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Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

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Breakthrough In Hydrogen Cracking Could Create Clean Fuel

Breakthrough In Hydrogen Cracking Could Create Clean Fuel

Is this the first serious crack in high cost of hydrogen?

Hydrogen fuel cells have been one of the most exciting areas of green energy for a long time. After all, a vehicle that runs and produces water as its only output would be a great innovation. Yet, hydrogen fuel cells have remained a frustratingly difficult technology that has made little progress in become a serious power source in any major market.

Even with the backing of one of the biggest car companies on the planet, hydrogen fuel is still lagging far behind electric vehicles. This result is driven by a number of interconnected issues. Yet perhaps the most serious challenge for hydrogen-based power is the prohibitive cost associated with the technology.

Current hydrogen production methods are mostly not commercially viable. The most cost-efficient method for creating hydrogen used in industrial applications including fuel cells is steam hydrocarbon reforming. Related: Lithium: The Bright Spot For The Commodity Sector

This is a process where natural gas is treated with high temperature steam which in turn causes a chemical breakdown of the natural gas releasing hydrogen. Obviously this is not very green since natural gas is used, and it’s costly due to the poor efficiency of the process.

Other methods start with the gasification of low sulfur coal in an industrial furnace, and then chemically scrub the gas to extract hydrogen, along with carbon monoxide and carbon dioxide. These methods are reasonably effective for producing hydrogen at an acceptable price for use in industrial manufacturing, but they are not even close to cost competitive with gasoline or natural gas given energy production/cost trade-offs. Electrolysis can also be used to produce very pure hydrogen based on using electricity to chemically decompose water into hydrogen and oxygen. The problem here is that the method is very energy intensive and can end up using more energy than is actually created. Related: Strong Dollar, Warm Weather, Full Storage Keep Prices From Breaking Trend

Recently, a novel approach to the issue of hydrogen production has emerged out of Germany. Hydrogen can be extracted from many molecules, and one of these molecules is methane (CH4). Methane can be “cracked” using high temperatures to break the molecule down into its component parts of hydrogen and carbon. The German team built a reactor device which successfully cracked methane at temperatures of around 1200 degrees Celsius and showed a 78 percent conversion rate for hydrogen production over a two-week trial period.

This is a very big accomplishment. Methane cracking has been around for a while now, but it has never been a very useful technology for producing hydrogen because of low conversion rates and problems with most reactors. If the new reactor design can consistently improve the efficacy of hydrogen production from methane cracking, it’s likely that industrial hydrogen companies would take notice quickly. In addition, depending on the costs of input feedstock, and the conversion efficiency in large scale production, it could lead to the first viable production of cost effective hydrogen for transportation uses. Related: Will Goldman Be Right After All?

The German team showed that “methane cracking could achieve costs of 1.9 to 3.3 euros per kilogram of hydrogen at current German natural gas prices.” In the U.S., that price would likely be even lower, but the key is to make sure that the new reactor works reliably and consistently over time.

If the reactor runs into problems too often and maintenance issues start to crop up (like carbon clogging), then the technology won’t get past the starting gate. Methane cracking is a much greener technology approach than current standards like steam methane reforming or alternative methods of generating hydrogen. The new reactor then could be a very big deal from an environmental standpoint. There are a number of unanswered questions still remaining, but the most important one is can this trial be replicated by other facilities elsewhere in the world.

By Michael McDonald of Oilprice.com

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  • Ben H on December 21 2015 said:
    This article is seriously flawed. First talk trash about 'natural gas' and SMR for being not very efficient, and using natural gas, etc.

    But then talk about METHANE (natural gas) and talk about 'cracking it' (similar to SMR) and suddenly the natural gas is fine...

    Do you even know the difference?

    Here's a hint; high quality SMR is already at rates of 80% efficiency, much better than any other way to use methane.

    Hydro cracking is basically the same, except you have straight carbon as a by product instead of CO2. SMR has a perk that 50% of its hydrogen comes from water molecules, while the other 50% comes from methane. If the heat could be derived from solar thermal sources stored in molten salts, the efficiency could be over 100% 24/7 of the time.
  • Charles Purkess on December 21 2015 said:
    Not all electrolysis is the same, alkaline with PEM are v different.

    Worth you catching up on ITM Power's PEM electrolysers that efficiently harness surplus renewable energy to make hydrogen on site at the point of use.
    ITM Power (ITM.L) is integrating on-site production of its rapid response hydrogen generation systems on Shell forecourts in London, that provide a demand side load for grid balancing the supply/demand of the electricity grid. No fuel deliveries and a carbon free footprint. Referenced high efficiency from clients RWE and Thuga Group in Germany.
  • Alain M on December 23 2015 said:
    Ben I know the difference not much ;-) natural gas is basically the same except possibly lower yielding calorificly?

    That and the fact that natural gas probably has to go through less scrubbing to remove sulphur dioxide plus other corrosive and clogging impurities.
  • Alain M on December 23 2015 said:
    Hydrogen is a bastard to work with you only need look at acetylene to prove that.

    It doesn't like being pressurised and processes to extract it whether the air we be breath let alone electrolysis all has been the bain of it's existence why do you think the nuke programs back in the day cost so much HA! and they thought they would get of cheaply using H. It is to laugh says the taxpayer NOT.
  • Shawn Wachter on December 28 2015 said:
    The sulfur-iodine process is a commercially viable method that produces hydrgen, but no greenhouse gases. It uses water, rather than methane, as the feedstock.

    A high-temperature heat source (900 C) is required - typically this is provided by a Gen IV nuclear reactor. The uranium-carbonate method has also been studied, and it can be accomplished at less than 600 C.
  • Hyoung Kim on January 06 2016 said:
    Hello Mr. Michael McDonald,

    Thank you for the article!

    Would you elaborate the german reactor, such as a contact?

    Thank you in advance,


  • Ronald C Wagner on December 12 2016 said:
    Just use low sulfur natural gas directly and forget the hydrogen dream.

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