Economies around the world are chasing decarbonization as they rally to lessen their environmental impact and reach net zero by 2050. And while oil and gas companies could see this drive as a threat, it’s actually an opportunity to be grasped with both hands.
That’s the view of Professor Emmanouil Kakaras, senior vice president and head of innovation and new products at Mitsubishi Hitachi Power Systems Europe. Among the reasons for this, he says, is that hydrogen is now widely regarded as a key fuel for both supporting renewables and decarbonizing “hard-to-abate” industries.
Here, he explains more about the promise of hydrogen for oil and gas.
- Why is the energy transition an opportunity rather than a threat for oil and gas companies?
- The changes ahead are actually opening up a much larger market to traditional oil, gas and power firms. As sectors like transport and industry move further into electrification, demand for electricity will grow across the globe. Much of this electricity will come from renewable sources, and hydrogen will enable a greater use of these renewables both as a form of storage and as a cleaner source of reliable power generation to complement variable renewables. Synthetic fuels, hydrogen, ammonia – these are the new commodities that will be traded globally.
- What role can oil and gas players have in the supply of hydrogen?
- We have already seen oil and gas majors transform into energy majors and include a power component in their portfolios. And hydrogen can complement their activities as they further diversify and move into the power (and other) sectors. They will need a fuel that can act as a bridge between oil and gas and sectors like the power market, and hydrogen can be that fuel. In the middle- to long-term these companies will all move into the hydrogen business in a big way.
- How do you see the relationship between natural gas and hydrogen as part of the energy transition?
- In Europe, we have a clear view of natural gas as a transition fuel, helping to lower CO2 emissions alongside renewables. Hydrogen offers the potential to repurpose natural gas power plants into assets with zero CO2 emissions. We are putting technologies in place that use natural gas today, but are hydrogen-ready to make use of the supply of hydrogen for power generation that we expect in the years to come.
- Hydrogen today is mainly produced using fossil fuels. Are CO2-free alternatives feasible?
- The straightforward solution is to decarbonize the conversion of natural gas to hydrogen by separating and capturing the CO2, which creates a carbon-free hydrogen we call blue hydrogen. And in areas with an excessive supply of renewables, electrolyzers can be used to avoid hydrocarbons altogether. Electrolysis – powered by wind or solar power – produces hydrogen from water, the so-called green hydrogen. It’s a question of regional distribution, and where we can achieve the most competitive solution in terms of the renewable energy supply or carbon storage. At the end of the day, both solutions will coexist. And it’s my opinion each of the technologies will have large-scale projects very soon in different regions of the world.
- What other energy breakthroughs will be critical to the world reaching net zero?
- Decarbonization will be key. This will happen not just through the use of renewables but also through the reduction or capture of CO2 itself, through carbon capture, utilization and storage technology. Storing carbon or converting it into chemicals or other materials will be important to decarbonizing sectors like industry or transport. So CO2 handling, CO2 utilization, and the direct-air capture of CO2 will support the energy transition. And there are the technologies that will help boost demand for and increase end use of hydrogen, like fuel cells, or our hydrogen gas turbines for energy production – after all, if we’re producing hydrogen we need to consume it.
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David Elliott is a writer and editor with more than 15 years’ experience. He’s worked across newspapers, magazines and corporate comms, writing about everything from motoring and finance to TV and film.