energy Services. “The hydrogen supply chain is governed by the same technical and logistical challenges faced by the midstream oil and gas industry.”
From a technical perspective, the required mechanical-, chemical- and construction-specific engineering rely upon the same industry standards and practices. Transportation logistics are also similar, as hydrogen is either trucked or pipelined from the point of generation to the point of consumption much like natural gas or crude oil. This presents an opportunity for thousands of engineers, petroleum landmen and pipeline construction workers to enter an emerging industry as the traditional energy landscape undergoes this drastic transformation. Unlike other renewable technologies, such as solar and wind, hydrogen infrastructure offers a direct translation of existing skill sets.