Natural gas-sourced blue hydrogen to usher in new era of decarbonisation

Source: press release, 10 December 2020

illustration: GECF
illustration: GECF

Astronauts looking back at Earth affectionately call it the “Blue Planet” and it is only fitting that in the near future, humanity will be able to extract everything from electricity to industry to heating from what has come to be known as blue hydrogen.

This emerging new source of fuel, which leaves a lower carbon footprint in its wake, was the subject of a special virtual event entitled “Blue Hydrogen Strategy” and organised by the Gas Exporting Countries Forum (GECF) on 9 December, featuring guest speaker Steinar Eikaas, Equinor’s Vice President for Low Carbon Solutions.

The event was addressed by the Forum’s Secretary General HE Yury Sentyurin, who highlighted the role of natural gas in realising the hydrogen economy: “The GECF has joined a growing international consensus that blue hydrogen production from natural gas coupled with Carbon Capture, Utilisation and Storage (CCUS) technologies will play a significant role in the world’s transition to a sustainable energy future.”

The hydrogen economy is the use of hydrogen as a fuel, but is subject to intensive comparison, particularly between “various colours” of hydrogen. The most popular green hydrogen is obtained from renewables but is sub-scale, while the blue is produced from natural gas after pairing with carbon capture. The latter is also significantly scalable. Further, there is also potential for enriched natural gas, which is a blend of natural gas with hydrogen. There are other less evolved options such as green ammonia and turquoise hydrogen however their economics currently remain unfavourable.

“Green hydrogen consumes renewable electricity which is a problem as long as we don’t have surplus renewable electricity. So, there is a need to build huge amounts of renewable electricity generation alongside green hydrogen. Looking at the alternative of blue hydrogen, it builds on natural gas and we already have this technology in place and the network to carry this volume is in place, for example through pipelines for natural gas,” said Steinar Eikaas.

Currently, the cost of producing blue hydrogen is 50-100% above natural gas production, however the resultant fuel is completely CO2 free. The cost of green hydrogen, meanwhile, is 2 to 5 times above blue hydrogen.

Energy experts believe that hydrogen is the next frontier as it can fill the same purpose as, for example, natural gas, and decarbonise many of the same sectors fuelled traditionally by hydrocarbons.

“When it comes to the type of hydrogen, blue hydrogen has advantages simply because the infrastructure already exists and the oil and gas industry has the investment muscle,” explained Eikaas.

Giving a European example, the speaker said that the EU’s new hydrogen strategy, announced in July 2020, set very aggressive target of 40 gigawatts of green hydrogen by 2030 but left another 40 gigawatts for imports, thereby leaving the opportunity for blue hydrogen to fill in the gap.

“Europe will definitely need blue hydrogen to deliver the 2030 targets as it is cost effective in reducing large parts of the energy system, which will need hydrogen solution but can’t electrify,” noted Eikaas, while giving examples of low-carbon projects that Equinor is undertaking in various countries in Europe. The Norwegian company is also part of the consortium, NortH2, building Europe’s biggest green hydrogen project by 2024.

Thanking the speaker and the valuable efforts of the Norwegian government, one of the GECF Observer Members, Secretary General Sentyurin said: “We value the steadfast efforts of the Norwegian government in supporting a knowledge-based and environmentally-friendly energy industry.”

HE Sentyurin further added: “The GECF recognises the complex challenges imposed by climate change and strives to be part of the efforts undertaken by the international community to deal with environmental issues. Today’s virtual event fits completely within the scope of our Environmental Knowledge and Solutions initiative, since it aims at sharing best practises, acquiring knowledge and bringing solutions to meet the environmental challenges.”

According to the latest available figures from the GECF Global Gas Outlook 2050 (2020 edition), natural gas is projected to remain the fastest growing fossil fuel with a share of 28% in the global energy mix by 2050 from current 23%. Along the way, it will play a vital role in decarbonisation options, such as the blue hydrogen.

Referring to the Global Gas Outlook 2050, the GECF Head of Energy Economics and Forecasting Department Sokolov, noted that the Forum developed a dedicated scenario called the “Hydrogen Scenario”, and the results of the scenario suggest blue and green hydrogen to dominate the future of hydrogen production.

“According to the results of the scenario, almost half of the produced hydrogen will be sourced from natural gas by 2050, in the form of blue hydrogen. It is also forecasted that more than 10% of the total natural gas production in 2050 will be consumed by hydrogen,” said Sokolov.

In conclusion, HE Sentyurin said: “Natural gas, as an abundant, affordable and clean hydrocarbon source, has a central role to play in mitigating carbon emissions while simultaneously supporting progress on several sustainable development dimensions including the environmental, economic and social dimensions.”