Tomorrow's Energy: Hydrogen, Fuel Cells, and the Prospects for a Cleaner Planet by Peter Hoffmann

As we have read in Vaclav Smil's two recent books (1, 2), and physicist Tom Murphy's work, our industrial civilization and current standard of living depend on cheap - meaning high EROEI - sources of energy. Without cheap energy, we would experience a collapse in our standard of living.

So the first question to think about is whether energy is going to stay cheap or get more expensive. We first noticed a decade ago that there was something wrong with the fracking boom:

The failure of GMX Resources - which was close enough to the core of the Bakken that they did produce oil and plausibly claimed to have economic acreage - was something of an alarm bell that tight oil supplies may not be the panacea we thought.

The second question is, if petroleum is becoming scarcer, can anything replace it? The "killer app" for petroleum which would most urgently need to be replaced is transportation fuel. One idea to replace gasoline powered ICE transportation would be with hydrogen fueled vehicles. We know that you can use solar, wind, or nuclear energy to make "renewable" hydrogen via electrolysis, or turn coal into hydrogen, and use it to power cars. 

We just read Tomorrow's Energy: Hydrogen, Fuel Cells, and the Prospects for a Cleaner Planet to see what it has to say about this. Note that this book is older (2012), but there has been very little progress because electric batteries have been the focus of the past decade. Some highlights:

• If hydrogen's benefits as a fuel are so great, the average person might reasonably ask why it did not make significant inroads into our energy systems years or even decades ago. [...] Hydrogen's principal advantage over conventional fuels is that it is emission free. That, by itself, was not thought to merit a society-wide switch to alternatives of any sort. Fossil fuels were cheap, and hydrogen was as much as several times more expensive.
• In 1923, when he was in his late twenties, [J.B.S.] Haldane gave a famous lecture at Cambridge University in which he said that hydrogen - derived from wind power via electrolysis, liquefied, and stored - would be the fuel of the future. [H]aldane said, "Liquid hydrogen is weight for weight the most efficient known method of storing energy, as it gives about three times as much heat per pound as petrol. 
• The industrial standby of hydrogen production, steam reforming of natural gas, continues to be the most economical method of choice widely used in the petrochemical and other industries, and there have been significant improvements over the years. But most hydrogen supporters regard it as an interim or bridge production technology on the road to renewable energy-based methods.
• Electrolysis is a proven method for making hydrogen and oxygen on an industrial scale. However, it has been used to a significant extent only in places where electricity is very cheap, such as Canada and Norway, with their vast hydropower resources. For a long time, making hydrogen the electrolytic way was considered economically justifiable only when it was to be used as a high-value chemical feedstock and only when high purity was required.
• The amount of energy needed to decompose water into hydrogen and oxygen by electrolysis is, in theory, exactly the amount of energy given off in the reverse process, in which hydrogen burns and recombines with oxygen into water vapor. In practice, there are losses in both electrolyzers and fuel cells; it takes more energy to split water than can be retrieved by combining the resulting hydrogen and oxygen in a fuel cell. A completely efficient electrolysis cell would require 94 kWh to make 1,000 cubic feet of gaseous hydrogen. Not all the energy need be supplied as expensive electricity, only 79 kWh. The rest can be brought into the process as simple heat, a less sophisticated and less costly form of energy...
• In the pecking order of ease in making hydrogen from fossil fuels, methane, the main ingredient in natural gas, occupies the top spot because it has usually been cheap. It is easier to handle industrially than a liquid (such as crude oil) or a solid (such as oil shale or coal). It also contains the most hydrogen: four hydrogen atoms for each carbon atom. Next comes petroleum, with a hydrogen-to-carbon ratio of 1.5 to 1.6. Oil shale has a ratio of 1.6, but it is solid and therefore more difficult to handle than petroleum. Coal, posing the greatest difficulties for hydrogen extraction, has ratios ranging from 0.72 to 0.92.

We used to think the only problem with hydrogen fueled cars would be creating the hydrogen. But storing and using the hydrogen inside of vehicles is not simple either. Having individual consumers pump cryogenic hydrogen is out of the question, so the fuel either needs to be gaseous (compressed) hydrogen or else the hydrogen needs to be converted into a liquid fuel. If you burn the hydrogen in an engine, you get the big efficiency losses that entails. Otherwise you can use a fuel cell. Highlights:

• The difficulty lies in how to carry hydrogen onboard a vehicle. In gasoline or diesel powered cars, storing conventional liquid fuel is easy. [...] With hydrogen, the situation is more complicated. In its ambient state, hydrogen is a gas. For efficient storage, it must be compressed like natural gas, cooled into a cryogenic state, bound within the structure of a hydride, or put into some other form (e.g. a slurry). All of these are difficult or have engineering or economic drawbacks (or both), especially on a space-constrained passenger car. Carmakers have wrestled with this for decades and are still at it.
• In the 1970s, when people first thought about using hydrogen as fuel for cars and trucks, many assumed that heavy steel-walled pressure bottles, similar to those used in welding, would be used to store the fuel on board. Such bottles are simple, but their weight would be prohibitive. The late Larry Williams of Martin Marietta Aerospace once calculated that a conventionally constructed steel pressure tank capable of holding roughly the same amount of energy as the fuel tank of a standard-size car would have to weigh about 3,400 pounds, would require a pressure of 800 atmospheres, and would have to have steel walls almost 3 inches thick.
• The benchmark for efficient onboard energy storage is still gasoline. Because it's a liquid, something consumers are familiar with, methanol was championed for a while by some experts as a logical hydrogen "carrier" and cleaner successor to gasoline. The average tank, full of gas, weighs about 110 pounds. A tank full of methanol would weigh about the same, but would give only about half the range. 
• Methanol is closest to hydrogen in terms of environmental cleanliness. It has only one carbon atom in its structure. It has been described as two molecules of hydrogen gas made liquid by one molecule of carbon dioxide. [...] One of its chief drawbacks that in the past has precluded its wide use in internal combustion engines is its low energy content. Per unit volume, it has only a little more than half the energy content of gasoline - 64,700 Btu per gallon versus 120,000 for gasoline: a methanol-fueled car gets only 55 to 60 percent of the mileage of a conventional internal combustion engine car. Another big drawback that had a lot of people worried was that methanol is toxic.
• [Hopes for fuel cells] began to fade when technical difficulties became apparent to the fuel cell community in the late 1960s and early 1970s. Coupled to a parallel slowdown in aerospace programs, these obstacles almost led to the demise of fuel cell development for terrestrial applications. Appleby and Foulkes list four major problems: (1) Hydrogen was the only useful nonexotic fuel, but using it with relatively inexpensive nickel catalysts in an alkaline fuel cell required high temperatures and pressures, costly pressure vessels, and ancillary equipment. (2) Alkaline fuel cells required pure hydrogen. That was problematic when hydrogen was produced from common fuels such as natural gas or coal. Any residual CO2 in the hydrogen reacts with the liquid alkaline electrolyte, gumming up the electrodes' microscopic pores and slowing the overall chemical reactions. (3) The use of 'dirty' commercial fuels plus CO2-containing air - as opposed to pure hydrogen and pure oxygen used on spacecraft - made the useful life of fuel systems (using construction materials commercially available at the time) too short for economical operation. (4) It became clear that the closely knit community of fuel cell designers, engineers, and scientists had 'tended to oversell the merits of the fuel cell before really having come to terms with all the teething troubles of an immature technology.'
  

The cost of "renewable" energy technologies like solar, wind, and batteries was falling because we were in a commodity bear market (2008-2020) with the necessary materials being sold below the long run sustaining cost of production. If someone had actually disrupted gasoline/ICE vehicles, or fossil fuels, you would have heard about it by now.

There is nothing better than petroleum for transportation fuel. (Nuclear is better than fossil fuels for generating electricity, but that doesn't work for transportation without better batteries.) That means we are probably going to be using it for a long time - probably until it is exhausted.

Royalty trusts are yielding 15% and the EV/FCF on Canadian oil producers is north of 20% while Biden is dumping a million barrels a day oil from the SPR and the industry is drawing down its backlog of drilled uncompleted wells.

This is perhaps the greatest mispricing we have seen since we started this blog.

3/5.