Future hydrogen production in Alaska?
Does the state’s abundance of natural gas provide an opportunity to cash in on what appears to be a burgeoning clean fuel? Alan Bailey Petroleum News
While Alaska’s economy continues to rely heavily on oil production, with some level of global oil demand likely to continue well into the future, is there potential for the state to also benefit from the increasing interest in carbon-neutral fuels by moving into the production of hydrogen from natural gas? During a Dec. 10 talk to Commonwealth North consultant Mark Foster talked about this intriguing possibility.
There is much interest in the use of hydrogen in conjunction with fuel cells as a means of powering road vehicles, as an alternative to the use of battery powered electric vehicles. Liquid ammonia, a material containing hydrogen and nitrogen, can also be used as a clean fuel, as a substitute for diesel fuel. Most hydrogen is currently produced through the steam reforming of natural gas, a resource that Alaska has in plenty. And the state has past experience of manufacturing ammonia from natural gas at a fertilizer plant on the Kenai Peninsula.
Primarily using findings from a hydrogen road map recently published by McKinsey & Co, Foster outlined some of the opportunities and challenges that Alaska would face in entering the hydrogen industry.
Carbon sequestration Foster commented that the manufacture of hydrogen from natural gas results in the production of carbon dioxide. So, to market the hydrogen as a clean fuel, it is necessary to capture and sequester that carbon dioxide. Clean hydrogen can be manufactured through the electrolysis of water. However, this production technique is significantly more expensive than production by the steam reformation of gas, even taking into account the cost of carbon sequestration, Foster said. The steam reforming technique is likely to remain competitive for some time into the future, he commented.
And Alaska, with its existing oil and gas infrastructure, and with the possibility of injecting waste carbon dioxide into underground reservoirs, seems to have the potential for developing a hydrogen industry.
“I do think that there is a lot of opportunity across the oil and gas sector to monitor and potentially build up their hydrogen production capacity, as hydrogen markets grow on the demand side around the world,” Foster said.
Use in transportation The big growth opportunity for hydrogen demand revolves around its use as a road transportation fuel, particularly in applications such as trucking fleets. Applications that can benefit from the high energy density of hydrogen seem particularly appropriate. Currently hydrogen is used to fuel material handling technologies such as forklifts. And, although transportation only shows up as tiny portion of current hydrogen usage, there are early indications of a future increase in demand for the fuel. Anheuser-Busch’s fleet of vehicles for delivering products around the United States, for example, has 10 hydrogen fuel cell vehicles for every electric truck ordered, Foster said.
“So there’s some very interesting validations going on by people who have been in the logistics business a long time and understand it,” he said.
Other possibilities include use by the Department of Defense in its vehicle fleet, and the mixing of hydrogen with the natural gas used for heating buildings, to reduce the carbon footprint of space heating. The use of hydrogen fuel cell powered motors in railroad locomotives is another possibility.
In Alaska there are potential synergies with the aviation and shipping industries, with the use of hydrogen in the manufacture of fuels for these industries, Foster said.
Price-performance improvement With much research and pilot testing in the offing, big questions revolve around how quickly the price-performance characteristics of the hydrogen-based technology will ramp up. Will it become possible to reach the kind of improvements in price and performance that have been achieved with wind and solar energy technologies? Foster suggested that hydrogen technology will probably need government policy support for around a decade, for the technology to become cost competitive. Another driver would be greenhouse gas emissions policies.
However, hydrogen production and use has the potential to create domestic revenue and domestic jobs, with a locally produced energy resource that comes with significant benefits in terms of reducing air pollution and greenhouse gas emissions.
“That’s the basic pitch,” Foster said.
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