Natural hydrogen, also known as white hydrogen, is extracted directly from the Earth’s subsurface layers without the need for complex and costly conversion processes.
This characteristic positions it as a potentially more economical and efficient alternative to green and blue hydrogen. Green hydrogen is produced from water using renewable electricity, while blue hydrogen is derived from fossil fuels with carbon capture and storage (CCS) technologies. Both processes are energy-intensive and expensive, with green hydrogen production costs ranging from $6 to $12 per kilogram. Significant subsidies are required to bring these costs down to a commercially viable level of $3 per kilogram. In contrast, natural hydrogen can be delivered for less than a dollar per kilogram due to its extraction-ready state, which avoids electricity-intensive processes.
The extraction of natural hydrogen involves drilling operations similar to those used in the oil and gas industry, including hydraulic fracturing. While this method leverages existing expertise and infrastructure, it also faces uncertainties regarding the sustainable generation and storage of hydrogen molecules underground. Current pilot projects are limited, and the technology’s commercial viability remains to be proven.
Oil and gas companies, with their extensive experience in subsurface operations, are well-positioned to lead the development of natural hydrogen. Their capabilities in exploration, drilling, and infrastructure management are crucial for overcoming the technical challenges associated with natural hydrogen extraction. However, relying solely on these companies may not be sufficient without supportive regulatory frameworks and substantial investments in research and development.
The growth of the natural hydrogen sector requires favorable regulations and incentives. Governments must provide clear guidelines for site licensing, exploration, and appraisal drilling. Additionally, significant capital investment is needed to scale up pilot projects and establish commercial operations. Without these supports, natural hydrogen may struggle to compete with other low-carbon hydrogen alternatives.
Despite its potential advantages, natural hydrogen is expected to make up only a small portion of future hydrogen supplies. According to the Energy Research Unit, even with successful pilot projects and supportive policies, natural hydrogen production might reach 17 million tons per year by 2050. This is a modest share compared to the anticipated demand for low-carbon hydrogen, projected to reach 200 million tons per year by mid-century.
Alternative hydrogen production methods, such as methane pyrolysis and gasification, also vie for a share of the market. Each method has its own set of challenges and advantages, but natural hydrogen’s lower production costs could provide a competitive edge if technical and commercial viability is demonstrated. Nonetheless, the development of natural hydrogen must not detract from efforts to advance other promising technologies.
