At a glance
“Natural (geologic) hydrogen and its potential role in a net-zero carbon future: Is all that glitters gold?”, Oxford Institute for Energy Studies (OIES), Sept. 16, 2024.
This paper critically assesses the potential of naturally occurring hydrogen, also known as white, gold or geologic hydrogen, as a low-cost and low-carbon alternative to conventional hydrogen production. It explores various forms and sources of geologic hydrogen, questioning whether they can be scaled up commercially to make a significant impact on global energy systems.
Recent developments, such as the production of high-purity hydrogen from a well in Mali, show that natural hydrogen can be extracted and used at competitive costs. But substantial obstacles persist, including uncertainties about the geology of potential reservoirs, the economic impacts of exploration and whether existing infrastruture is ready to handle it. While natural hydrogen offers potential advantages over renewable hydrogen, such as better stability and storage, the paper calls for more rigorous geological surveys, pilot studies, and policy support to determine its role in a net-zero carbon future.
Topics
Key insights
- Viable hydrogen sources: Only free gas in geological formations is considered economically viable for extraction using current oil and gas technologies.
- Potential for cost-competitiveness: Large-scale native hydrogen production could achieve a levelized cost of less than $1 USD/kg if substantial reserves are discovered and developed.
- Scalability constraints: Most naturally occurring hydrogen is in deep, offshore, or small accumulations, limiting economic production potential.
- Factors impacting production: The economic viability of hydrogen projects depends on factors like well pressure, production rates, land costs, and proximity to markets.
- Economic impact of scaling production: Increasing production rates to 60 times that of Mali could make natural hydrogen cost-competitive with fossil fuel-based hydrogen.
Take a look
Reported occurrences of natural hydrogen in the world
Source: Natural Hydrogen Ventures; adapted from Zgonnik (2020)
Big picture
Hydrogen is increasingly seen as a player in the global energy transition, although it is often produced by using fossil fuels. Green hydrogen, made via electrolysis with renewable power, offers a cleaner, but costlier, option. Since geologic hydrogen forms naturally when underground water reacts with iron under high heat and pressure, there has been growing interest in its potential as a cheaper low-carbon alternative.
Earlier this month, Kathari News reported that Canada’s federal Department of Natural Resources has been monitoring recent industry moves to begin exploring for geologic hydrogen. An internal memo released through the Access to Information Act showed the government also thinks more research is needed to determine the technical and economic feasibility of natural hydrogen — as well as the impacts on climate.
The OIES paper arrives similar conclusions. If scalable and economically viable, natural hydrogen could supplement existing hydrogen production methods by providing a more cost-effective and stable source. However, significant uncertainties in geological, technical, and economic aspects need to be resolved.
This discussion is crucial for policymakers and energy stakeholders seeking diverse paths to cut carbon emissions. The possibility of repurposing existing oil and gas infrastructure for hydrogen production offers practical advantages in regions with established hydrocarbon industries. However, there are still major knowledge gaps around the presence, concentration, and recoverability of natural hydrogen, as well as the readiness of existing technologies for large-scale production.
Challenges and opportunities
Key challenges to the commercialization of naturally occurring hydrogen include:
- Geological uncertainties about the presence, concentration, and economic recoverability of hydrogen deposits;
- High exploration and production costs driven by nascent technological developments and limited existing data;
- Lack of infrastructure specifically tailored for hydrogen extraction, storage, and transportation;
- Low production rates demonstrated by early wells like those in Mali, which pose scalability issues;
- Inadequate regulatory frameworks and incentives to support exploration and development of natural hydrogen resources.
To address these challenges, the paper suggests:
- Conducting targeted geological surveys and exploration to better map potential hydrogen reserves;
- Advancing and piloting new technologies for efficient hydrogen extraction and storage;
- Utilizing existing oil and gas infrastructure where feasible to reduce initial costs;
- Expanding policy support, including tailored regulations and financial incentives for natural hydrogen projects;
- Encouraging international partnerships to share data, reduce risks, and maximize investment.
In their own words
While the prospect of harnessing naturally occurring hydrogen could, in principle, revolutionize the energy landscape, the realities of geological limitations and the need for further research cannot be overlooked. As the energy sector continues to explore diverse pathways for decarbonisation, it is imperative to approach the development of natural hydrogen with a balanced perspective, recognising both its promise and the inherent uncertainties that accompany it.
“Natural (geologic) hydrogen and its
potential role in a net-zero carbon future:
Is all that glitters gold?,” By Aliaksei Patonia, Martin Lambert, Ning Lin & Mark Shuster, Oxford Institute for Energy Studies, Sept. 16, 2024.
Final thoughts
The findings stress the need for ongoing exploration, technological development and investment to evaluate whether natural hydrogen can be a scalable, economically viable solution. Since this will require careful co-ordination and supportive policies, the paper could have further explored ideas such as incentives, safety standards and international co-operation, where sharing data could optimize investments and manage risks. A more detailed examination of the long-term environmental impacts of large-scale hydrogen extraction would add depth to the discussion.
— By Qurat ul ain Siddiqui
Download the full report originally published by the Oxford Institute for Energy Studies on Sept. 16, 2024.
