Unearthed today: Why oil companies want you to love hydrogen

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Back in 2017, 13 chief executives from firms including BP, Shell and Total headed to the Swiss ski resort of Davos for their annual talk & ski. On the sidelines, they teamed up to launch a new lobby-group. 

The Hydrogen Council was born, a cross-industry body which wants to “encourage key stakeholders to increase their backing of hydrogen as part of the future energy mix with appropriate policies and supporting schemes.” 

Since then hype has only grown alongside the ubiquitous childlike cartoons on Facebook (BP), and emoji laden tweets (Shell) is a serious push to drive billions in public money into the fuel of the future.

Whilst in the US the New York Times reported that oil majors turned to PR firm FTI consulting to set up “grassroots” groups to straightforwardly oppose climate action their European counterparts hired the same company to push the case for hydrogen. Here they are at the bottom of a press release launching the Hydrogen Council back in 2017.

According to a recent report by the watchdog group, The Corporate Europe Observatory (CEO), their work doesn’t come cheap. FTI’s entry on the EU’s transparency register lists the council as one of their biggest clients – just below Exxon – representing a turnover of between 7-800,000 euros. Whilst FTI registers spending hundreds of thousands of euros lobbying on behalf of its clients, the council’s itself registers less than 10k. 

FTI doesn’t just help with the Hydrogen Council. It managed the biggest Hydrogen lobby group formerly NEW-IG and now Hydrogen Europe, indeed they commissioned the new logo and are quite proud of their work. 

“NEW-IG will receive 40% more funds than in the previous period, totalling €1.3bn, and we were able to advise it throughout the entire process, from the initial impact assessment through to detailed negotiations and a public launch with industry CEOs and EU leaders,” an FTI document boasts

FTI told me “Hydrogen is an issue that we have worked on in Europe and globally for over a decade. We are public, proud and transparent about our work for the Hydrogen Council, which is set out clearly in the EU’s transparency register. That was also the case for our work with Hydrogen Europe (formerly NEW-IG) between 2009 and 2017. We hold ourselves to the highest professional and ethical standards of conduct and fully abide by the EU’s transparency register”.

After all, not everything, the oil industry and FTI consulting do together need be problematic. Bp argues that hydrogen has the potential to take over from gas as “the most convenient way to heat our homes and offices” whilst cutting emissions in the process.

The UK’s bp and Shell backed hydrogen task force has gone further, calling for 100% of our homes to be heated with hydrogen, someday. After all, it is the most abundant element on earth. Bp’s “zero-carbon city” partnership with Aberdeen also includes hydrogen for transport, power and – again – heat. What’s the problem here?

Not all Hydrogen is created equal. As yet another multi-coloured diagram from bp explains, hydrogen comes in different colours. Green – made by renewable electricity; blue – made by gas with (most) of the carbon dioxide buried somewhere and grey – made from gas with the carbon dioxide in the atmosphere. There are other colours too, let’s not go there.

When lobbyists talk about hydrogen to governments, they first like to talk about green hydrogen – because that’s the easiest sell. Blue hydrogen sounds ok in theory – but in practice, the residual emissions are enough to bust through carbon targets. 

But using green hydrogen to heat all of the UK’s homes is, as the UK’s chief advisor on climate change put it yesterday “not credible”

It would require, at the get-go, 30 times more offshore wind than we currently have – even before we electrify transport or phase out the rest of our fossil fuels. 

Even if that were possible, which it isn’t, making hydrogen from offshore wind at these volumes isn’t even likely to be especially cost-effective according to Micheal Lieberich at Bloomberg New Energy Finance.

As Liebreich went on to note, this is just a really inefficient way of heating our homes. Electric heating is “four times more efficient, using a fraction of the land footprint to generate their power supply.” What about industrial heat you (probably didn’t) say? Most of the time, the same applies. It’s a more expensive way of doing something you can do with electricity. 

Bp – for one – know you can’t meet the asks they are pushing for a hydrogen economy with fluffy green hydrogen alone. Indeed they promote hydrogen not as a form of renewable energy but instead as a way of “taking the pressure off” renewables. 

The latest bp energy outlook notes: “By 2050, there are broadly equal amounts of blue and green hydrogen in both scenarios,” says BP group chief economist Spencer Dale at the launch of Energy Outlook.

“Importantly, the production of blue hydrogen helps overall global supplies of hydrogen to grow relatively quickly without relying too heavily on renewable energy.” Enter blue hydrogen; helpfully made from bp’s core product, gas. 

Right now, it doesn’t exist. But if it did – Liebreich surmises – it’s likely to be no more efficient than it’s green sibling – or existing gas heating. Gas and electric heating already compete on price. Gas which has had the carbon dioxide removed, piped and then and buried and monitored indefinitely underground is always going to be way more expensive than just gas.  

Heating our homes this way could either divert billions of ‘climate funding’ into taxpayer subsidies to support the industry which produces it or drive fuel poverty and popular resentment against climate action or probably both; either way it would make it much harder to avoid catastrophic climate change. 

Blue Hydrogen is also not zero carbon. We don’t know yet – because nobody has made it at scale – but it’s likely only around 80-90% of the carbon can be economically captured and buried. Then there are the currently substantial emissions, e.g. methane leakage associated with the extraction of fossil fuels in the first place.

Dr David Joffe, the CCC’s head of carbon budgets, told Carbon Brief that there is room for some blue hydrogen within the UK’s net-zero target, but not the very large quantities that would be required to meet all potential demand in large-scale sectors, such as heating and transport. He says: “There is no specific threshold beyond which it is definitely not OK…[But] as you get closer to net-zero, those residual emissions really start to matter.”

And all that assumes blue hydrogen works out at this kind of scale, much of the hydrogen we use may not be clean at all. A plausible worst-case scenario for the planet – though not the oil industry – would simply see hydrogen of various types blended in small quantities into the gas grid. Just as adding biofuels to petrol served as an argument for delaying electric cars, so hydrogen may do the same for heating. 

And yet, just like biofuels before it, the hydrogen hype only builds. Consultants like FTI are experts at transforming hype into reality – a reality which risks diverting limited funds away from solutions which are more effective – and arguably more just. 

In the UK Boris Johnson wants to create the world’s first hydrogen powered town. In the EU there are suggestions hydrogen may receive support through the Renewables Directive – the same policy mechanism which for so long supported destructive biofuels.

Don’t get me wrong. Most analysts agree hydrogen may have a very important role to play in decarbonising the parts of the economy that other techs just can’t reach – and in providing a storage solution for renewable electricity. Liebreich sees it centred around industrial hubs fuelling chemical feedstocks and perhaps low-carbon steel or converted to provide a transport fuel where batteries don’t work. Carbon Brief goes into more – excellent – detail.

But that isn’t quite the story that is being spun – both by corporates, their lobby groups and friendly politicians. That story – which would see billions invested in a hydrogen-ready – economy would risk preparing us for a future that will not, and possibly can not, materialise whilst ignoring solutions which are more just and which already exist. It could provide billions in subsidies to energy companies – but little benefit for the planet.

Further reading:

In-depth Q&A: Does the world need hydrogen to solve climate change? (Carbon Brief)

Liebreich: Separating Hype from Hydrogen – Part One: The Supply Side (BNEF)

Liebreich: Separating Hype from Hydrogen – Part Two: The Demand Side (BNEF)

The Hydrogen Hype (Corporate Europe Observatory)