Why is it taking such an age for Blue Hydrogen projects to get off the ground?
When you think about it, it is the obvious next step. We are going through an Energy Transition not an Energy Step Change. This means an incremental movement towards our common goal not a total ground shift overnight. We need a bridging technology and blue hydrogen ticks every box.
Global corporations with vast hydrocarbon reserves are being driven by legislation and shareholder opinion to decarbonise at an eye-watering rate. This will take money, lots of it. So, what would be the ideal way of generating the funds to mobilise this transition?
Surely a preferential route would be to utilise the vast gas resources in your portfolio at a gas price that is the highest since 2018. On top of that let us make sure to utilise our current midstream infrastructure and at the same time fill in a few depleted wells with CO2 and become part of the blue hydrogen economy. Win-Win.
Or so you would think…
So where are all the Blue Hydrogen projects? They should be popping up all over the place given the backdrop of incentives. But they are not. In fact only 9% of announced Hydrogen projects globally are Blue in colour. Why is that? One theory is that perhaps true CCS, that really works, is simply too costly. In fact, how many active projects are even out there?
Maybe we need to face the fact that Blue is simply not the right shade of Green and activist shareholders don’t want to hear about it. Once they understand that Blue Hydrogen is sourced from natural gas who cares if it captures over 90% of emitted carbon.
Or it could just be that the IOC’s are simply thinking longer term. It will be at least 10 or 15 years before there is enough renewable energy in Europe to fully drive the Green Hydrogen economy so why not just wait until then? At that point the technology would surely have improved enough to make production somewhat economic. Then over to the acquisitions team.
Hence for the time being we will all need to wait. Blue is not the colour that matters in a Green Energy world. Could it be that you are concerned about counting the overall carbon cost in using renewable power sources to generate Green Hydrogen? It seems prudent to be so but alas, that’s another story entirely.
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.