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Leonard Hyman & William Tilles

Leonard Hyman & William Tilles

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

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Gold Hydrogen Could Be A Game-Changer for Energy Markets

  • The race to develop non-fossil energy technology heat up, most emphatically in the nuclear arena.
  • Advances in geothermal technology may help to significantly increase low-carbon energy potential. 
  • In the case of gold hydrogen, we have a good idea of cost and timing, but not of the size and location of the resource.  
Hydrogen

For some time now, we’ve seen the race to develop non-fossil energy technology heat up, most emphatically in the nuclear arena. Large engineering firms have declared their intent to build modular reactors and smaller start-ups have declared they would operate prototype fusion reactors within years, not decades. 

We would rather bet on other possibilities, three especially. All are seemingly far-fetched, but perhaps less so than convincing people to live next door to a first-of-a-kind nuclear reactor. First is the solar power satellite. It’s like a solar thermal plant in space (think Ivanpah in CA), but instead of boiling water for steam turbines, they beam energy to Earth via microwaves. This is not a new idea, been around since the 1970s, but it is considered outrageously expensive at current space launch and transport costs. But it becomes more feasible if Space X makes its cost projections. We would also note that this doesn’t require any new technological breakthroughs— just for existing things like space launches to continue to decline in price. Related: Biden to Okay Year-Round Sales of Higher-Ethanol Gasoline From 2025

The second is advanced geothermal technologies which could open limitless supplies of renewable energy. This essentially consists of drilling wells into areas of both underground water and hot rocks to produce steam and drive a turbine. But as with satellite launches, these are extremely expensive ventures and we need a better handle on costs.

The third new energy technology which has been garnering publicity at the American Association for the Advancement of Science convention in Denver, is the exploration for and production of “gold” hydrogen which naturally occurs in the earth, and which may be renewable by means of rain water in contact with certain rocks. These natural deposits of hydrogen also contain helium, another valuable commercial find for the drillers. Small Australian wildcatters have identified likely resources in the United States and Australia, American money is coming in to explore, and Europeans have identified hydrogen resources, as well. How much? We don’t really know because exploration has just begun. But the estimates are big and even if only a small percentage of the potential supply came to market, gold hydrogen would make a difference.

In the end, though, nuclear, solar satellite, or advanced geothermal all require a strong, ubiquitous electric grid to carry the product to market. As we have argued before, the electricity industry needs to spend more to get into shape. Hydrogen producers can do their own logistics, possibly taking advantage of existing oil and gas plants or locating near load centers.

Getting to the business picture, gold hydrogen also does not require the invention or development of new technologies. It can sell to existing markets and looks as if resources may be located near existing infrastructure. Furthermore, according to some Australian estimates, it will come to market at a competitive price. In a sense, for both solar satellites and geothermal energy, we know the unlimited scale of the resource, but costs are still too high and timing uncertain. In the case of gold hydrogen, we have a good idea of cost and timing, but not of the size and location of the resource.   

By Leonard Hyman and William Tilles for Oilprice.com

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