Cheap, abundant ‘clear’ hydrogen – too good to be true?

Plus: Carbon border taxes, nuclear-to-gas, Oz coal & solar woes + MORE

LEAD STORY: What if carbon-negative hydrogen could be produced at scale around the world for less than the wholesale price of natural gas in Texas? That’s the audacious claim being made by an Alberta-based start-up that’s making waves in the hydrogen world. Energy Flux takes a critical look at the technology.

FIRST UP: There’s a big ugly moral dilemma at the heart of carbon border taxes, Europe’s flagship tool for exerting climate leverage. Now the US is getting in on the act. The energy transition has never been so geopolitically fraught. That’s today’s breakout story (7 minute read):

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The moral conundrum of carbon border taxes
On paper, a carbon border tax is the perfect mechanism for coercing trade partners to reduce their emissions and, potentially, delver a global deal on carbon pricing – the Holy Grail of COP26. In reality, world leaders are unlikely to agree on rules for a global carbon market, meaning border taxes will be introduced unilaterally. These will punish exporting countries that do not decarbonise their energy-intensive products, even if development finance promised to help them transition fails to materialise…
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IN THIS EMAIL:

💥‘Clear’ hydrogen promises to undercut grey, green and blue H2

💥Belgium’s hasty nuclear exit prompts dash for gas

💥Australian grid threatened by failing coal plants *and* soaring solar

🌎GLOBAL HEADLINES by key topic (20+ links)

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💥‘Clear’ hydrogen promises to undercut grey, green and blue H2

If something sounds too good to be true, it usually is. Calgary-based Proton Technologies, a disruptive new player in the hydrogen space, is making bold claims about its ability to produce immense volumes of dirt-cheap carbon-negative H2 using old oil wells.

The concept is simple: acquire ageing wells for nothing from companies that are happy to rid themselves of the abandonment liabilities. These reservoirs contain large volumes of unrecoverable petroleum and can be used as reactor vessels. Pump oxygen into the well bore to react with the oil in place, and you produce hydrogen.

The hydrogen is brought to the surface via a second wellbore equipped with a special membrane that separates the H2 from waste gases such as CO2, which remain locked deep underground.

The reservoirs can even be used to sequester CO2 captured from other sources, hence Proton’s claims to be carbon negative. The CO2 would be co-injected with the oxygen and wastewater streams to trigger another chemical reaction that creates carbonates, i.e. CO2 is trapped in rock formed in the reservoir. This eliminates the tail risk of seepage that’s associated with conventional carbon capture.

Proton CEO and chairman Grant Strem told Energy Flux via email:

“We purchased our oil facility in 2017 and have been producing hydrogen ever since. Most of it has been incinerated but we began separating small volumes of hydrogen in 2018. Next we plan to ramp up to commercial production for offload by truck and clean electricity sales to the grid are expected to begin roughly 1 year from now. We have been loading small volumes into a tube trailer this year.”

Proton made headlines by claiming it can produce hydrogen for as little as $0.25 per kilogram of hydrogen. That’s significantly less than the cheapest, dirtiest form of production: unabated steam methane reformation (SMR) using natural gas as a feedstock, even before carbon tax is factored in:

Hydrogen at the price and volumes envisaged by Proton could revolutionise the entire energy industry, let alone the niche space of H2. Power generation, mobility and industrial processes could all be decarbonised using clear hydrogen and even save money in the process.

Sounds too good to be true, right? Well, here’s an alternative perspective…

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