Hydrogen – The Future of Decarbonization for the Oil and Gas Industry

With climate change and the consequences of evolving weather patterns becoming a significant concern, the targets for the reduction of carbon emissions grow tighter. The challenge for the oil and gas sector is to seek a path to decarbonisation and remain a relevant force in the energy industry and beyond.

The use of green hydrogen could either be the keystone of a low-carbon future of oil and gas or else a distraction from the real solutions.

The potentials of hydrogen

Hydrogen is a colourless gas that comes coded in the most colourful ways. Brown and grey hydrogen is produced either by industrial chemicals or gasification of coal and lignite. Brown and grey hydrogen consequently adds to problems of carbon emissions.

A cleaner option is blue hydrogen. Here the gas is produced using methane reformation, with emissions curtailed by carbon capture and storage. This process halves the carbon produced but raises more significant concerns about methane emissions, which are thought to be more damaging to the environment.

Green hydrogen could eliminate emissions using renewable energy rather than steam methane reforming (SMR) to power electrolysis. This green hydrogen is no longer a speculative tech in oil and gas production, as companies such as Shell and ITM Power are building a hydrogen electrolysis plant in Germany. It is going to be the world’s largest plant, and revenue will come from selling hydrogen to refineries. All the world has needed to make green hydrogen a reality is a lot of water and a massive electrolyzer, which are now coming online.

Indeed, hydrogen has not been the solution to decarbonisation to date because of the cost of production in the past. Now, however, hydrogen production through electrolysis is both more technically advanced and more economically viable. As Bloomberg New Energy Finance claims, by 2050 the cost of hydrogen could be cheaper by almost two thirds.

Is there a “but”?

Hydrogen is far from the ideal fuel. It is low in density and is therefore hard to store and transport. There are also safety concerns, as hydrogen is highly flammable and can lead to significant explosions and fires.

However, green hydrogen has been widely used by industry for years, and so many of the technical issues of storage and transportation are considered resolved. Add to this the opportunity that green hydrogen offers for a carbon-free future, and it is hard to see it as anything other than a significant opportunity.

Several major oil and gas companies are looking to take the lead in green hydrogen production. Shell Nederland has partnered with Eneco for a wind farm off the Dutch coast. Equally, Lightsource BP has plans for a green hydrogen plan in Australia in development.

The genuine question is still one of viability in the short term. Green hydrogen is still three times more expensive than SMR produced Blue Hydrogen. Tech may evolve so that electrolyzers are cheaper to bring online in the longer term. However, it will require far-sighted executives in oil and gas to commit to decarbonisation wholeheartedly in this way. Will they do this if blue hydrogen is accepted as a viable alternative?

Ex~i Flow’s SFC3000 flow computer can support hydrogen flow measurement. Contact us today to learn more about our flow computer and its place in the future of decarbonization.