WEBVTT - Drilling for Gold: The Hydrogen Beneath Our Feet 0:00:00.400 --> 0:00:03.440 This is Dana Perkins and you're listening to Switched on 0:00:03.960 --> 0:00:08.799 the BNF podcast. The hydrogen industry loves to assign colors 0:00:08.840 --> 0:00:12.320 to different production sources. Some of the names are instinctual, 0:00:12.520 --> 0:00:16.160 like green hydrogen, which is produced from renewable energy. Today 0:00:16.280 --> 0:00:19.600 we're talking about gold hydrogen, and with a name like that, 0:00:19.840 --> 0:00:22.120 we would assume that it's at the top of the stack. 0:00:22.400 --> 0:00:27.680 So what makes geologic hydrogen gold? Well, firstly, it's naturally 0:00:27.720 --> 0:00:31.240 occurring rather than man made, and it has the potential 0:00:31.320 --> 0:00:35.360 to be less carbon intensive and importantly less expensive than 0:00:35.520 --> 0:00:39.839 any other form of hydrogen. However, there are very limited 0:00:39.960 --> 0:00:43.920 successful examples of extraction and utilization to date, and the 0:00:43.960 --> 0:00:47.199 economics are nowhere near where they need to be. So 0:00:47.440 --> 0:00:51.520 will technology improvements and synergies with the helium industry help 0:00:51.600 --> 0:00:55.560 unlock its potential? To answer that question? Today, I am 0:00:55.640 --> 0:01:00.880 joined by Sammy Alisowi from BNF's Hydrogen team, alongside Mushfka 0:01:00.880 --> 0:01:04.360 Mishi from our Technology and Innovation team. They share some 0:01:04.440 --> 0:01:07.839 of the research found in their recent report Technology Radar 0:01:08.120 --> 0:01:11.640 Geologic Hydrogen. BNF clients will be able to find this 0:01:11.720 --> 0:01:14.760 at BENF go on the Bloomberg Terminal or at benf 0:01:14.800 --> 0:01:18.440 dot com. So let's discuss geologic hydrogen and whether it 0:01:18.480 --> 0:01:32.520 should truly be considered gold. Mushwika, thanks for joining us, 0:01:32.680 --> 0:01:35.160 Thanks for having me and Sammy great having you here too. 0:01:35.400 --> 0:01:36.759 Thank you for having me as well. 0:01:36.920 --> 0:01:38.880 Here we go. This episode is going to be gold. 0:01:38.920 --> 0:01:42.520 We're talking about gold hydrogen. We did a show many 0:01:42.560 --> 0:01:44.200 moons ago at this point, I want to say it 0:01:44.200 --> 0:01:47.080 was well over a year ago where we went through 0:01:47.200 --> 0:01:50.640 all of the colors associated with hydrogen and each of 0:01:50.680 --> 0:01:54.720 them has invariably a different source that the hydrogen came from. 0:01:54.760 --> 0:01:57.520 So today we're going to talk about gold hydrogen and 0:01:57.600 --> 0:02:00.080 to give a bit of additional color and open in 0:02:00.120 --> 0:02:04.400 tended so some context to that. It actually represents geologic hydrogen. 0:02:04.560 --> 0:02:09.240 So let's start off with this definition. What is gold 0:02:09.440 --> 0:02:11.240 or geologic hydrogen? 0:02:11.480 --> 0:02:16.240 Yeah, so geologic hydrogen, also known as clear why native orange, 0:02:16.320 --> 0:02:19.160 or as you said, gold hydrogen, is naturally occurring hydrogen 0:02:19.200 --> 0:02:22.440 that forms underground and often builds up in reservoirs within 0:02:22.480 --> 0:02:25.960 the Earth's crust. But let's break that down a little further, right, So, 0:02:26.000 --> 0:02:29.359 although the mechanisms of hydrogen production is uncertain, there's three 0:02:29.440 --> 0:02:32.519 kind of big hypotheses that have been thrown around or proposed. 0:02:32.639 --> 0:02:36.000 Researchers agree that at least some hydrogen is produced by 0:02:36.040 --> 0:02:40.160 each pathway, but which pathway is dominating unclear. So you've 0:02:40.200 --> 0:02:42.800 got the first one, which is radiolysis. It's basically a 0:02:42.880 --> 0:02:46.760 radioactive decay of heavy metal securanium or thorium, and essentially 0:02:46.800 --> 0:02:50.040 that radioactive decay can split water to become multiple particles 0:02:50.040 --> 0:02:53.280 like hydrogen, hydroxide, all of that, and this occurs on 0:02:53.400 --> 0:02:56.160 a geological time scale. The second one, which I think 0:02:56.240 --> 0:02:59.800 is like the most widely accepted one, is serpentization, and 0:02:59.840 --> 0:03:03.520 that when water reacts with iron rich automatic rocks like 0:03:03.560 --> 0:03:07.600 olivene under really high temperatures and the iron is reduced 0:03:07.680 --> 0:03:11.000 and in the process of reduction it releases hydrogen. There's 0:03:11.040 --> 0:03:13.480 some research out there that suggests that some eighty percent 0:03:13.720 --> 0:03:16.800 of the Earth's hydrogen could be a result of this process. 0:03:16.919 --> 0:03:20.079 The third one, which is highly debated but worth mentioning, 0:03:20.240 --> 0:03:24.040 is mental degassing, and that's when plate techton activity can 0:03:24.160 --> 0:03:27.080 essentially trigger the degassing of hydrogen that's already present in 0:03:27.120 --> 0:03:29.840 the Earth's core and mantle from way back, you know, 0:03:29.880 --> 0:03:30.520 the Big Bang. 0:03:30.960 --> 0:03:34.360 So I know that we benef like to actually refer 0:03:34.480 --> 0:03:37.040 to hydrogen by the fuel source, so we tend to 0:03:37.080 --> 0:03:39.440 refer to things as geologic hydrogen. I'm going back to 0:03:39.480 --> 0:03:43.200 these colors again, clear, white, orange, gold, What is the 0:03:43.240 --> 0:03:44.760 most popular one used? 0:03:44.960 --> 0:03:47.600 I would say gold hydrogen is the one that mainstream 0:03:47.600 --> 0:03:49.840 media has taken up, but we like to still refer 0:03:49.840 --> 0:03:51.040 to it as geological age two. 0:03:51.480 --> 0:03:55.080 There's one more. Natural hydrogen is pretty popular. There's a 0:03:55.080 --> 0:03:58.280 summit in Pairs that happened a couple weeks ago that 0:03:58.320 --> 0:04:01.480 I attended, and the summit is basically called Natural Hydrogen 0:04:01.520 --> 0:04:05.520 Summits or HNT. So natural hydrogen was also a very 0:04:05.520 --> 0:04:06.320 popular term. 0:04:06.720 --> 0:04:11.040 So surely if natural hydrogen was easy to extract and plentiful, 0:04:11.160 --> 0:04:13.440 there would not be need for companies to be making 0:04:13.520 --> 0:04:16.920 hydrogen from other fuel sources like renewables or natural gas 0:04:17.040 --> 0:04:19.920 or nuclear. So I could keep going. But hydrogen made 0:04:20.000 --> 0:04:22.240 from so many different sources. So I want to know 0:04:22.480 --> 0:04:24.800 how much of an opportunity is this and how much 0:04:24.880 --> 0:04:27.680 hydrogen are we talking about? Can you put this into context? 0:04:27.760 --> 0:04:29.640 You know, is this going to be Could it be 0:04:29.880 --> 0:04:33.240 the dominant source of hydrogen at some point or will 0:04:33.279 --> 0:04:35.080 it always be kind of on the fringe. 0:04:35.120 --> 0:04:38.520 So again, yeah, we're talking about a fraction that's accessible 0:04:38.760 --> 0:04:42.320 and that amounts to again in theory, we don't know 0:04:42.520 --> 0:04:45.080 how much, but it's in the millions per year. And 0:04:45.440 --> 0:04:47.080 how much that is is that a lot, like is 0:04:47.120 --> 0:04:48.279 a million a year a lot. 0:04:48.160 --> 0:04:50.640 For example years of what what's the unit of measure. 0:04:50.440 --> 0:04:54.039 Tons per year? And to put it into context, hydrogen 0:04:54.160 --> 0:04:58.920 consumed nowadays, the unabated or the not clean hydrogen every 0:04:59.000 --> 0:05:02.040 year is around nineteen million tons per year. So yeah, 0:05:02.120 --> 0:05:05.400 just to put into context that when we still talk 0:05:05.440 --> 0:05:08.480 about a fraction of what's out there or what's possibly 0:05:08.480 --> 0:05:11.719 out there, it's two things. One, it's very theoretical, but 0:05:12.200 --> 0:05:15.520 it has people optimistic because even a fraction is saw 0:05:15.520 --> 0:05:15.800 a lot. 0:05:16.320 --> 0:05:19.159 Okay, so we have it out there and it can 0:05:19.240 --> 0:05:22.120 in theory be extracted, but you have pointed out this 0:05:22.160 --> 0:05:24.280 may be very difficult to get to. So what are 0:05:24.320 --> 0:05:27.279 the technical barriers that are keeping us from being able 0:05:27.360 --> 0:05:29.800 to get it out of the ground? Basically, why do 0:05:29.880 --> 0:05:31.440 we not have this yet? 0:05:31.839 --> 0:05:35.279 So in theory, like oil and gas, geological hydrogen could 0:05:35.320 --> 0:05:39.120 be extracted from the earth using drilled wells, and there's 0:05:39.240 --> 0:05:42.960 kind of three main reservoirs or like stores of hydrogen 0:05:43.080 --> 0:05:46.080 people are investigating. So there's traps. That's the one that's 0:05:46.120 --> 0:05:49.080 kind of most akin to oil and gas. It's an 0:05:49.080 --> 0:05:52.920 accumulation of hydrogen that becomes trapped below like an impermeable 0:05:53.000 --> 0:05:55.679 layer of rock over time. And then there's the direct 0:05:55.760 --> 0:05:58.480 kind of root, which some developers are aiming to drill 0:05:58.600 --> 0:06:02.719 directly into iron ritual where cerpertalization is occurring and extract 0:06:02.720 --> 0:06:05.640 the H two as it is being generated. Theoretically, that 0:06:05.680 --> 0:06:09.240 could make geological hydrogen a renewable source of energy. The 0:06:09.320 --> 0:06:11.840 third bit, which I haven't heard a lot of activity 0:06:11.880 --> 0:06:13.920 being but it has been thrown around as a possibility, 0:06:14.000 --> 0:06:16.600 is stimulated hydrogen. That's a type of development where you 0:06:16.640 --> 0:06:21.240 could drill where it would potentially be produced, and then 0:06:21.279 --> 0:06:26.080 stimulated artificially by injecting hot water and produce it artificially. 0:06:26.320 --> 0:06:28.680 That's the one that's being referred to as orange hydrogen. 0:06:28.839 --> 0:06:31.760 This doesn't sound totally dissimilar from fracking. Am I right 0:06:31.880 --> 0:06:33.280 in drawing that parallel? 0:06:33.600 --> 0:06:35.799 You could do that parallel? Yeah, and I have also 0:06:35.880 --> 0:06:38.839 asked that question to people in the industry, But we're 0:06:38.839 --> 0:06:40.880 not there yet. We're not at the point where you 0:06:40.880 --> 0:06:45.240 could even consider stimulating the production of hydrogen. We're still 0:06:45.279 --> 0:06:48.279 at the point where just finding traps is becoming the 0:06:48.600 --> 0:06:49.159 main topic. 0:06:49.480 --> 0:06:51.720 Okay, so we're trying to locate where in the world 0:06:51.839 --> 0:06:54.680 these deposits are and then figure out how to get 0:06:54.680 --> 0:06:56.240 them out. Do we have an idea of where they 0:06:56.240 --> 0:06:59.120 are they evenly distributed? Everybody's got this or is it 0:06:59.240 --> 0:07:01.240 really constant in some countries? 0:07:01.760 --> 0:07:04.080 So I do have to highlight that current hotspots of 0:07:04.080 --> 0:07:07.400 geological hydrogen are a function of where it has historically 0:07:07.440 --> 0:07:10.280 been measured, rather than where it could be found in 0:07:10.320 --> 0:07:14.800 the future. So currently today scientists have recorded resources in 0:07:14.880 --> 0:07:19.400 a number of geographies, including the US, Australia, Brazil, Canada, Mali, Oman, 0:07:19.520 --> 0:07:22.800 the Philippines, Russia. Most of the recordings we have so 0:07:22.880 --> 0:07:27.160 far of actual national hydrogen artificially does concentrate in Eastern 0:07:27.360 --> 0:07:30.480 Europe and the general Northern Asia area, and that's because 0:07:30.640 --> 0:07:34.880 researchers were sponsored by the Soviet Union Soviet government rather 0:07:35.120 --> 0:07:39.880 to find another kind of abiogenic source of producing oil 0:07:40.240 --> 0:07:43.640 way back in the Cold War times. So where can 0:07:43.640 --> 0:07:46.680 we find it? Unsure? But it has been found kind 0:07:46.680 --> 0:07:48.520 of all across the world, and most of the activity 0:07:48.560 --> 0:07:52.119 today does concentrate within the general US North America area 0:07:52.120 --> 0:07:52.880 in Australia. 0:07:52.960 --> 0:07:55.360 I mean when you rattled off that first list of countries, 0:07:55.480 --> 0:07:58.080 those are the ones that are actively involved in other 0:07:58.200 --> 0:08:00.400 forms of hydrogen. So it's not surprising that kind of 0:08:00.400 --> 0:08:03.160 all eyes around hydrogen there, which then leads me to 0:08:04.000 --> 0:08:07.920 what companies have their eyes on this. Are they the 0:08:07.960 --> 0:08:11.600 same players that are exploring green hydrogen that made from 0:08:11.640 --> 0:08:14.920 renewables or those that are coming from blue hydrogen, which 0:08:14.960 --> 0:08:18.280 is natural gas and carbon capture and storage. Are they 0:08:18.280 --> 0:08:22.000 the same companies that are investigating other sources of hydrogen 0:08:22.040 --> 0:08:26.320 and actually energy made from energy or are they completely 0:08:26.360 --> 0:08:27.160 different companies. 0:08:27.400 --> 0:08:30.440 Yeah, that's a very good question. Today we've counted around 0:08:30.520 --> 0:08:33.880 fifty companies that are operating in this gold hydrogen industry, 0:08:34.040 --> 0:08:38.040 headquartered mainly again in North America, Western Europe, Australia, and 0:08:38.080 --> 0:08:40.360 I think the best way to segment the market would 0:08:40.360 --> 0:08:43.400 be within three main categories. So obviously, you have your 0:08:43.480 --> 0:08:47.440 pure play explorers that are prospecting for large reservoirs of hydrogen. 0:08:47.480 --> 0:08:49.840 You also have your oil and gas and you're mining 0:08:49.960 --> 0:08:52.880 like huge energy conglomerates that are funding the research and 0:08:52.920 --> 0:08:56.240 development into the sector. But you also have this new 0:08:56.360 --> 0:08:59.079 sector of people. We show these service providers that are 0:08:59.080 --> 0:09:04.040 hoping to support exploration activities with gas separation equipment, geological surveying, 0:09:04.240 --> 0:09:08.120 modeling tools, providing other geospatial data, or just like general 0:09:08.160 --> 0:09:12.240 like EPCs, which is engineering and procurement construction of folks. 0:09:12.480 --> 0:09:14.920 Okay, so you've said in theory a few times on 0:09:14.960 --> 0:09:18.560 this show, but there is a case of successful extraction 0:09:19.000 --> 0:09:22.320 in Mali. Can you explain kind of how that came about, 0:09:22.400 --> 0:09:24.400 how recently it was, and what they're doing there. 0:09:24.600 --> 0:09:27.360 Yeah, so it's actually a pretty interesting story. So essentially, 0:09:27.400 --> 0:09:31.520 in nineteen eighty seven, hydrogen was accidentally discovered when a 0:09:31.640 --> 0:09:35.480 cigarette of an engineer drilling water wells calls an explosion. 0:09:35.720 --> 0:09:38.679 The well back then was kind of deemed useless and cemented, 0:09:38.840 --> 0:09:42.480 But in twenty twelve, this company based out of Canada, Hydroma, 0:09:42.640 --> 0:09:45.319 purchased the rights to explore in the region. So when 0:09:45.320 --> 0:09:49.079 they unplugged the well, they discovered a nearly pure stream 0:09:49.120 --> 0:09:52.439 of gas made up of ninety eight percent hydrogen by volume, 0:09:52.679 --> 0:09:56.920 which they've soon routed to produce electricity for like nearby villages, 0:09:56.960 --> 0:09:59.720 and it's still used today. So the reservoir today produces 0:09:59.720 --> 0:10:02.600 about five to fifty tons of hydrogen per year. Most 0:10:02.640 --> 0:10:06.480 electoralizers are probably doing about three to four times more 0:10:06.520 --> 0:10:09.160 than that. So if five tons of hydrogen are produced 0:10:09.280 --> 0:10:11.719 and used in a wind turbine or fuel cell with 0:10:11.880 --> 0:10:15.240 fifty percent efficiency, you're looking at about one hundred megawatt 0:10:15.320 --> 0:10:18.440 hours of electricity, which is what like ten houses being 0:10:18.480 --> 0:10:19.400 powered in the US. 0:10:19.640 --> 0:10:22.200 So not a lot long story, short one thing about 0:10:22.200 --> 0:10:25.240 this project and a point that Mushfika mentioned. So this 0:10:25.360 --> 0:10:27.160 project is now being used as an example and a 0:10:27.200 --> 0:10:30.720 benchmark to start like exploring other places around the world, 0:10:30.960 --> 0:10:34.560 and it's definitely global. And speaking of companies, national oil 0:10:34.600 --> 0:10:37.360 companies in the Middle East are getting involved. They're interested, 0:10:37.600 --> 0:10:40.520 you know, they're experts in a lot of technical aspects 0:10:40.559 --> 0:10:42.959 that apply to extracting gold hydrogen of course, because it's 0:10:42.960 --> 0:10:46.360 similar to extracting oil and other molecules from the ground. 0:10:46.520 --> 0:10:49.800 And so they are now being more vocal and they 0:10:49.840 --> 0:10:54.040 reach out to those startups, those researchers that have experience 0:10:54.320 --> 0:10:57.600 in analyzing a lot of data to find out exactly 0:10:57.600 --> 0:11:01.240 what the potential is, and those national oil companies and 0:11:01.360 --> 0:11:03.720 just oil and gas giants reach out to them or 0:11:03.800 --> 0:11:07.320 vice versa to work together and collaborate so they fill 0:11:07.400 --> 0:11:10.480 the full picture, some provide data, and again with this 0:11:10.880 --> 0:11:15.960 project that is producing today right now, they've found potential 0:11:16.240 --> 0:11:21.000 with similar gas composition because Mushwika mentioned also it's the 0:11:21.160 --> 0:11:24.480 gas composition ninety eight percent hydrogen and the other two 0:11:24.559 --> 0:11:28.040 percent is methane and nitrogen. But ninety percent of hydrogen 0:11:28.400 --> 0:11:30.839 is a lot. It's very pure. But I'll get back 0:11:30.840 --> 0:11:33.240 to that point about hydrogen purity and how it plays 0:11:33.320 --> 0:11:37.080 into emissions costs and just overall projects. 0:11:37.520 --> 0:11:41.240 Well, so actually you've led right there. Let's talk about 0:11:41.320 --> 0:11:44.520 emissions associated with this because I brought up racking. Is 0:11:44.520 --> 0:11:48.000 this racking? We're going to see some weak and you'd 0:11:48.040 --> 0:11:51.240 mentioned methane, and even though it is a small percentage, 0:11:51.280 --> 0:11:54.200 overall it is a very potent greenhouse gas. So tell 0:11:54.200 --> 0:11:57.559 me how clean is it really? And are we talking 0:11:57.679 --> 0:12:01.240 about something that is really part of a transition to 0:12:01.320 --> 0:12:04.480 a clean economy or is this another bridge fuel which 0:12:04.600 --> 0:12:07.439 many people use to refer to natural gas as it's 0:12:07.760 --> 0:12:10.760 something that's on the way to decarbonizing, but maybe not 0:12:10.840 --> 0:12:11.480 the end game. 0:12:11.880 --> 0:12:16.160 So first off, you have now studies and companies who 0:12:16.160 --> 0:12:19.360 are looking into this, doing something called life cycle analysis 0:12:19.360 --> 0:12:21.520 where they look into a project from start to finish 0:12:21.600 --> 0:12:24.280 and see what are the possible emissions that can result 0:12:24.320 --> 0:12:27.040 from the process of extracting gold hydrogen. So you have 0:12:27.360 --> 0:12:32.560 stuff like fugitive emissions and embodied emissions. Now, fugitive emissions. 0:12:32.120 --> 0:12:34.640 Does sound like the ones that escape when you're extracting 0:12:34.800 --> 0:12:35.160 that's it. 0:12:35.280 --> 0:12:39.280 So fugitive emissions are the ones that are attributed to 0:12:39.320 --> 0:12:42.800 like methane, gas, nitrogen or yeah, any gas that escapes 0:12:42.960 --> 0:12:45.520 while you're in the process of like extracting the gold hydrogen. 0:12:45.720 --> 0:12:50.400 Embodied emissions are technically those indirect emissions that come from 0:12:50.720 --> 0:12:54.480 different processes and are attributed to different parts of extracting 0:12:54.520 --> 0:12:56.720 the gold hydrogen. So it's not directly related. 0:12:57.000 --> 0:12:59.520 I mean, it's everything related to the process. Right, It's 0:12:59.600 --> 0:13:01.640 kind of like the equivalent of a scope three. 0:13:01.520 --> 0:13:05.439 But for this exactly that's exactly it. So let's get 0:13:05.480 --> 0:13:07.920 down to whether or not it's clean. So based on 0:13:07.960 --> 0:13:10.800 life cycle analysis studies, they found that it is clean. 0:13:10.960 --> 0:13:15.320 How clean, it's cleaner than most types of hydrogen being produced. 0:13:15.679 --> 0:13:18.679 So in terms of numbers, in a gas mix of 0:13:18.840 --> 0:13:23.600 eighty five percent mole percentage of hydrogen and twelve percent 0:13:24.000 --> 0:13:28.120 nitrogen with around two percent methane, the carbon intensity is 0:13:28.760 --> 0:13:32.600 about zero point four kilograms of CO two per kilogram 0:13:32.679 --> 0:13:35.400 of hydrogen gas. That is extremely low. When you think 0:13:35.400 --> 0:13:39.800 about again other types of hydrogen working up from cleanness 0:13:40.240 --> 0:13:42.720 to less clean and then to what we have today, 0:13:42.840 --> 0:13:45.400 gold hydrogen sits at the lower end, meaning that it's 0:13:45.400 --> 0:13:47.920 the cleanest form of hygroen, or has the potential to 0:13:47.960 --> 0:13:50.720 be the cleanest, because again this is all in terms 0:13:50.800 --> 0:13:53.800 of potential and in theory and based off analysis. When 0:13:53.800 --> 0:13:57.760 we look at green hydrogen or hydrogen produced from machines 0:13:57.800 --> 0:14:01.280 called electrolyzers that split the water into hydrogen atoms and 0:14:01.320 --> 0:14:05.559 oxygen atoms. That's powered by green electricity or renewable electricity 0:14:05.600 --> 0:14:08.040 solar wind, and that's what makes it green hydrogen. Those 0:14:08.040 --> 0:14:12.199 emissions are anywhere between one kilogram of CO two emitted 0:14:12.240 --> 0:14:16.400 perkologram of hydrogen upwards to five kilograms of CO two 0:14:16.440 --> 0:14:19.480 perculogram of hydrogen. Now that's a lot of numbers, but 0:14:19.840 --> 0:14:23.120 just to say that gold hydrogen, it's less than one 0:14:23.200 --> 0:14:27.000 kilogram of CO two emitted percilogram of hydrogen. But that 0:14:27.080 --> 0:14:31.320 depends on hydrogen purity. So when there's less hydrogen in 0:14:31.360 --> 0:14:34.360 the gas composition, there's going to be more methane more nitrogen. 0:14:34.480 --> 0:14:37.680 The more methane rather than hydrogen, that means it's definitely 0:14:37.720 --> 0:14:39.840 going to be a lot more emissions. So it really 0:14:39.920 --> 0:14:42.840 comes down to the gas mixture. But based on studies 0:14:42.920 --> 0:14:47.480 of the most common gas mixture sites that they found 0:14:47.480 --> 0:14:50.000 and they do want to extract from, we're talking about 0:14:50.040 --> 0:14:52.920 zero point five to three kilograms of CO two per 0:14:53.040 --> 0:14:56.560 kilogram of hydrogen extracted. It is also within the guidelines 0:14:56.720 --> 0:15:01.120 of accessing tax credits and definitions in the IRA for example, 0:15:01.200 --> 0:15:04.280 or the Inflation Reduction Act, where they have outlined what 0:15:04.400 --> 0:15:07.840 is considered clean hydrogen. And again to put it into context, 0:15:07.880 --> 0:15:10.840 when we're talking about these numbers, these low numbers for 0:15:10.880 --> 0:15:12.960 gold hydrogen that falls within that definition. 0:15:13.280 --> 0:15:17.720 So let's talk about economic viability, which is the big 0:15:17.840 --> 0:15:20.680 elephant in the room here. So it can be hard 0:15:20.720 --> 0:15:23.600 to determine this with emerging technologies, and I feel like 0:15:23.600 --> 0:15:25.880 this is almost an unfair question, but there is some 0:15:26.040 --> 0:15:28.720 information that we should consider when it comes to extraction. 0:15:28.840 --> 0:15:31.280 So how much is it going to cost and will 0:15:31.320 --> 0:15:35.920 this cost comparison to other sources of production? Are we 0:15:36.040 --> 0:15:38.560 going to get there? And is it going to some 0:15:38.800 --> 0:15:40.960 days the hope that it is cheaper. I'm kind of 0:15:41.000 --> 0:15:44.040 asking a leading question, but my real question is just 0:15:44.160 --> 0:15:46.880 do we see a path to economic viability on gold 0:15:46.960 --> 0:15:51.520 hydrogen that is maybe more compelling than the other sources 0:15:51.760 --> 0:15:54.640 of hydrogen that are out there, given that there is 0:15:54.720 --> 0:15:57.480 so much waste when you make energy from energy. 0:15:57.760 --> 0:16:01.240 Long story short, geological hydrogen developer are targeting the cost 0:16:01.280 --> 0:16:04.440 of a dollar per kilogram of hydrogen as it is 0:16:04.560 --> 0:16:08.000 exiting the processing facilities, but it is unclear whether this 0:16:08.200 --> 0:16:11.480 value is the cost needed to kind of outcompete existing 0:16:11.520 --> 0:16:14.200 methods as you can have alluded to, or if the 0:16:14.240 --> 0:16:17.200 tech actually can achieve this cost. It's a little too 0:16:17.200 --> 0:16:19.680 early to kind of make either claim, but we can 0:16:19.800 --> 0:16:23.160 look at kind of what is driving the costs. There 0:16:23.280 --> 0:16:25.920 is I would say three main things to look at. 0:16:25.960 --> 0:16:29.960 The first thing, obviously, is capital expense. Geological hydrogen projects 0:16:30.000 --> 0:16:34.600 are very capital intensive with huge, like long bill times, 0:16:34.720 --> 0:16:38.720 so a project can easily cost five hundred million dollars 0:16:38.720 --> 0:16:41.640 to a billion dollars, depending on how many wells you're building, 0:16:41.920 --> 0:16:44.840 where in the world, it is, how deep each well is, 0:16:44.880 --> 0:16:46.960 what kind of processing of the gas you need, what 0:16:47.000 --> 0:16:51.000 the gas make sure actually is if you have more contaminants, 0:16:51.040 --> 0:16:53.280 like Sam you mentioned the methae, the nitrogen is you're 0:16:53.280 --> 0:16:54.920 going to have to spend a lot of energy and 0:16:54.960 --> 0:16:57.920 effort to kind of separate out the gas to make 0:16:57.960 --> 0:17:01.160 it like a pure stream of hydrogen. So capital costs 0:17:01.200 --> 0:17:04.880 can easily equal to like twenty cents per kilogram of hydrogen. 0:17:05.080 --> 0:17:07.280 And as I mentioned, you have a kind of a 0:17:07.359 --> 0:17:11.200 pure stream scenario and a mixed gas stream scenario. Operational 0:17:11.240 --> 0:17:15.159 expenses grow almost tenfold in a mixed gas scenario as 0:17:15.200 --> 0:17:17.359 opposed to one with a pure gas stream, and this 0:17:17.440 --> 0:17:20.639 is mainly driven by energy costs of gas processing, the 0:17:20.760 --> 0:17:23.679 need to kind of maintain and replace the equipment, and 0:17:23.960 --> 0:17:27.119 talking to these industry folks, the biggest expense is like 0:17:27.200 --> 0:17:30.920 the membranes and the equipment you're using to separate the gas. 0:17:31.080 --> 0:17:34.359 Additional costs can accrue upon like the depletion of the well, 0:17:34.480 --> 0:17:37.800 which then needs to be plugged or decommissioned, which can 0:17:37.840 --> 0:17:40.840 add like upwards of a one hundred thousand dollars per well. 0:17:40.920 --> 0:17:43.879 But it's interesting because the revenue projections people have given 0:17:44.200 --> 0:17:46.760 or disclosed to me do make this seem like it 0:17:46.800 --> 0:17:49.439 is worthwhile. Yeah, you're spending almost a billion dollars building 0:17:49.440 --> 0:17:52.600 a project, but the potential revenue that can come into 0:17:52.640 --> 0:17:55.000 the next like fifteen twenty years as the gas is 0:17:55.080 --> 0:17:56.960 being depleted is quite attractive. 0:17:57.640 --> 0:18:00.280 And to add to Mashrika's point, So in an actual 0:18:00.680 --> 0:18:03.439 what it's going to cost is hundreds of millions of 0:18:03.480 --> 0:18:05.920 dollars to extract gold hydrogen, and it really depends on 0:18:05.960 --> 0:18:09.280 the different sites, different purity levels. But those are estimates. 0:18:09.520 --> 0:18:11.639 You know, we're not gonna know for sure until we 0:18:11.680 --> 0:18:14.639 see a project come to fruition. And actually this is 0:18:14.680 --> 0:18:17.560 definitely speaking from experience and what we've seen with green 0:18:17.640 --> 0:18:21.120 hydrogen again bringing it as an example and what comes 0:18:21.160 --> 0:18:23.760 down to it. In the industry, when you think about costs, 0:18:24.000 --> 0:18:27.439 people are interested in how much a kilogram of hydrogen costs. 0:18:27.520 --> 0:18:30.320 So when we think about gold hydrogen, with certain assumptions, 0:18:30.520 --> 0:18:34.080 not even factoring in transport costs, which is that separate issue, 0:18:34.160 --> 0:18:37.399 geologic hydrogen can go from zero point five dollars to 0:18:37.480 --> 0:18:41.159 around just above two dollars per kilogram of hydrogen in 0:18:41.280 --> 0:18:44.080 terms of cost. Now, again that's an estimate with a 0:18:44.080 --> 0:18:46.840 lot of assumptions attached to it. When we look at 0:18:46.880 --> 0:18:50.800 green hydrogen, with some projects that we've seen actually get 0:18:50.800 --> 0:18:55.000 awarded funding and actually get a sign like how much 0:18:55.040 --> 0:18:57.680 it's going to cost and how with the subsidies it 0:18:57.720 --> 0:19:02.280 costs upward of twelve dollars per which is extremely expensive. 0:19:02.480 --> 0:19:05.639 When we think about gray hydrogen or the hydrogen being 0:19:05.640 --> 0:19:09.280 produced today, it's at one dollar per kilogram of hydrogen 0:19:09.320 --> 0:19:12.479 that's mostly in the US because of cheap natural gas prices, 0:19:12.560 --> 0:19:14.840 and you can go up to three dollars per kilogram 0:19:15.000 --> 0:19:17.840 of hydrogen. You want to make gold hydrogen competitive, so 0:19:17.880 --> 0:19:20.640 that's why, like Mushfika said, we want to target one 0:19:20.680 --> 0:19:23.640 dollar or less than one dollar percilogram of hydrogen. And 0:19:24.160 --> 0:19:26.960 based on estimates right now, they think geologic hydrogen can 0:19:27.119 --> 0:19:29.880 be cheaper, so it can be competitive. But what we've 0:19:29.880 --> 0:19:33.080 seen so far from green hydrogen, it's more than six 0:19:33.160 --> 0:19:35.600 times as much as hydrogen being produced today. 0:19:35.760 --> 0:19:37.919 So Sammy, I love that you brought up transport because 0:19:38.000 --> 0:19:42.520 this relates to more than gold hydrogen. This molecule it's smaller, lighter, 0:19:42.720 --> 0:19:45.600 more flammable than natural gas. And meanwhile, you hear the 0:19:45.600 --> 0:19:48.280 industry talks so much about how we're going to use 0:19:48.359 --> 0:19:50.720 a lot of the same infrastructure and we're going to 0:19:50.760 --> 0:19:53.080 put them on the same ships and use the same pipes, 0:19:53.200 --> 0:19:55.160 and I know that we have on this show talked 0:19:55.200 --> 0:19:58.000 about how that's not immediately going to be possible. They'll 0:19:58.040 --> 0:20:00.880 be quite a bit of retrofitting needed so in order 0:20:00.960 --> 0:20:04.600 to make this form of hydrogen possible to be used 0:20:04.640 --> 0:20:07.160 around the world, because think about the fact that now 0:20:07.200 --> 0:20:10.360 we can no longer locate the production facilities near where 0:20:10.359 --> 0:20:12.280 they need to be. The hydrogen is where it is 0:20:12.320 --> 0:20:15.879 in nature. How's the transportation story coming along, and have 0:20:15.960 --> 0:20:19.720 there been any breakthroughs there on the I guess technology side, 0:20:19.720 --> 0:20:22.119 but essentially, can we contain that molecule to get it 0:20:22.119 --> 0:20:22.920 where it needs to go? 0:20:23.280 --> 0:20:26.400 That's a great question. And again, the issue with transports 0:20:26.720 --> 0:20:28.879 ties back to getting it where it needs to be. 0:20:29.119 --> 0:20:31.879 So we're talking about demand at the same time, which 0:20:32.359 --> 0:20:35.280 has been a topic for hydrogen for a long time. 0:20:35.320 --> 0:20:38.840 Now issues with demand, and it's good to see now 0:20:39.000 --> 0:20:42.399 at different forums and summits like the recent one that 0:20:42.520 --> 0:20:45.600 happened in Paris, the Natural Hydrogen Summit, it was good 0:20:45.600 --> 0:20:47.679 to see that they're thinking about demand at this point, 0:20:47.680 --> 0:20:50.479 maybe not as much as they need to be, but 0:20:50.720 --> 0:20:53.439 it is a topic of discussion because they can't control 0:20:53.480 --> 0:20:57.040 where gold hydrogen is being extracted from those sites are static, 0:20:57.359 --> 0:21:01.240 so you're really limited to those sites or specific sites. 0:21:01.480 --> 0:21:05.000 And so now you think about, okay, we after we extract, 0:21:05.040 --> 0:21:06.800 after we're done with all of that, how can we 0:21:06.840 --> 0:21:08.160 get it where it needs to go? And how much 0:21:08.160 --> 0:21:10.000 it's going to cost. When I go back to the 0:21:10.040 --> 0:21:13.800 cost that I mentioned, that wasn't even accounting for transport costs, 0:21:13.880 --> 0:21:17.320 which can reach up to seven dollars per kilogram, which 0:21:17.400 --> 0:21:19.640 is a lot when you think about it. And when 0:21:19.640 --> 0:21:22.399 we talk about transport, one of the most common ways 0:21:22.640 --> 0:21:24.720 that they're thinking about right now, or that they were 0:21:24.760 --> 0:21:29.800