Episode #25: The Energy Transition, Hydrogen and the Color Palette (Sheila Harvey)

Joel Simon: I’d like to focus our attention on something that will remind everyone of high school chemistry. If we search the depths of our memory banks, we will all recall that hydrogen, the very first element in the periodic table, is an element that is essential—with no hydrogen, there is no life. But today, with your guidance, we are going to take an in-depth look into a very different aspect of hydrogen—its role in the energy transition. Can you set the table for us on this? What’s so special about hydrogen?

Harvey: Fans of hydrogen have had a joke over a very long period of time that hydrogen is the energy of the future and will always remain the energy of the future, but I believe the future is here for hydrogen. Why is it so topical these days? One, engineers love it. It’s a very efficient form of energy production. It can be produced without the emission of greenhouse gasses. It is efficient in its use, and it will be key to the decarbonization of the industrial sector, which will definitely be difficult to decarbonize without hydrogen. It’s definitely going to be a game-changing technology as the country and, in fact, the world moves through the energy transition.

Simon: That’s a great summary of hydrogen’s potential. Now, just the other day, you told me a great story about how whenever you mention hydrogen to a colleague or friend, one of the first things they ask you about is the1937 Hindenburg disaster. Almost everyone knows that short video clip, narrated by announcer Herb Morrison—it’s even archived in the Library of Congress. What are some of the challenges with hydrogen, and how do we get people over that searing image of a zeppelin crashing in flames?

Harvey: There are many challenges for the broad deployment of hydrogen, Joel. This public perception problem you identify is one of them. The introduction of new technologies often leads to some anxiety. Many people have seen that video clip of the Hindenburg disaster, and they fear the use of hydrogen. What many do not realize is that the fire seen in that clip was associated with the burning of the treated skin of that airship and not the hydrogen itself. Hydrogen is as safe and stable as many commonly used household and consumer items, such as gasoline, propane for gas grills, rubbing alcohol, and even nail-polish remover. Great strides have been made in the use and management of hydrogen so that it can be utilized safely. Vehicle manufacturers using hydrogen fuel cell technologies have done a tremendous amount of safety research, and have demonstrated that hydrogen fuel cell vehicles that are in collisions are safer than gasoline-powered vehicles. The industry will need to educate the public about hydrogen and how it can be safely used. There are other challenges for hydrogen, as well. One significant challenge is the transportation of hydrogen. It cannot be transported over long distances as a gas. There are options to address the challenges of moving hydrogen. It can be pressurized and delivered as a compressed gas. It can be liquefied for transport. It can also be converted to ammonia and transported as ammonia, and then used as ammonia at its destination point—for example, as a marine fuel to replace reasonably dirty marine diesel fuel. Or it can be reconverted to hydrogen and used as a hydrogen gas. Finally, there’s ongoing research on material’s compatibility. It is believed that hydrogen can be introduced into the existing network of natural gas pipelines for up to 25% of the volume of gas in the pipelines without requiring any replacement of existing pipelines or the appliances which are supplied by those pipelines. And there’s one other point to make. There are great developments in the technologies used to electrolyze water for the production of hydrogen. These technologies will allow for localized production of hydrogen and reduce the need to transport hydrogen over long distances.

Simon: The transport issue is really an interesting one. We know from the past number of years of political gridlock that waiting for transportation infrastructure could be a long, long road, so it’s really encouraging to see technology and science being used to solve these types of issues. Let’s turn now to the environmental side of hydrogen. I love this part because it brings out people’s creative side—please walk us through what is known as the hydrogen color palette and how that is being used in the energy transition, including by lenders to the industries that would likely be big users of hydrogen

Harvey: Hydrogen is largely characterized in this color palate as gray, blue or green hydrogen. Gray hydrogen refers to hydrogen produced with the traditional method—that is, the steam methane reforming of natural gas. Blue hydrogen refers to hydrogen produced through steam methane reforming of natural gas, but where the operation of the steam methane reforming is paired with carbon capture and storage, thereby eliminating the emission of greenhouse gasses. Green hydrogen is hydrogen that is produced with technology that does not produce greenhouse gasses. For instance, renewable energy like solar power or wind power would be a way to produce hydrogen without producing any associated greenhouse gasses. Nuclear energy can also be used to produce hydrogen without greenhouse gas emissions.

Simon: It sounds like hydrogen can lead the way for a clean and green strategy that is becoming ever more important to many industries today. If you have a chance, check out our previous episode, where Jon Ocker and I discuss the “E” (for environment) in ESG and how boards of directors are increasingly focused on this as an important element of their companies’ business plans.

Harvey: Thank you Joel, I couldn’t agree more. Scientists love hydrogen and believe it’s pivotal to the energy transition, and economists are in the process of estimating the value of the hydrogen markets. I’ve seen estimates that those markets will be valued at as much as $5.2 trillion by 2050, so this is an exciting new area for us all.

Simon: Sheila, it’s been great chatting with you today about hydrogen. My high school chemistry teacher would be really proud of us today! Thank you for the great insights into this cutting-edge topic.

Harvey: Thank you so much, Joel. It’s been my pleasure to speak with you today.