THERE is great uncertainty as to how oil and gas companies will adapt to the hydrogen era given there are many synergies but a move to carbon-free gas, transport and heating will also ultimately hasten the end of the fossil fuel era.

A comprehensive report from AllianceBernstein this week notes that only certain companies will adapt, and among those globally are Australia's Woodside Petroleum and Santos.  

It sees Equior as the most progressive, but notes Shell, BP and China's Sinopec have announced hydrogen strategies also.  

However, hydrogen will have no impact on near term earnings, it says.  

Woodside has made a series of recent hydrogen investments including fuel cell charging stations in South Korea and green ammonia, which can be used as a carrier of green hydrogen as an alternative to liquefaction -- which occurs at a far cooler -260 compared with natural gas' -160 - and Santos has a carbon capture and storage project and associated hydrogen plans. 

"Oil & gas companies, gas utilities, and automotive manufacturers are some of the industries most threatened by hydrogen. Those that embrace the energy transition may survive and even thrive, while those that do not risk being confined to history," it said.  

Overall hydrogen may finally play a major role in future decarbonisation after several false starts as costs fall and the cost of green hydrogen in particular -- which is made via using renewable energy to split water into its two components -- falls to US$2 per kilo and fuel cell costs to $30 per kilowatt from $200/kW now.  

"Investment in hydrogen will likely be enormous, but so will revenues, with over $1.2 trillion in annual revenue from hydrogen by 2050. Transport will likely be the most material at $350 billion, followed by industrial energy at $260 billion and building heating and power with $180 billion in revenues," it said. 

Source: Energy News Bulletin

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