Natural hydrogen developer H2Au has been granted an operator licence by regulator the Kansas Corporation Commission, allowing it to accelerate work towards drilling and full-scale production in the US state.

The UK-based company’s acreage in Kansas includes joint leases with French firm 45-8 Energy, in directly adjacent blocks to recently successful natural (gold) hydrogen and helium drilling.

H2Au says it is in advanced talks with potential offtakers for gold hydrogen from its Kansas leases, as well as acreage it has in Iowa. Potential offtakers include nearby refineries and fertiliser manufacturers. There is also interest in using the hydrogen as feedstock for electricity generation to power datacentres.

Excitement over the potential for gold hydrogen has been building in recent months, in contrast to the darkening mood in the green hydrogen sector, where project cancellations, the retreat of key investors such as oil and gas major BP, and the scaling back of US federal government support have hit sentiment.

“As a zero-carbon energy source, unlocked by proven geoscience techniques, and delivered via established oil and gas supply chains, natural hydrogen has truly bipartisan appeal; bridging between the net zero and 'drill, baby, drill' lobbies,” said Owain Jackson, CEO of H2Au.

Gold rush

H2Au and 45-8 are not alone in their hunt for hydrogen in Kansas. A mini ‘gold rush’ is underway in the US state, with multiple companies prospecting for hydrogen and helium along the Midcontinent Rift.

One of the most active explorers is Australian firm HyTerra. The company drilled three wells back-to-back between April and July this year at the Nemaha project in Kansas, it said in an update to investors in early August.

“We calculate the energy content of this estimated recoverable amount of hydrogen to be roughly twice the amount of energy in all the proven natural gas reserves on Earth” Ellis and Gelman, USGS

HyTerra has reported hydrogen concentrations of 96% and has access to more than 3,000 acres close to the Interstate Highway (170), a major arterial route crossing the US. The exploration programme in Kansas is funded through an investment in HyTerra by Australia’s Fortescue Future Industries, one of the highest profile global developers of electrolytic hydrogen production.

Kansas is the hotspot for gold hydrogen, but projects are also underway in several other regions, including Australia and France. Pilot production in Mali has been underway for several years.

Areas of interest

Kansas is certainly high on the list of US states with gold hydrogen potential. “Areas of interest that have the potential to hold accumulations of geologic hydrogen include a midcontinent region that covers Kansas, Iowa, Minnesota and Michigan, the Four Corners states of Arizona, Colorado, New Mexico and Utah, the California coast, and areas along the Eastern seaboard,” said the US Geological Survey (USGS) in a recent study.

Globally, the potential is vast. “We calculate the energy content of this estimated recoverable amount of hydrogen to be roughly twice the amount of energy in all the proven natural gas reserves on Earth,” said USGS geologists Geoff Ellis and Sarah Gelman in a recent paper.

However, much of it is likely to be too deep, too far offshore or in accumulations too small to be economically recoverable, they added.

Gold hydrogen developers frequently tout the potential to produce at low costs, with claims that $1/kg is achievable. However, meaningfully comparing the economics of extracting gold hydrogen with those of producing green hydrogen via electrolysis is going to be challenging.

Still, ultra-low-cost gold hydrogen may not be out of reach if expertise from the oil and gas sector is applied to the task. H2Au was founded in 2022 by “FTSE 100 oil, gas, and mining exploration experts, with decades of experience in energy prospecting and production.”

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Author: Stuart Penson