Natural Hydrogen as a Mineral Resource
What’s occurring in the hydrogen generation sector, and why is hydrogen increasingly referred to as a novel mineral with underground origins?
Several recent scientific articles indicate the actual existence of geological hydrogen, prompting certain countries’ governments to grant licenses for hydrogen geological surveys.
As long-term investors and hydrogen technology researchers, we aim to elucidate the processes behind the emergence of hydrogen within geological formations and explore methods for its storage and production.
Hydrogen palette
Traditionally, various colors are utilized to distinguish between different types of hydrogen:
Gray hydrogen originates from fossil fuels (oil and gas), releasing CO2 and contributing to global warming through steam methane reforming.
Brown hydrogen is derived from coal and also emits CO2, thus contributing to global warming.
Blue hydrogen, akin to gray and brown hydrogen, involves capturing and storing CO2 through Carbon Capture, Utilization, and Storage (CCUS) methods.
Green hydrogen is generated without carbon emissions, utilizing renewable or nuclear electricity (also known as pink hydrogen) to electrolyze water.
Turquoise hydrogen employs methane pyrolysis to produce hydrogen and solid carbon. While a promising concept, its feasibility on a large scale is yet to be demonstrated.
Gold hydrogen is extracted from natural underground deposits.
Orange hydrogen is produced by injecting water into deep source rocks.
Additional information regarding the various types of hydrogen can be found at the provided link.
This article aims to explore recent breakthroughs in underground hydrogen production, focusing on “Golden hydrogen” and a cutting-edge method that which we believe can surpass team methane reforming (gray hydrogen) in terms of ease of extraction, cost of hydrogen and environmental benefits.
Underground steam methane reforming — is it possible?
As of now, steam methane reforming (SMR) is considered the most cost-effective ($0.90–3.20 per kg) and well-established method for hydrogen production. According to the IEA’s Global Hydrogen Review 2023, SMR without CCUS accounted for 62% of global hydrogen production in 2022, whereas SMR with CCUS represented only 0.6%. However, SMR without CCU significantly contributes to environmental emissions, with CO2 levels reaching 10kg per 1kg of produced hydrogen.
Technically, SMR involves converting methane (the primary component of natural gas) using water steam and solid catalysts to produce hydrogen and carbon oxide. This process occurs at high temperatures (typically between 700–1100 degrees Celsius) and pressures (usually in the range of 20–30 atmospheres), facilitating chemical reactions. Solid catalysts, commonly made of nickel, activate methane decomposition reactions into hydrogen and carbon dioxide.
CH4 + H2O → CO + 3H2
CO + H2O → CO2 + H2
These reactions serve as the foundation for hydrogen production, resulting in the release of CO2 as a byproduct.
Technology startups such as Proton Energy and Hydrogen Source offer solutions that relocate hydrogen generation to oil and reservoir rocks. They leverage two industry-proven technologies: steam methane reforming (SMR) and in-situ combustion, commonly used worldwide for heavy hydrocarbon production.
Hydrogen Source’s patented process introduces a novel method for producing clean, affordable, and pure H2 directly from gas wells.
By applying in-situ combustion to gas fields, the SMR process can be conducted directly within the hydrocarbon reservoir. This transforms the gas reservoir into a high-pressure hydrogen storage cell with carbon capture, utilization, and storage (CCUS) capabilities automatically. Such technology represents a clean source of hydrogen.
The process involves injecting a liquid catalyst (typically nickel-based), air, and water steam in predetermined proportions through injection wells to initiate in-situ hydrogen generation. The presence of methane, water steam, and catalyst at specific temperatures enhances the hydrogen generation processes within the reservoir. The produced hydrogen is then extracted from production wells, while the generated CO2 either remains in the reservoir or undergoes further reactions. Production wells can be equipped with hydrogen-selective membranes, or purification units can be installed on the surface to achieve industry-standard purity levels ranging from 99.95% to 99.98%.
Proton Energy’s technology is deployed within oil reservoirs and involves an in-situ oil combustion process, followed by coke gasification and a water gas shift reaction, alongside the injection of air and water steam.
As previously mentioned, hydrogen generation is achieved through the primary chemical reactions of steam reforming of methane and a water gas shift reaction. Here’s how they operate:
- Water Gas Shift Reaction: CO + H2O = CO2 + H2 + 41 kj — an exothermic reaction. This reaction exhibits almost complete conversion of CO to H2 and initiates at 200 ºC, with an active process temperature range of 350–550 ºC (1st stage) and 200–250 ºC (2nd stage).
- Steam Methane Reforming: CH4 + H2O = CO + 3H2–206.1 kj — an endothermic reaction. This reaction yields synthesis gas with high H2 content. The generated CO also undergoes conversion to H2 via the water gas shift reaction. The reaction commences at 300 ºC, with an active process temperature range of 800–900 ºC.
- Carbon Dioxide Conversion of Methane: The generated CO2 can further react with CH4 via carbon dioxide conversion of methane. CH4 + CO2 = 2CO + 2H2–248.3 kj — another endothermic reaction. This leads to synthesis gas generation. The reaction starts at 400 ºC, with an active process temperature range of 700–800 ºC.
The released CO2 either accumulates in the reservoir or undergoes further reaction with CH4.
The projected cost range for this type of hydrogen is estimated to be below $0.5 per kg at scale. Additionally, in some instances, depleted oil and gas deposits could find a second economically viable life. There may be no need to drill new wells, as existing ones could be retrofitted for hydrogen production.
Our primary concerns associated with these technologies include:
1. The cost and quantity of catalyst utilized to enhance the in-situ reaction. Unlike traditional SMR, which employs a solid nickel-based catalyst that remains intact and can be recycled with the generated hydrogen, the liquid nickel-based catalyst injected into the reservoir remains there without the possibility of being upgraded or returned to the surface for reuse.
2. The practical implementation of methane combustion in a gas well. As SMR requires high temperatures (700–1100°C), it remains unclear how to achieve such temperatures within the reservoir.
3. The complexity of controlling the in-situ oil combustion process, which necessitates additional surface equipment to maintain continuous operation.
4. The corrosive and volatile nature of hydrogen gas, requiring high-integrity wells to transport hydrogen to the surface without leaks.
5. The accuracy of all cost projections for hydrogen output is heavily contingent upon the aforementioned complexities, which remain inadequately verified.
How natural hydrogen forms underground
Surprisingly, it’s feasible to extract hydrogen directly from wells similar to those used for natural gas extraction, introducing a new variant known as “Golden hydrogen”.
A recent 2023 Science article introduces the concept of Golden hydrogen. The underlying principle suggests that hydrogen is generated through reactions between water and rocks rich in radioactivity or iron deep within the Earth. This hydrogen then migrates upwards through the crust and sometimes accumulates in underground reservoirs.
While the formation of oil and gas typically requires extensive transformation of organic matter over many years, geological hydrogen may renew continuously through the ongoing generation from water.
According to an October 2022 presentation by the U.S. Geological Survey (USGS), this source of hydrogen might be substantial enough to satisfy global demand.
The Earth-Science Reviews 2020 article outlines several potential origins of geological hydrogen:
1. Radiolysis: Radioactive elements present in rocks emit radiation capable of splitting water molecules. The decay of elements like uranium and thorium in the Earth’s crust releases alpha particles and other radiation, leading to the production of hydrogen underground.
2. Serpentinization: At elevated temperatures, water reacts with iron-rich rocks to produce hydrogen. This process involves the oxidation of iron, which seizes oxygen atoms from water molecules and releases hydrogen. Under conditions where minerals like olivine are buried deeply enough to maintain temperatures exceeding 200°C and are exposed to surface water percolation, hydrogen production can occur rapidly. Renewable reactions may drive a significant portion of natural hydrogen production.
Australia is actively investigating this field, benefitting from favorable geological conditions. The region is covered by the ancient Gawler Craton, and the presence of iron and uranium mines suggests the existence of source rocks crucial for both serpentinization and radiolysis processes.
3. Deep-seated Hydrogen: Streams of hydrogen originating from Earth’s core or mantle may ascend along tectonic plate boundaries and faults. However, the existence of these extensive, deep hydrogen reservoirs remains a topic of debate.
Similar to oil and gas, hydrogen, once generated, accumulates in various reservoir rocks capped with impermeable formations such as salt formations. Subsequently, it needs to be brought to the surface, with drilling serving as a potential solution through various methods and locations.
- Traps: Direct drilling into hydrogen traps.
- Direct: Tapping into iron-rich source rocks directly, provided they are shallow and fractured enough to facilitate hydrogen collection.
- Enhanced: Stimulating hydrogen production by injecting water into iron-rich rocks.
Hydrogen seeps have been documented globally, characterized by hundreds of thousands of shallow, circular depressions in the land, ranging from tens to hundreds of meters across, known by various names such as circumments, witch rings, or water basins.
In places where natural hydrogen flows outlets, soil, grass and tree vegetation degrade within 5–10 years. Circumments are formed.
Natural hydrogen is already produced today.
Evidence of geological hydrogen exists in the Mali case. Twenty-four other hydrogen wells in Mali have confirmed the presence of natural H2, with one well specifically generating hydrogen to power a village streetlight. Despite this, commercial utilization remains distant, although production costs for natural hydrogen are estimated at $1.0–0.5 per kg.
In Spain, Helios Aragon is awaiting regulatory advancements. The company is encouraged by data from the Monzon-1 well drilled in 1963, indicating a 25% hydrogen content. Munro, the company’s representative, sees potential in the Pyrenees, where iron-rich marine rocks offer an ideal setting for hydrogen production. Plans for an exploratory well in 2024 are in place. However, commercial production is on hold pending an exemption for hydrogen operations, as mandated by a 2021 climate law.
Several companies in the USA have already drilled wells for geological H2, including HyTerra with two projects and Natural Hydrogen Energy, which successfully drilled a hydrogen well in 2019.
In the USA, two regions show potential for significant hydrogen reserves. Off the Eastern Seaboard, iron-rich mantle rocks could produce hydrogen migrating toward the shore. In the Midwest, a failed volcanic rift has brought iron-rich rocks close to the surface, making it another hotspot. In Nebraska, Natural Hydrogen Energy’s 2019 well is strategically positioned near deep faults connected to the rocks of the failed rift zone, indicating significant hydrogen production potential. Preliminary data also suggests proven reserves of natural hydrogen in Russia.
Instead of conclusion
In this post, I attempted to showcase several cutting-edge technologies for extracting hydrogen directly from a well.
The relocation of SMR into the reservoir is an intriguing technology that has the potential to convert old and depleted oil and gas wells for hydrogen extraction. SMR is initiated by igniting and sustaining combustion within the reservoir and is associated with high complexities in maintaining and controlling the combustion process that could bury the hope of low hydrogen costs even at scale.
The possibility of extracting hydrogen directly (without SMR) from a well sounds fantastical. However, we see scientific justifications and even the first real examples of hydrogen wells. With a high probability, as the industry scales up, it will encounter a long list of operational challenges associated with the characteristics of hydrogen, such as its volatility and flammability.
Given the possibility of direct hydrogen production using existing methods, it can be assumed that the cost of hydrogen production as it is scaled up can fall to less than $0.5 per kg, which is substantially less than the goals set by the U.S. Department of Energy.
What inspires most in this technology is that hydrogen (unlike conventional hydrocarbons) can relatively quickly accumulate naturally in the well again, which could potentially enhance the economic viability of extraction projects.
We are at the starting point of a potential new trend in mineral extraction.
