It’s Time to Pay Attention to Turquoise Hydrogen
Recent breakthroughs and early commercialization make it clear that it’s time to pay attention to turquoise hydrogen. First, however – what is turquoise hydrogen?
Turquoise hydrogen is a type of carbon-neutral hydrogen produced from natural gas through a process known as pyrolysis, or a process that decomposes through the use of high temperatures. Natural gas is cooked at 900 degrees until it breaks down into solid carbon and hydrogen. That hydrogen is then used for everything from home heating to power generation, to industrial processes, to ammonium fertilizer production. But what happens to the carbon?
The carbon, also called synthetic graphite or carbon black, is a solid and therefore does not contribute to greenhouse gas emissions and does not need to be injected into underground storage. This solid carbon has a variety of industrial applications. It’s used in products including but not limited to printer ink, tires, steel production, hydrogen fuel cells and fabrication of devices like batteries and solar panels. In other words, production of turquoise hydrogen indirectly makes it cheaper to produce other types of renewable energy while directly providing reliable, affordable and dispatchable zero-carbon energy. It could also potentially lower the carbon footprint of solar panel production, as the synthetic graphite currently used for this process is largely produced via heat treatment of petroleum coke, coal-tar pitch, or oil.
Turquoise hydrogen isn’t just affordable – it’s a bargain to produce. Let’s break down the economics of turquoise hydrogen. The main ingredient is natural gas. America’s massive reserves of natural gas (an astounding 3,368 trillion cubic feet of technically recoverable gas, not counting RNG production) combined with uniquely innovative production methods have gifted the United States the lowest energy costs in the developed world. The EIA projects that natural gas will remain between half and a third the cost of other energy sources through 2050, meaning that feedstock costs for turquoise hydrogen will remain low.
The next key financial aspect is tax credits. The Inflation Reduction Act offers tax credits of up to $3 per kilogram of carbon-neutral hydrogen produced. Incredibly, once natural gas costs and pyrolysis costs are factored in, the production cost of turquoise hydrogen can be negative in many parts of the country.
Finally, hydrogen is valuable, as is the synthetic graphite byproduct, which sells for approximately $1,000 per metric ton. The profit incentive to quickly ramp up the production of turquoise hydrogen speaks for itself.
Natural gas utilities know how to transport hydrogen. The fuel mix used by Hawai’i Gas currently is approximately 50 percent hydrogen. However, in many cases, they might not need to transport turquoise hydrogen at all. Pyrolysis allows turquoise hydrogen to be produced on-site for large industrial customers by using natural gas transported by the existing network without any alterations, neatly sidestepping one of the current potential slowdowns for large-scale adoption of hydrogen.
The potential for decarbonization of heavy industry, which is currently about 17 percent of U.S. emissions, is tremendous. Today, approximately 70 percent of global steel manufacturing requires coal. However, recent innovations have enabled hydrogen to be substituted for coal. Hydrogen and synthetic graphite, both produced on-site at heavy industry facilities, offer the potential for a transformative shift towards lower emissions in heavy industry, but only for facilities connected to the natural gas distribution system.
Decreasing emissions from home heating and other home energy use (albeit only 7 percent of U.S. emissions) is similarly promising. Today, high-efficiency natural gas homes can have emissions 11 percent lower than homes with advanced air-source heat pumps and 22 percent lower than those with cold-climate heat pumps. The blending of turquoise, blue and green hydrogen into the energy mix has the potential to decrease these emissions even further, as does the use of innovative high-efficiency appliances like gas heat pumps – again, only for homes connected to the natural gas distribution system.
Power generation, currently responsible for more than 40 percent of U.S. emissions, is another area where turquoise hydrogen could make a tremendous difference. Because hydrogen combustion is carbon neutral, existing power plants retrofitted for hydrogen or hydrogen blends could swiftly decrease emissions. As you may have guessed, this comes with one caveat – the power plants need to be connected to the natural gas distribution system.
What about transportation and its 38 percent of U.S. emissions? While less discussed than electrical vehicles, buses with hydrogen fuel cells are increasing in popularity. Boeing sees hydrogen as a promising alternative fuel for aviation. Japan recently launched the world’s first hydrogen-powered ship, and Toyota has bet big on commercializing hydrogen fuel cells for cars. Hydrogen is certainly one possible way to mitigate bottlenecks in increasing power production and transmission, as well as the slow rollout of charging stations for electric vehicles. Of course, for this to work, the local area, port or airport would have to be on a natural gas distribution system.
Finally, turquoise hydrogen has the potential to help lower carbon emissions from agriculture, currently responsible for around 11.2 percent of U.S. emissions. By harvesting RNG from agriculture and using it for turquoise hydrogen production, our energy system could help to decrease emissions from another sector of the economy, as long as it can be transported by the natural gas distribution system.
There are few areas of the economy where carbon-neutral or low-carbon hydrogen, whether turquoise, green, or blue, could not help to lower emissions. Thanks to the startlingly low production cost, it could do this while potentially even lowering energy prices for customers. States and cities alike should keep this in mind when deciding whether to risk locking themselves into higher emissions, higher energy costs, and lower reliability by banning the infrastructure needed to enable them to take full advantage of these innovations. Residents of the 24 states (and counting) that have passed energy choice legislation will have access to this affordable and environmentally friendly new fuel. Will you?