Sitting at an airport as I return from a technical conference presents a great opportunity to reflect on interesting presentations and conversations with people who are working hard on new and exciting initiatives.
The second North American Helium and Hydrogen Conference, hosted by the Rocky Mountain Association of Geologists in Denver, built on its first conference in 2023. Geologists, engineers, marketing and downstream (processing) people attended to share stories about their work and projects, and to meet others working in their fields both academically and operationally.
Helium and hydrogen are true 21st-century commodities. Helium is critical to a variety of very high-tech applications – super-cooling magnets for medical MRI machines, enabling the safe operation of rocket fuel tanks, and providing inert atmospheres for fibre-optic and semiconductor manufacturing.
Hydrogen? It is supposed to be the miracle energy commodity of the 21st century.
However, things are not going well on a number of fronts – including figuring out how to make the stuff practically and economically. Geologists want to address that problem by finding deposits of naturally occurring hydrogen in the subsurface, and drilling for it the same way we drill for oil and gas.
Helium challenges
For many years, the U.S. supplied much of the world’s helium as a byproduct of natural gas production from huge gas fields in Kansas, Oklahoma, and Texas. More recently, Qatar, Algeria, and Russia have become big suppliers, extracting tiny percentages of helium from massive liquefied natural gas (LNG) streams. But in this world of growing geopolitical risks and growing helium demand, other sources are needed.
Geologists are trying to tease new helium out of the ground in Canada, the U.S., Europe, southern Africa, China, and many other places. There are some really innovative ideas – can we produce helium without also producing natural gas? Can we find it outside traditional sedimentary basins – as in the East African Rift? Can we co-produce other inert and valuable gases?
All good stuff – but the past couple of years have been somewhat discouraging. Some promising ideas have simply not worked out – which happens when one innovates. Other innovators have seen technical success but cannot make their ideas work economically.
Some new projects are very promising, but proponents are finding it tough to attract investors in a market with opaque pricing and unpredictable competitors. To be fair, investors find it tough to distinguish between excellent technical innovation and great-sounding ideas that have fundamental flaws.
Hydrogen challenges
I have written before about naturally occurring geologic hydrogen (Hydrogen: the ultimate path to net zero, or a whole lot of wishful thinking). It has been heavily promoted in some circles, and many see it as a potential saviour of the hydrogen economy that they want to replace hydrocarbons in the coming decades.
Until now, I have been highly skeptical about naturally occurring hydrogen, because nobody could show me a convincing story of how hydrogen could exist in large quantities in the subsurface, and how we could get it out fast enough. We would need to produce hydrogen much like we produce natural gas – very quickly from huge resource bases – in order to make it useful in the many energy applications people envision. Hydrogen producers would also need to undercut – or at least match – the cost of creating green hydrogen by electrolysis, or blue hydrogen from natural gas using carbon capture and storage.
I am skeptical because we have drilled millions of wells around the world looking for oil and gas – and have not yet discovered high-purity, high-deliverability hydrogen.
Proponents like to point to an isolated hydrogen discovery in the West African country of Mali, where hydrogen gas was discovered while drilling shallow water wells. Unfortunately, that looks to be a unique geological situation that so far has not been duplicated, and it is only big enough to fuel some electrical generation for one village.
Are we making progress?
Absolutely!
On the helium side, Canadian and U.S. prospectors have developed higher-potential, lower-risk prospects that promise to diversify and increase supply. More and more helium extraction is planned for new LNG facilities, and the engineering of the entire helium production and refining supply chain is becoming more efficient.
For hydrogen, we are developing better understandings of how hydrogen gas might be generated in the subsurface, which helps exploration greatly. Academics and industry are developing ideas about how hydrogen might be generated in real time by stimulating certain chemical reactions in fractured rocks underground that could bring up hydrogen in economic quantities. I saw a truly exciting hydrogen drilling prospect in southern France that appears to have all the necessary ingredients for success – a plausible source of hydrogen, reservoir rocks to hold it, and subsurface traps and seals to hold the accumulated hydrogen in place so that we can drill and produce it.
So, what is the problem?
There is no problem on the innovation front; we are making real-world progress in realistic time frames. We should be able to keep the helium market supplied barring any geopolitical catastrophes. We are making real progress on understanding whether naturally occurring hydrogen can make an economic impact within the next decade or two.
But these successes highlight the contrast between how things happen in the real world, and misplaced expectations of people who do not understand how innovation and value are created in the real world.
The hydrogen prospect in France is a great example. Brilliant idea and great work combining geological knowledge of the deep crust and mantle with petroleum geology learnings, data gathering, and engineering. But proponent 45-8 Energy (Hydrogen, the emergence of a clean energy) has been pursuing the concept for years now, challenged by limited datasets and the need to convince potential investors that their brilliant ideas are worth spending a bunch of risk capital. The regulatory hurdles have also been significant, as France has banned new oil and gas drilling and had no regulatory framework to govern drilling for hydrogen.
So it has taken more than two years for 45-8 Energy to acquire the necessary permits to test their ideas. Now they face the challenge of raising more money to drill a deep and expensive exploration well, and, if successful, to build facilities to process the hydrogen. Assuming they get that far, they will need to sell and transport their product to markets that may not yet exist through pipelines that definitely do not exist.
Yet proponents of the hydrogen economy, primarily those who believe humanity can significantly reduce greenhouse gas emissions over the next few years, find this progress far too slow to meet arbitrary targets such as “Net Zero by 2050”.
And they are right – progress is too slow to meet those targets. But that is a reflection on arbitrary and unfounded target-setting, not on the skills or hard work of the people that are actually addressing the problems.
We need to reconfigure mindsets to operate in the real world
Real progress in the real world takes great ideas, hard work, lots of money, and lots of time. The mindset that technology can be driven to achieve certain goals simply by setting arbitrary targets is wrong and must be discarded, because it is creating unrealistic expectations and causing untold damage as target after target fails.
If we want to minimize environmental consequences of greenhouse gas emissions, for example, we must step away from arbitrary targets like “Net Zero by 20xx”, and instead address real-world issues. I suggest:
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- Regulatory reform: We are beginning to understand in Canada that regulatory hurdles related to building new infrastructure and industry are holding back the development of our economy. But less publicized regulatory hurdles – such as the time to license a hydrogen well in France – are also important and have to be cleared away if we are to have a chance to make hydrogen economically significant.
- Intelligent policy encouraging new ideas and processes: Innovation and success come from many different places. A few innovations succeed, but most fail. Governments cannot predict nor direct success. Government’s real-world role should be to structure policy to enable success by innovators and industry.Instead, we often see government trying to “choose the winner” before we really understand what might work, and what will not. As an example, simply handing thousands of dollars to each consumer willing to buy a new electric vehicle is a very expensive and inefficient way to reduce CO2 emissions, particularly when better ideas remain unloved and unfunded.
- Taking the time to do things right: arbitrary deadlines (such global Net Zero by 2050) impose an unfounded atmosphere of crisis, inviting rushed, slipshod “solutions” that may be more costly and more environmentally damaging than the problems they purport to solve.
Humanity cannot dictate solutions – we must develop them. I think it would be great to have every policymaker (and every voter, if we could) spend some time with the scientists and engineers that are addressing big, material challenges – to gain an appreciation for encouraging and crafting solutions that work in the real world.
