Hydrogen Energy

by Richard T. Stuebi

Whenever someone mentions “hydrogen” to me, I immediately think of fuel cells. So, when someone mentioned to me in passing the other day something about BP (NYSE: BP) and hydrogen in Southern California, I was really confused: I didn’t think that BP was doing much with fuel cells these days.

Now I understand. In May, BP announced (press release) that it has partnered with mining-giant Rio Tinto (NYSE: RTP) to form a joint venture, named Hydrogen Energy, that has licensed integrated gasification combined cycle (IGCC) technology from GE (NYSE: GE) and will develop IGCC projects involving carbon sequestration — and one of its first projects will be a 500 megawatt facility located adjacent to BP’s refinery in Carson, California. (project description)

Hydrogen Energy’s efforts therefore have nothing to do with fuel cells. Hydrogen is simply the main constituent of the syn-gas produced from the gasification of the input fossil fuel (in Carson’s case, petroleum coke), which will be combusted in a conventional combined cycle for power generation.

A few observations occur to me from this development:

1. The selection of the L.A. Basin of California for one of the first projects is extraordinary. It’s hard enough to permit a new office building in Southern California, much less a 500 megawatt powerplant that is more akin to a refinery. Then too, with California’s climate initiatives, placing any new industrial infrastructure in-state has to be massively challenging. I would have guessed someplace like Texas for one of the early IGCC plants — easy to get things done there. The Carson IGCC project is only possible because the gasification step produces relatively pure streams of by-products that can relatively easily be diverted from being emitted into the air — including CO2, which will be pumped underground. So, the Carson location for an early project is great PR not only for all the corporate parties (“We’re producing clean domestic energy for California”), but for the state of California too (“See — we’re not anti-energy, we support energy businesses and new energy projects.”).

2. The sequestration of the CO2 will occur in the Southern California oil/gas fields, which are very mature and can thus benefit from enhanced oil recovery (EOR) techniques to pressurize the underground reservoirs and thereby improve yields. The increase in oil/gas production, worth a lot at current energy prices, helps offset the costs of CO2 capture and pumping. As more carbon sequestration projects occur, I expect to see many of them in areas with old producing fields that can benefit from EOR, such as Pennsylvania, Ohio, West Virginia, Kentucky, Illinois and so on. Oh, coincidentally, these states have lots of coal to burn in the IGCCs.

3. According to the press release BP partnered with Rio Tinto in order to obtain access to Rio’s
coal mining/extraction expertise. In this context, the selection of Rio makes sense: like BP, it too is a global colossus of a company, and gargantuan corporations tend to work best with partners of similar size. If other big oil companies want to follow in BP’s footsteps to pursue IGCC with a coal company as partner, there will be few players in the coal industry of similar heft. Indeed, I wonder if one way to view this partnership as BP moving more into coal — and if other oil majors will increase their coal activities?

4. The naming of the partnership as “Hydrogen Energy” is an interesting choice. I used to think that the “hydrogen economy” hype of a few years ago had produced a semantic burden to be avoided rather than embraced. But, here come BP and Rio Tinto — no dummies — deliberately positioning their venture not as “carbon-free” or “zero emission” or “clean coal”, but rather as “hydrogen”. This has significant branding implications. If Hydrogen Energy becomes a success, hydrogen as an energy source (or, more properly, an energy storage approach, or energy “carrier”) may therefore become more validated in the eyes of those who are currently skeptics.

5. In turn, if Hydrogen Energy really takes off, and hydrogen’s reputation is burnished, fuel cells may ultimately benefit substantially. If many IGCC plants become installed across the continent, it becomes more plausible to envision hydrogen transport and distribution on a mass-scale to support fuel cells — initially in selected stationary power applications, perhaps ultimately for vehicles too.

Of course, it will take years for us to see if Hydrogen Energy becomes a big deal, or is yet another example of a highly-touted joint venture between two mega-corporations that ultimately comes to very little.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. (Note: Mr. Stuebi has no affiliation whatsoever with BP.)

2 replies
  1. Anonymous
    Anonymous says:

    HYDROGEN POLITICS: Here is how it works:While all of the falsified points against hydrogen have been counter in numerous papers, such as: http://www.rmi.org/images/other/Energy/E03-05_20HydrogenMyths.pdfIt is important to consider the following:The oil and auto industry consider the battery industry to be a failed technology that can never be made or delivered in the form factor, price point, range or efficiency that they care about. (It doesn’t matter, for this argument, what YOU think.) So they got together and used “layered anti-evangelism” to manipulate the battery industry. “Layered anti-evangelism” is an intelligence agency third world manipulation device that works like this:1. Select the target: In this case it is hydrogen fuel cells, which have been demonstrated to beat batteries on every business front.2. Select your internal agents. In this case lobbyists and “writers” that are paid by the oil and auto industry.3. Have the agents contact and talk to the “sheep”. In this case the sheep are the writers for battery industry trades and heads of battery lobby or support organizations.4. Have the agents convince the sheep via skewed data provision. In this case selected reports were written and then shown to the sheep to convince the sheep that hydrogen fuels cells would steal their funding, put them out of business and that the only source of hydrogen was from the “evil oil companies”.So you have battery evangelists who are anti-hydrogen sheep:Ulf Bossel of the European Fuel Cell Forum Alec Brooks- EV World Sam ThurberYet for every manipulated argument they come up with, they are shot down by hundreds of sites with facts, ie: http://www.rmi.org/sitepages/pid985.phpWHY? Because you can make hydrogen at home and the ability to do it fast, cheap and clean is coming 40 times faster than they thought.This happened, using the same process, to:1.) Electric light rail in America (US Vs. National City Lines, 334 US 573)2.) The EV1 (Movie: Who killed the electric car) Etc.The interventions of these ‘doubters’ fall into a number of clear categories which I’ll summarise as:1 “You can’t succeed because no-one has ever succeeded at this (sports car making / battery-power / taking on the majors, etc etc) before”. – May I commend to everyone Dava Sobel’s wonderful (and short!) book, “Longitude”, which offers a perfect map of the tendency of government and the scientific establishment collude to reject true innovation. This effect can only be overcome when a tipping-point of perceived popular utility is reached, at which point the establishment suddenly has a bout of collective amnesia about their earlier denials. (Same story many times over, historically, of course – from Gallileo onwards.)2 “It’s inefficient to carry around”. Rather as it’s inefficient to carry around a full tank of gas, perhaps? Or to carry around a SUV chassis which itself weighs a ton or more? (Come on, Detroit, you can find a better argument than that, surely?)3 “This technology is not a solution and never will be.” This very much reminds me of the IBM’s famously short-sighted take on the prospect of home computing, back in the 70s. The language of these contributions, let alone their content, points to a thought-process rooted in volume-producers’vested interests. Consider the successes of some other new-tech challengers of vested interests: Dyson taking on Hoover with a bagless vacuum-cleaner; Bayliss bringing clockwork (i.e. battery-less) radios and laptops to the third world; thin-film solar panels (sorry, can’t remember who, but you know who I mean). On this point, it was deeply depressing, at a high-level environmental science conference of the UK Government last year, for me to witness a “leading and respected” Professor of Transport rejecting electric traction out-of-hand with the words “it will never be more than just power storage on a trolley”. Given that this “expert” was advising ministers of state setting future national policy on alternative transport, my immediate thought was “Who pays this man’s research grant?”So let’s be vigilant for any who claim, in a smooth way, that invention can’t possibly have the answers. From a position of some expertise in this field, may I remind readers that the “you-don’t-understand-how-our-industry-works” argument has been the policy instrument of choice for numerous corporate fraudsters and protectionists down the ages (Enron, anyone?). New York’s energetic DA, Mr Spitzer, has made a fine career out of challenging such thinking in the finance sector (with the simple rejoinder: “WHY does your industry work like that? Against customer choice?”). And then of course there’s the entire consumer movement (remember Flaming Fords? remember “Unsafe at Any Speed”?). We can and should ask the same questions of the conventional auto industry.The good news is that genuine innovation will out – as long as ordinary consumers are able to find it and buy it. One of the early lessons of the twentyfirst century, thank goodness, is that the old-school, browbeating style of corporate communication – terrorising one’s customers into rejecting alternatives – increasingly fails as people wise up to making decisions based on their own independently-gathered information about benefits and risks. (Interestingly, a popular reaction against “selling by fear” is also now happening in the political field. Now why might that be?) As a consumer, one doesn’t have to agree with the in-ya-face techniques of anticorporate critics like Michael Moore and Morgan Spurlock to still subscribe to the view that we can buy what we want to buy. We no longer want to be told by old-tech that new-tech is inherently suspect. Isn’t it old-tech that brought us dependency on oil, climate change, wars over energy sources?So c’mon people, how about a reward system for “spot the spoiler”? I’m all for free debate on the issues, but some of these blogs smell rather like the work of paid old-tech corporatists trying to sabotage your success.Challenge such interventions with the greatest possible vigour, and let consumers decide for themselves! 1.) Battery companies are spending millions of dollars to knock H2because it works longer, better, faster and cheaper than batteries! Most of the people writing these screaming anti-H2 articles are battery company shills or have investments there. H2 does beat batteries on every front so the should be SCARED! 2.) The steel unions hate H2 because H2 cars don’t use steel. Steel istoo hard to afford any more so nobody will use it in any case. 3.) Activists hate H2 because they think it can only be made by the oilcompanies and they hate the oil companies. This is a falsehood created by the battery and steel guys. 4.) Oil companies hate H2 because it is so much better than oil but theyonly get to hate it unto 2030 when the affordable oil runs out. Then they know they must love it because H2 energy will be all that is left. The Oil industry is dismayed that H2 is coming on so fast and they are trying to slow it down even more. 5.) Other alternative energy interests hate it because it is getting allof the funding because the polita-nomics are better with H2 than ANYTHING ELSE ON EARTH. We have made hydrogen at home with free energy. If the gasoline in your car blows up it will do a VAST AMOUNT more death and damage than H2 ever will.You are driving a MOLOTOV COCKTAIL. In 2030 oil is GONE and there is NO OTHER OPTION that can be delivered world-wide in time but H2!

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