Hydrogen has been commanding headlines lately as the “next big thing” in the global journey toward decarbonization. As a zero-carbon fuel that emits only water, hydrogen has the potential to support power generation, energy storage, heating, transportation and the production of green chemicals such as ammonia/fertilizer, methanol and petrochemical products.
Although hydrogen is a molecule, it can be produced via several pathways. Most of the focus has been on green hydrogen (i.e., hydrogen produced using 100% renewable energy via water electrolysis), which promises to help facilitate a net-zero energy future. Although pilot projects are underway, large-scale green hydrogen projects are still a way off as the industry works to develop, commercialize and fund the infrastructure needed to make green hydrogen a reality.
This is where blue hydrogen can play an important role. Produced using natural gas with the carbon emissions captured and stored or utilized, blue hydrogen can offer a low-cost, lower-carbon alternative while green hydrogen supply chains are advanced. Although the use of blue hydrogen today is minimal, the combination of abundant natural gas supplies, existing infrastructure, and available carbon capture, utilization and sequestration, or CCUS, technologies makes it a favorable near-term opportunity to integrate low-carbon hydrogen at scale.
You can’t talk blue hydrogen without focusing on CCUS. Integration of CCUS technologies is an integral component to the success of blue hydrogen. CCUS solutions vary in application and include removal of carbon dioxide from natural gas streams, post-combustion exhaust, flue gas and the atmosphere so it can be stored in suitable underground reservoirs or used in alternative product development.
Today, the industry is investigating new ways to monetize and use captured carbon. Traditionally, this has been through enhanced oil recovery, currently the largest industrial use of CO2. But carbon can be used in products that provide additional revenue, such as mixing carbon into concrete, refining it into synthetic fuels, making it into plastic and feeding it to grow algae and biomass.
For example, Black & Veatch recently worked on a project for NovoNutrients, a California-based biotech company that is transforming CO2 emissions into alternative protein ingredients. The company produces a protein flour composed of bacteria that were fed a diet of CO2 and hydrogen. To do this, the company captures and processes flue gas emissions from a neighboring manufacturing facility to feed the bacteria, effectively transforming flue gas into fish food.
Once produced at commercial scale, NovoNutrients hopes to sell its protein flour as commercial livestock feed for any farm that relies on fishmeal (e.g., fish, hog and poultry farms), and maybe one day even offer a product designed for human consumption.
The use of blue hydrogen will continue to expand as more CO2 capture technologies are commercialized and related costs fall. More CCUS projects are projected to come online in the United States, backed by additional funding from Congress, which is pushing for the implementation of better CCUS technologies at scale. In addition, 45Q tax credits are meant to incentivize more investment, reduce cost and further develop access to CO2 transportation and sequestration infrastructure in the United States.
The U.S. Department of Energy is also funding research and development into direct air-capture technology, an emerging negative emissions technology, recently awarding Black & Veatch $2.5 million in federal funding to join a first-of-its-kind project directed at scaling technology and design to capture 100,000 tons of CO2 per year from ambient air.
Canada is also seeing strong financial incentives with its adoption of a carbon tax that increases each year, escalating to CA$50 per ton by the end of 2022. Even China, the world’s largest emitter of carbon dioxide, announced a plan to more than double its carbon capture capacity by 2025.
These efforts will result in newer, more cost-effective technologies that will help advance CCUS and blue hydrogen as more viable options.
Blue hydrogen is particularly attractive for regions that have access to abundant natural gas reserves, CO2 pipeline and sequestration sites, and the existing fossil-based infrastructure to transport and store it. In these areas, the potential for producing low-carbon hydrogen in the near term is strong, especially on an economically favorable basis.
In the United States, we see the greatest near-term opportunity along the Gulf Coast, with its offshore drilling; in the Appalachia Basin, with its access to low-cost natural gas from the Marcellus and Utica shales; and in North and South Dakota, with their proximity to the Bakken Shale Play. All these regions and geographies are recognized to have vast underground capacity and capability to sequester the captured CO2.
Western Canada also has access to fossil-based resources—particularly in Alberta and Saskatchewan, two of the biggest oil- and gas-producing regions in the country—as well as access to geophysical assets such as depleted oil and gas fields or saline aquifer formations that enable storing CO2 underground.
In Europe, the best near-term opportunity for blue hydrogen centers around the North Sea, with its extensive fossil resources and geological carbon storage, which would benefit the United Kingdom, Norway, Sweden and other countries.
When talking about geographical resources, the Middle East has abundant access to both renewable energy (in the form of solar) and fossil-based resources, enabling it to pursue both green and blue hydrogen projects for export. S&P Global Platts reports that the United Arab Emirates plans to focus its efforts on blue hydrogen, tapping its massive oil and gas sector and partnering with South Korea to develop a hydrogen supply chain that involves the large-scale expansion of blue hydrogen.
Although blue hydrogen can serve an important role in rounding out the hydrogen economy, particularly when it comes to utilization of hydrogen as feedstock (i.e., for chemical production), several challenges remain.
Blue hydrogen has been criticized based on fugitive methane emissions (emissions that are not caught by a capture system because of leaks, evaporation losses, accidents or equipment failures). But a variety of preventive measures and technologies can help minimize the release of fugitive emissions, starting with the proper installation of equipment and extending through an ongoing preventive maintenance and monitoring program.
Blue hydrogen also found itself with some bad press after a 2021 study published in Energy Science and Engineering found that “the greenhouse gas footprint of blue hydrogen is more than 20 percent greater than burning natural gas or coal for heat.” Other publications, however, found reason to cast doubt: “As with any scientific study, the results generated are only relevant to the inputs made,” claimed an article in Forbes. The author noted that the study (Howarth and Jacobsen 2021) used a higher-than-average methane leak rate and assumed that producers would use steam methane reforming with a carbon capture rate of 76%, rather than “the planned blue hydrogen technology choice,” auto-thermal reforming, which has an expected capture rate of at least 95%.
But the No. 1 barrier to large-scale blue hydrogen production stems from regulatory challenges. Several hurdles exist when it comes to permitting carbon capture and sequestration projects, particularly on the back end. This includes being able to transport the recovered carbon and then safely disposition it underground and determine the necessary levels of ongoing monitoring.
Transitioning the world to a cleaner energy future will require a multi-pronged approach. Blue hydrogen can play a significant role by complementing the global hydrogen portfolio.
The stage is already set for the large-scale expansion of blue hydrogen: Proven carbon capture technologies already exist, with related cost-reduction efforts and additional advancements on the way, and several critical regions around the world are already well-positioned to support blue hydrogen by leveraging their access to natural gas and the infrastructure that supports it.
To help make blue hydrogen a reality, the world needs regulatory support that both incentivizes captured carbon and minimizes some of the capital costs associated with the projects. When it comes to the global push to reduce carbon emissions, blue hydrogen offers a viable and cost-effective solution.