A new report reveals that hydrogen has surged up the priority list of many oil and gas organizations, taking a primary position in the sector’s decarbonization efforts. 

 

A fifth (21 per cent) of senior oil and gas industry professionals say their organization is already actively entering the hydrogen market, according to a new report published by DNV GL, the technical advisor to the sector. The proportion intending to invest in the hydrogen economy doubled from 20 per cent to 42 per cent in the year leading up to the Coronavirus-induced oil price crash.  

 

Heading for Hydrogen draws on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives. The report suggests that recent shifts in the industry’s investment priorities are unlikely to affect the sector’s long-term efforts to reduce carbon emissions.

 

DNV GL found a significant rise in those reporting that their organization is actively adapting to a less carbon-intensive energy mix – up from 44 per cent for 2018 to 60 per cent for 2020. Carbon-free hydrogen production, transmission and distribution is now widely recognised as a central component to the oil and gas industry’s decarbonisation efforts.

 

“Hydrogen is in the spotlight as the energy transition moves at pace – and rightly so. But to realize its potential, both governments and industry will need to make bold decisions,” said Liv Hovem, CEO, DNV GL – Oil & Gas. “The challenge now is not in the ambition, but in changing the timeline: from hydrogen on the horizon, to hydrogen in our homes, businesses, and transport systems.”

 

More than half of respondents to DNV GL’s research in Asia-Pacific (56 per cent), the Middle East & North Africa (54 per cent) and Europe (53 per cent) agree that hydrogen will be a significant part of the energy mix within 10 years. North America (40 per cent) and Latin America (37 per cent) are only a little behind.

 

The success of a hydrogen energy economy is closely aligned with the future of natural gas, renewable energy, and carbon capture and storage (CCS) technology, according to Heading for Hydrogen.

 

While hydrogen gas produced from renewable energy (green hydrogen) is the industry’s ultimate destination, analysis shows that the sector can only realistically scale up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology (blue hydrogen). 

 

DNV GL’s 2019 Energy Transition Outlook, a forecast of world energy demand and supply, predicts that natural gas will become the world’s largest energy source in the mid-2020s, accounting for nearly 30 per cent of the global energy supply in 2050. Natural gas and hydrogen can play similar roles within the global energy system, and the synergies between them – in application and infrastructure – will drive the hydrogen economy.

 

However, Heading for Hydrogen points to political, economic, and technical complexity in scaling the hydrogen economy.

 

“To progress to the stage where societies and industry can enjoy the benefits of hydrogen at scale, all stakeholders will need immediate focus on proving safety, enabling infrastructure, scaling carbon capture and storage technology and incentivizing value chains through policy,” said Hovem. –-Tradearabia News Service