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We’re blue over the demise of green hydrogenDear Gold Hydrogen supporter,
If money talks, we heard it loud and clear last week as the drive for man-made green hydrogen took a significant hit.
Gold Hydrogen’s premise is markedly different to that in the news headlines – natural hydrogen that exists in the ground as opposed to hydrogen made from solar and wind.
The world is transitioning both politically and environmentally to meet net zero targets and there is widespread adoption and testing to introduce hydrogen into the energy mix. So we don’t like seeing any bad news about an energy source that the world desperately needs in abundance.
However, it’s fair to say the economics around man-made (green) hydrogen were always going to be challenging.
Our best estimates had our natural hydrogen, simply pumped out of the ground as we are attempting to do at our South Australian tenement, coming in at under 20 per cent of the cost of green hydrogen.
Based on current production techniques and what we are seeing from the world’s first natural hydrogen producer – a village in Mali is being powered by hydrogen taken out of the ground – we are steadfast in our belief that our gas can be commercialized for about $1 a kg.
Any literature we’ve been able to find about man-made green hydrogen had the price point starting at $6 a kg – and that was before electricity prices began soaring (a lot of electricity is used in the green hydrogen manufacturing process). The attached graph, which we have been showing at presentations for more than a year, puts the cost problem in stark relief.
It was therefore little surprise that the key proponents of green hydrogen in this part of the world were likely to be in a bind.
The announcement last week, that 700 jobs will go as Fortescue puts plans to be a world-leader in green hydrogen manufacture on the back burner, is a blow to anyone concerned about carbon emissions.
It makes the natural hydrogen play even more important to the discussion around our energy mix.
Remember, hydrogen has zero emissions. Natural hydrogen is no longer a theory – it is already being used to power at least one town.
We have proven it exists in South Australia, and there are now more than 40 companies worldwide looking to commercially produce it, with finds confirmed in Europe and South America. US company Koloma, backed by Bill Gates, has pulled in hundreds of millions of dollars in venture funding to advance natural hydrogen exploration.
So how significant is what we are trying to do?
London’s Financial Times recently quoted Geoffrey Ellis, one of the leading US research geologists, who has modelled worldwide reserves of geological (natural) hydrogen. He has produced a median estimate of about 5 trillion tonnes in the ground.
“How much of it can be extracted is not fully understood. However, just 2 per cent of his median estimate would meet the IEA’s demand estimate for a couple of hundred years,” the story says of Ellis’ findings.
Let’s say that again. Extracting just 2 per cent of the existing gas would meet our hydrogen needs – and impact the push for net zero emissions – for 200 years.
This is why, despite last week’s bad news for green hydrogen, we continue to be buoyant about our prospects.
Our understanding continues to grow and we also have new seismic testing being undertaken, which should identify the best spots across a large regional setting for us to drill in our 7000sq m tenement. Remember, where we are now are the sites that accidentally struck hydrogen when drilling for oil 100 years ago.
The world needs reliable, affordable and preferably clean energy and we’ve long said that gold hydrogen could set the gold standard in green energy. Nothing’s changed.In other news:If you want an expert view on the state of the worldwide energy market, we recommend watching this piece from Eric Toone of Breakthrough Energy.Interesting also to see that Doomberg is becoming more accepting of natural hydrogen as the evidence builds.
All the best,Neil McDonaldManaging Director, Gold Hydrogen |
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