Doomed Planet

Multicoloured Fantasies of a World High on Hydrogen

I own a few shares in Australia’s two largest oil and gas producers, Woodside Petroleum and Santos. Of course, I didn’t predict the Ukrainian conflict but I did guess brilliantly (how in the world did I do it?) that wind and solar power are intermittent, that batteries are useless, and that therefore gas, in particular, would be required in ever greater quantities to fill the breach. Andrew Forrest of Fortescue Metals, is annoyed with me, at least at one remove. I don’t take it personally.

He’s really annoyed with fossil fuel industries. Or he seemed to be when reported in the (paywalled) Australian on May 16 as saying: “What I’m asking every fossil fuel industry to do is to give consumers … green choices as soon as you possible can. And don’t masquerade, don’t put lipstick on a pig in the meantime.”

Putting lipstick on a pig, has a particular connation, which I’ll come to.

Forrest is the self-same billionaire who’s made his fortune by exporting iron ore to China — iron ore which requires lots of fossil fuels to extract, transport and ship and which is then converted to steel which, together with power-hungry cement, makes all manner of power-hungry commercial and industrial things including, in China, hundreds of coal-power stations. There’s an irony for you.

Through a subsidiary company, Fortescue Future Industries (FFI), Forest is betting big on green hydrogen right around the world. To wit, ‘Green Hydrogen Can Save Us’ is its calling card. In April, for example, it was reported that FFI was eyeing the potential acquisition of twenty-two power stations in West Virginia for repurposing as hydrogen plants. It was also reported that FFI planned to tap the US government’s Hydrogen Program for a grant. Nothing untoward about that.

A grantless renewable energy project is a contradiction in terms. Find one and it would be a black-swan event. Green hydrogen projects are no exception. In fact, they are so speculative and expensive that they are bound to become prominent in renewable energy’s mendicant stakes.

Take the Asian Renewable Energy Hub (AREH), northeast of Port Headland, in Western Australia. This drawing-board project has gotten different and bigger from its start three years ago. From producing five gigawatts of wind and solar power for delivery by undersea cable to Indonesia, it is now a 26-gigawatt project designed to produce ammonia from green hydrogen for export around the world.

Envisaged is 2500 square miles of wind turbines and solar panels, a desalination plant to produce water in sufficient quantities and purity to support electrolysers of vast industrial scale, supplemented with Haber-Process plant(s) to convert the hydrogen produced to ammonia, for safer transport. What could possibly could go wrong; particularly when so many powerful corporations are backing it?

Pardon me for being sceptical, but when a project starts off one-fifth the size with the aim of producing one product and on a dime becomes five times larger with the aim of producing a quite different product, doubts creep in. Apropos, BHP some years ago was paying 60 cents per share. It invested heavily in shale-gas projects in the US. The bottom fell out of the market. BHP lost billions. Dividends were reduced to 16 cents. The CEO’s bonuses were cut a little. No record of him falling on hard times. A salutary reminder for me as a shareholder, as I later recalled, of the human frailties of overpaid mining magnates.

As it stands, the AREH project was rejected by former federal environment minister Sussan Ley. It threatened migratory species and wetlands, she said, so it will be interesting to see what new holder of the portfolio Tanya Plibersek does. It seems likely that environmental objections to such a “green project” will be overcome. Passing a business case is another matter.

Of course, it would never pass a business case in a sane world; without the demonisation of fossil fuels, and without subsidies and carbon credits. That’s as plain as the nose on your face. My own guess is that it will not get off the ground in any event. The abundance of much cheaper fossil fuels isn’t the problem. Woke politics and the susceptibility of a paganised human race to believe in scary hoaxes has overcome that one. The problem is internecine hydrogen wars, which are just beginning.

It is significant that Australia’s recent first export of liquified hydrogen (to Japan) was produced from brown coal. The carbon dioxide was reportedly captured and stored in an offshore reservoir. Brown hydrogen produced from coal and blue, produced from natural gas, with CO2 sequestered are “green” competitors to green hydrogen. Moreover, it seems that brown and blue hydrogen can be produced much more cheaply than green hydrogen. Up to three times more cheaply according to most reports. Here’s Santos CEO Kevin Gallagher crossing swords with Forest at a recent conference:

If we look at current prices in Australia, hydrogen made in Moomba from natural gas with carbon capture and storage would be about $14 per gigajoule before transport. Green hydrogen made at Port Kembla [by FFI] would be at least $38 per gigajoule before transport – a price Australian manufacturers could not pay.

Woke chatter has it that the costs of green hydrogen will come down with the help of technology and scale. But why won’t technology and scale help all hues of hydrogen? This a huge problem when you are investing untold billions of dollars in bizarre schemes requiring desalination plants and vast arrays of wind turbines and solar panels before ever beginning to produce one tank of ultra-expensive hydrogen for conversion to ammonia.

Hence, to go back to it, that reference by Forest to lipstick on a pig. The pig in this case is clearly gas and coal. And the lipstick, burying the CO2. I dare say he will be joined by all those with a billion dollars and more at stake in green hydrogen. But this time it’s not an easy sell. Carbonless hydrogen is carbonless hydrogen, whatever the source.

True, it’s all a gigantic crock when you can burn coal and gas directly. But I’m talking about the brave new net-zero world. And, in this world, conflicts of a colourful kind are afoot between true believers, with much more to come. Green versus an axis of brown and blue. Hopefully, they’ll exhaust themselves, run out of money and taxpayer largesse, and we can get back to burning fossil fuels directly. I’m dreaming again.

 

13 comments
  • Tony Tea

    On top of the fossil fuels necessary to get the hydrogen, the energy required to get it is more than the energy it delivers. It doesn’t even reach the heights of a zero sum game!

  • DougD

    I hope Twiggy or Cannon-Brookes haven’t read Gulliver’s Travels. They might get some more ideas: “The first man I saw was of a meagre aspect … He has been eight years upon a project for extracting sunbeams out of cucumbers, which were to be put in phials hermetically sealed, and let out to warm the air in raw inclement summers. He told me, he did not doubt, that, in eight years more, he should be able to supply the governor’s gardens with sunshine, at a reasonable rate: but he complained that his stock was low, and entreated me “to give him something as an encouragement to ingenuity, especially since this had been a very dear season for cucumbers.”

  • Biggles

    Right-on Tony Tea! Reminds one of windmills, doesn’t it? There is not a windmill in the world which has produced more energy than was used to create it.

  • robtmann7

    Anyone who can write ‘batteries are useless’ is scarcely grappling with the essentially quantitative nature of the assessments he then sketches. Nevertheless this polemic may be a useful glimpse of the bizarre colors-of-hydrogen babbling.

  • STJOHNOFGRAFTON

    Hydrogen used to be produced via the production of ‘water gas’ (a mixture of H₂ and CO) which was/is produced by the reaction of steam with hot coke. Of course, the dreaded, nasty coal had to be combusted to get the coke but that was all part of the steel making industry in the days of yore when life was simpler and most things made sense. Now hydrogen gas has become wokeified. We suspect this because hydrogen which was once produced simply as a by product now has to be produced in the most difficult way imaginable via woke, politically correct madness.

  • Peter Smith

    robotman7, my comment that batteries are useless, has to be understood in context. The context is supplying back-up power for RE. The cost of batteries to supply power for hours and hours on end, when the wind is still and the sun isn’t shining, is quite simply astronomical; infeasible; impossible. In that particular sense they are useless. But, of course, they have their uses to even out irregular power generation and to provide very short-term back up.

  • Tony Tea

    Indeed. Batteries help to maintain supply when there is a momentary fault somewhere else. These big batteries are glorified fuses. They are a vanishingly small percentage of the overall network capacity, but they are a superb, if expensive, means of assisting in netwok stability.

  • pgang

    Interesting article Peter. The descent into madness continues. Let’s not forget that we are a society that believes ‘chance’ is the ultimate creative power. No madness is too great when that’s the hill you’re willing to die on.

  • Rebekah Meredith

    Well said, pgang!

  • PT

    Twiggy has always been a spinner. Does anyone remember Anaconda? Murrin Murrin still runs and is (I suspect) now profitable. But none of the original investors made money at all. Clearly Twiggy’s idea is that legal fiat will shutdown “non-green” forms of producing H2. He may well have read things right.

    However he has a direct financial interest in all this, just as he did in promoting China’s diplomats. It’s akin to quoting 18th Century African slave traders as proof that the fellow Africans they were selling to the transatlantic slave trade were all for it!

  • acaston

    Let the consumer decide in a free, un-subsidised market

  • Alice Thermopolis

    Another great post PS. Thank you.
    I don’t often indulge in Schadenfreude. This morning, however, hard not to do so when I heard the new Minister for Resources, Energy, etc., confessing the only solution to the current energy price surge was to increase coal-fired power generation.

    DougD: Your mention of Jonathan Swift brought to mind the quote below from the same book. Surely applies to the current “magical thinking” hydrogen. Governments are being duped/dazzled into taking all the project risk, while giving most of the profits (ha, ha) to their promoters.

    “I went into another chamber, but was ready to hasten back, being almost overcome with a horrible stink. My conductor pressed me forward, conjuring me in a whisper “to give no offence, which would be highly resented;” and therefore I durst not so much as stop my nose. The person present was the most ancient student of the academy; his face and beard were of a pale yellow; his hands and clothes daubed over with filth. When I was presented to him, he gave me a close embrace, a compliment I could well have excused. His employment, from his first coming into the academy was an operation to reduce human excrement to its original food, by separating the several parts, removing the tincture which it receives from the gall, making the odour exhale, and scumming off the saliva. He had a weekly allowance, from the society, of a vessel filled with human ordure, about the bigness of a Bristol barrel. It served him well, for now he was trying to devise ways of detecting a human footprint in the air.” (L Gulliver, ship’s captain and diarist, May, 1707)

  • john.bunnett

    The champions of hydrogen as a fuel don’t seem to realise that hydrogen burns to form H2O, which is a stronger greenhouse gas than CO2. So much for reduced greenhouse effect!

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