Hydrogen is often considered a green energy source when it is produced using environmentally friendly methods and used in applications that produce little to no greenhouse gas emissions. This concept is often referred to as “green hydrogen.” Green hydrogen has the potential to play a significant role in the transition to a more sustainable and low-carbon energy system for several reasons: 

Clean Production: Green hydrogen is produced using renewable energy sources, such as wind, solar, or hydropower, to electrolyze water (H2O) into hydrogen (H2) and oxygen (O2). This process, known as electrolysis, generates hydrogen without producing harmful emissions if the electricity used for electrolysis is sourced from renewables. 

Reduced Carbon Footprint: Green hydrogen production avoids the carbon emissions associated with traditional hydrogen production methods, such as steam methane reforming (SMR) and coal gasification, which release significant amounts of carbon dioxide (CO2). 

Versatile Energy Carrier: Hydrogen can be used as an energy carrier for various applications, including electricity generation, transportation, and industrial processes. It can be stored and transported relatively easily, making it a flexible energy source. 

Decarbonizing Hard-to-Electrify Sectors: Hydrogen can be used in sectors that are difficult to electrify directly, such as heavy industry, long-haul transportation (e.g., trucks, ships, and trains), and certain chemical processes. By replacing fossil fuels with hydrogen in these sectors, emissions can be significantly reduced. 

Energy Storage: Hydrogen can be used for energy storage, helping to balance the intermittent nature of renewable energy sources. Excess electricity generated during times of high renewable energy production can be used for electrolysis to produce hydrogen, which can then be stored and converted back into electricity when needed. 

Zero Emission When Used: When green hydrogen is used in fuel cells or combustion processes, it produces no direct emissions, as the only byproduct is water vapor. 

However, it’s important to note that the greenness of hydrogen depends on how it is produced. Hydrogen can also be produced using fossil fuels (gray hydrogen) or with carbon capture and storage (blue hydrogen), which reduces emissions but does not eliminate them entirely. The environmental benefits of hydrogen depend on the source of energy used for production and the overall lifecycle emissions. 

Challenges associated with green hydrogen include the high cost of electrolysis technology, the need for significant renewable energy capacity to scale up production, and infrastructure development for storage and distribution.

Can Hydrogen be Produced Affordably?

The Inflation Reduction Act has earmarked clean hydrogen production in the $369 billion set aside for energy security and climate change initiatives.

As with any new industry, costs are usually high until technology improves and supply ramps up. According to an article in Newsweek, “The world’s largest producer of electrolyzers, NEL, believes green hydrogen production could reach cost parity with fossil fuels as early as 2025, and the DOE has laid out plans to reduce the cost of hydrogen to $1 per 1 kilogram within the next decade.”

How do Hydrogen-Powered Cars Work, and Who is Making them?

Hydrogen-powered cars, also known as hydrogen fuel cell vehicles (FCVs), work by using a chemical process to convert hydrogen gas (H2) into electricity to power an electric motor that drives the vehicle. Here’s how they work: 

Hydrogen Storage: Hydrogen gas is stored in high-pressure tanks or sometimes in liquid form, depending on the vehicle’s design. These tanks are typically located in the vehicle’s rear or undercarriage.

Fuel Cell Stack: The heart of a hydrogen-powered car is the fuel cell stack. The stack consists of multiple individual fuel cells, each of which contains a proton-exchange membrane (PEM) or other types of fuel cell technologies, such as alkaline or solid oxide fuel cells. 

Hydrogen Injection: Hydrogen from the storage tanks is delivered to the fuel cell stack. This hydrogen is typically very pure, as any impurities could damage the fuel cell. 

Electrochemical Reaction: Inside the fuel cell stack, a chemical reaction takes place. Hydrogen molecules are split into protons (H+) and electrons (e-) at the anode (negative electrode) through a process called hydrogen oxidation. The protons move through the proton-exchange membrane, while the electrons are forced to travel through an external circuit, creating an electrical current. 

Electricity Generation: The flow of electrons through the external circuit creates electrical power, which can be used to drive the electric motor of the vehicle. This motor provides propulsion to the wheels, allowing the car to move. 

Combining with Oxygen: The protons generated at the anode travel through the proton-exchange membrane to the cathode (positive electrode), where they combine with oxygen from the air, typically supplied through an intake, to form water (H2O). This chemical reaction generates additional heat and water vapor as byproducts. 

Emission: Zero Emissions: The only emissions produced by hydrogen fuel cell vehicles are water vapor and heat. There are no tailpipe emissions of harmful pollutants or greenhouse gases, making them environmentally friendly.

Energy Storage: If the vehicle has a hybrid configuration, it may also include a small battery pack for regenerative braking and temporary energy storage. This allows the vehicle to recover and store energy during braking and then release it to assist with acceleration.

One notable advantage of hydrogen fuel cell vehicles is that they offer longer driving ranges compared to many battery-electric vehicles (BEVs) due to the high energy density of hydrogen. However, there are several challenges to widespread adoption, including the limited availability of hydrogen refueling infrastructure, the energy required to produce and transport hydrogen, and the high cost of fuel cell technology.

Despite these challenges, hydrogen fuel cell vehicles are being developed and deployed by various automakers and governments, particularly in regions where hydrogen infrastructure is being developed to support their use.

Which Automakers are Developing Hydrogen-Powered Cars?

Hyundai N Vision74 (Image Source: Hyundai)

Hyndai just gave the green light for the production of the N Vision 74 Hydrogen-poweered sports care. This vehicle, designed for well-heeled  sports care enthusiasts, will carry an estimated price tag of $160,000 and have superior performance, acoording to MotorTrend.

Nikola plans to start delivering hydrogen fuel cell semi trucks within the next few weeks. Companies like J.B. Hunt and AJR Trucking are lined up to take deliveries. In testing, these trucks show a range averaging over 500 miles, according a report published in Teslarati.com.

Toyota and BMW also have hydrogen fuel-cell vehicle projects underway.

The post Is Hydrogen a Viable Green Energy Alternative? appeared first on Global Investment Daily.

It’s a script that has played out with numerous commodities including potash, graphite, cobalt, rare earths, vanadium, and even marijuana (though not strictly a commodity).

And it’s now playing out with helium, the second-most abundant element in the Universe behind only hydrogen, yet also one of the rarest elements on our planet.

Helium’s scarcity and value stems from the fact that it’s an inert gas that does readily react with other elements or much of it generated by earth’s natural processes. It’s also 7x lighter than air and readily leaks into space and eventually gets torn away by solar winds.

Each year, our planet generates about 3,000 tons of helium through radioactive decay deep in the bowels of the earth. Unfortunately, the vast majority leaks off into space, and the little that  is trapped in the atmosphere comes nowhere close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and under earth’s normal atmosphere). 

Indeed, the majority of our helium reserves are found in ancient shale formations. Helium is, therefore, regarded as a finite, non-renewable resource.

Yet, many investors have been sleeping on an unraveling helium boom, thanks to

explosive growth in the semiconductor and healthcare industries as well as space and quantum computing.

This rare gas is endowed with unique qualities that make it indispensable in many key applications including space exploration, rocketry, high-level scientific applications, in the medical industry for MRI scanners, fiber optics, electronics, telecommunications, superconductivity, underwater breathing, welding, cryogenic shielding, leak detection, and in lifting balloons. 

At a melting point of -261.1°C (-429°F), helium has the lowest melting point of any element, meaning there’s no substitute for the gas where ultra-low temperatures are required such as superconductors. For instance, the fastest train ever built, the SC MagLev, capable of speeds of more than 600 km per hour, uses liquid helium to cool the superconducting material, niobium‐titanium alloy, to 452 degrees Fahrenheit below zero.

According to ResearchAndMarkets, the global helium market is projected to reach US$18.2B in 2025, growing at a CAGR of 11.2% during the period 2021 to 2025 mainly driven by robust medical and consumer electronics demand. About 30% of the world’s helium supply goes into MRI scanners while another 20% goes into the manufacture of hard disks and semiconductors.

Meanwhile, Big Tech companies such as Google, Facebook, Amazon, and Netflix are heavy users of helium in their massive data centers.

With demand constantly outstripping supply and the federal government no longer freely selling helium, prices have skyrocketed, hitting $35 per liter in 2019, more than double an average of $14.60 per liter they commanded three years ago.

Helium Uses

Source: Helium One

No more helium from the Fed

The biggest chink in the helium supply chain is the fact that a large chunk of the supply is in the hands of the U.S. federal government.

Back in 1925 when helium-based airships seemed like they would become vital to national defense, the U.S. government created the Federal Helium Reserve (FHR) out of a giant, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, FHR collected as much helium as it could and essentially became the world’s strategic helium reserve supplying ~40% of the world’s needs.

Unfortunately, the FHR eventually ran into debt trouble to the tune of billions of dollars thanks to its habit of selling helium at well below market prices. In 1996, the U.S. government passed laws mandating FHR to sell off its reserves and close in 2021 in an effort to recoup its debts.

The Bureau of Land Management (BLM) has outlined the process and timeline by which the FHR will dispose of its remaining helium and helium assets.  BLM, which now manages the reserve, managed to sell off most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) by 2018 restricted for sale to only federal users, including universities that use helium for federally sponsored research. BLM held its last Crude Helium Auction in Amarillo, Texas, in 2019 with the price rising 135%, from $119/Mcf in 2018 to $280/Mcf in 2019. 

The sale of crude helium to private industry has been discontinued and the remaining stockpile is earmarked for Federal users only.

The sale deadline has since then been extended to 30 September 2022, but  privatization likely won’t be completed until at least 2023.

There are a ton of stocks to play in this space, including giant Exxon (NYSE:XOM), which produces about 25% of the world’s helium supply at its plant in LaBarge, Wyoming. Regeneron (NASDAQ:REGN) is also poised to become a major helium player, with South Africa’s first-ever liquid helium processing technology. And plenty of small-caps form some potentially juicy new entrants to this space. 

This is one to watch. It’s not about balloons anymore. 

The post Abundant Yet Rare: The Juicy Helium Paradox appeared first on Global Investment Daily.