Will white hydrogen help the energy transition?

US start-up Koloma has raised $91m to support its expansion in the mining of naturally-occurring 'white' hydrogen. We look at whether this technology is about to hit the mainstream, and ask whether it will upend the business models of green hydrogen players.

  • US start-up Koloma was formed in 2021 and has now raised $91m
  • The firm is looking to grow in the emerging 'white' hydrogen sector
  • Its proponents claim that it would be cheaper than 'green' hydrogen

Developers and investors are expending lots of effort and money to build projects that can use renewable energy to produce hydrogen in a cost-effective way.

But is the green hydrogen sector about to be overtaken by ‘white’ hydrogen?

That is the hope of US start-up Koloma, which was founded in 2021 and last month announced it has raised $91m from backers such as Breakthrough Energy Ventures, Energy Impact Partners, Evok Innovations, Piva Capital and Prelude Ventures. The company plans to use the funds to support its plans to tap into the hydrogen that is produced naturally in the Earth’s crust. It said it has 16 patents for technologies that are focused on finding and extracting this hydrogen.

Tom Darragh, co-founder and chief technology officer at Koloma, has said this ‘white’ hydrogen is found on every continent at a “profound” scale. The company is now working to identify sites in the US where it could extract this hydrogen.

So far, this sounds like it could be a conventional business model in the fossil fuels sector, where oil and gas are extracted from the Earth and, eventually, depleted. But that is where scientists claim that ‘white’ hydrogen is different from oil and gas.

Oil and gas are produced very slowly over millions of years, while scientists say that hydrogen is continuously produced in the underground when water reacts with iron minerals at high temperatures and pressures, in a process called ‘serpentinisation’. This hydrogen percolates up through the crust accumulates in underground traps, which firms such as Koloma are looking to access. A US Geological Survey model said ‘white’ hydrogen could meet global hydrogen demand for thousands of years.

This also means ‘white’ hydrogen could be seen as a renewable resource, because it renews. But it is not ‘renewable’ in the same way as wind, solar or hydro, where the electricity is a by-product of the wind blowing, sun shining or water flowing. For example, companies that drilled boreholes in Mali, Africa, in 2012 have reported no fall in production; and ‘white’ hydrogen was first discovered in Mali in 1987.

Its proponents say it has another advantage over green hydrogen: cost. It is being hailed as a cheap solution for carbon-neutral hydrogen production and can leverage the exploration and extraction expertise of companies in the oil and gas sector. It is little wonder that countries including Australia, France and Spain are excited when it is reported that there could be vast stores of hydrogen under their people’s feet.

Utility interest

But while Koloma’s fundraising has been announced with great fanfare, it is not the first company that is looking to gain a headstart in ‘white’ hydrogen, which is also known as 'natural' hydrogen - and even 'gold' hydrogen in some quarters.

The best-known to commit to natural hydrogen is Engie, which started exploring the potential for the fuel in Brazil in 2016 and has now broadened its research into other parts of the world. Meanwhile, HyTerra and Natural Hydrogen Energy are working on an exploration well near Geneva in US state Nebraska; and companies including the Australian firms Gold Hydrogen are bidding for exploration rights in South Australia.

We are yet to see many big names commit to ‘white’ hydrogen, but we would expect that to change if it is proven that this hydrogen can be extracted cheaply; and if the demand for hydrogen keeps growing in early-adopting industries, including fertiliser production, industrial processes and transportation. Growing demand for hydrogen is an obstacle for producers of hydrogen of all colours in the current market.

In addition, we expect to see more scrutiny in the coming years about the downsides of ‘white’ hydrogen, such as the potential impacts – noise, disruption, and potential contamination – of drilling wells to extract it at industrial scale. Proponents of natural hydrogen said the impacts of this form of hydrogen extraction would be less severe than the environmental impacts of most energy sources, because they wouldn’t need to run a process to make hydrogen. Rather, they would be extracting and purifying it.

If we have a reservation at this stage it is that, frankly, all of this sounds too good to be true. A continuously-regenerating and plentiful fuel that can be extracted cheaply, with little disruption to communities and only minimal environmental impacts? It could be a boon for the energy transition but, for now, it sounds too ‘whiter than white’.

Let’s see if it can live up to these lofty promises.

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