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Tatiana Serova

Tatiana Serova

Tatiana Serova is a freelance journalist and a Masters' student in International Energy and Journalism. She has experience working in newsrooms and for international organisations…

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Is The World’s Most Controversial Pipeline About To Pivot To Hydrogen?

Keeping the position of key energy supplier to the Old Continent comes at a price. And it looks like it’s a price Russia is ready to pay it. Moscow is silently investing in the production of hydrogen, potentially aiming to make it flow through its new NordStream 2 pipeline. While the future of the controversial project still fuels debates and uncertainties, Russia decided to adapt to its neighbor's needs for cleaner energy sources, and in particular for hydrogen, which the European Commission put at the forefront of its recovery agenda. 

A dialog between Berlin and Moscow is currently underway to produce green hydrogen on a large scale. That information was revealed during a conference held at the German-Russian Chamber of Commerce on February 16th. But as surprising as it may appear, this narrative is not new. Firstly mentioned in 2018, the hydrogen option for Nord Stream 2 was then put on the table by Uniper who, in March 2020, envisioned the ability of the pipeline to transport up to 80% hydrogen

"One of the key arguments against NordStream 2 is that adding natural gas contradicts the decarbonization objectives of Europe. Here, Russia's counter-argument is that NordStream 2 also has a hydrogen potential, and can fulfill those decarbonization objectives", according to Luca Franza, a researcher on EU-Russia gas relations. 

The choice of hydrogen investment by Russia can be interpreted as a tactic to make the project more appealing and to change Western countries’ stance on Nord Stream 2 sanctions. But beyond the geopolitical aspect, it raises several questions on its actual feasibility. 

Related Video: Weaponized Gas or Bridge to Cleaner Fuel? The Nord Stream Game

Firstly, will this hydrogen be blue (produced from fossil fuel sources) or green (carbon neutral)? The question is difficult to answer since the EU is not adopting a “color-blind” approach to hydrogen anymore. According to Luca Franza, "Russia has a better comparative advantage along the blue hydrogen value chain: it is, therefore, better positioned to send blue hydrogen rather than green, for which costs are still very high”. 

Stephan Weil, prime minister of Lower Saxony State, remains hopeful about Russia’s renewable energy potential for green hydrogen. “Russia can offer giant land potential as a basis to build up solar and wind power, and huge water resources for hydropower,” he commented, quoted by Reuters. However, looking at Russia's current energy mix, the country still relies for more than 60% on coal and natural gas and is far from being a role-model in renewable energy production. 

Moving to a 100% green hydrogen economy implies using blue hydrogen as a transition fuel until at least 2045 when costs are expected to begin to converge. The cooperation framework set between Russia and Germany seems to ignore these considerations and is determined to pursue green hydrogen production. 

The second major question then: how will this hydrogen be transported? 

The first option, and the least realistic one, would be the transportation of just hydrogen through the pipeline. Another solution consists of blending hydrogen with natural gas, but this method has several drawbacks. Regulations on allowed proportions of blending vary per EU member state and can range from 1% in the Netherlands to 8% in Germany under certain conditions. Recently, several MEPs have called for the harmonization of these blending standards, but the goal is far from being achieved.  Related: Texas Freeze Creates Global Plastics Shortage

Finally, the compatibility between the pipeline materials and the transport of hydrogen is also not that obvious. Research is being carried out on the need to add polypropylene to the pipeline to avoid corrosion. Addressing the leakage issue of hydrogen also becomes a necessity. 

Although technical modalities of the Nord Stream repurposing seem blurry, Russia is not starting entirely ex nihilo in the hydrogen field. In the long run, its ambitions are much larger than the NordStream 2 pipeline. Guided by the 2024 Hydrogen Roadmap, Russian companies started ramping up investment in clean hydrogen.

Russian energy giant Gazprom started developing the pyrolysis technology, which converts natural gas into hydrogen after heating it up. This technology is less energy-intensive than the electrolysis process, and less polluting than methane reforming, this method has the potential to kill two birds with one stone. The only issue is that it has not been commercially produced on a large scale yet. 

Russia's hydrogen production would be divided into two clusters: the North-Western one will transport hydrogen towards Europe, whereas the Eastern one will have Pacific-Asia as a final export destination. In parallel, Rosatom has been tasked with the mission of testing a hydrogen-fueled train in the industrial Sakhalin region. The nuclear company is also looking at the production of hydrogen from nuclear power - an option that is gaining popularity nowadays. It has already received funds from the Russian government for this research. 

However, nothing is less certain than the fact that Russia will be Europe’s most competitive supplier. Moscow does not yet possess sufficient hydrogen production capacity to become price-competitive. Thus, it will not be likely to meet European demand, estimated to reach 700TWh in the “business-as-usual” scenario (or 8% of total energy demand) by 2050 according to the EU Hydrogen Roadmap.

Projections are even more difficult to make in a market that does not yet exist and will be created only based on political will. "We tend to live in the future concerning hydrogen: Europe has ambitious projections concerning hydrogen demand, but we act like we are already there”, says Luca Franza. 

It is also unclear why Europe would prefer importing hydrogen from Russia instead of installing Carbon Capture and Storage (CCS) capacity for blue hydrogen produced domestically. 

In the end, although this green rebranding of Nord Stream 2 adds another element to the equation between energy security and environmental impact, it will not change the opinion of its traditional opponents, and even less to impact the sanctions imposed on it. 

By Tatiana Serova for Oilprice.com

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  • Mamdouh Salameh on March 22 2021 said:
    Whether being used to transport natural gas or hydrogen to the European Union (EU), Nord Stream 2 gas pipeline has to be completed first. Russia's gas giant Gazprom has plans to commission the pipeline this year. With 96% of the 1230-km long pipeline already completed, it is unstoppable.

    The EU is projected to need great volumes of gas well into the future. Moreover, any Energy transition whether global or in the EU won’t succeed without considerable contributions from natural gas and nuclear energy. That is why I find the suggestion of using Nord Stream 2 to transport hydrogen to the EU ludicrous for two reasons.

    The first is that gas usage is far more important and wider in the EU than hydrogen. The second is the cost of producing hydrogen. Blue hydrogen has to be produced from natural gas while green hydrogen has to be produced from water by electrolysis at considerable cost. In both cases, more energy will be needed to produce hydrogen than it will eventually give. If this is the case, wouldn’t be more cost effective to use natural gas straight?

    The United States knows full well that the Nord Stream 2 is unstoppable no matter how more sanctions it adds against it. Putin’s Russia will never succumb to pressure from the United States and will do whatever it takes to ensure that Nord Stream 2 is completed.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Aceof Spades on March 23 2021 said:
    Last year the Earth experienced the lowest atmospheric CO2 levels in many years and yet it was the hottest year on record. Real science (Laws of Thermodynamics) shows that placing something in the atmosphere that is denser than air will actually lower the temperature. Yes, less energy will escape Earth, but also far less energy will reach the Earth's surface due to the denser atoms. This is why a major volcanic eruption lowers the surface temperature on the Earth.

    We have a mini ice age about every 1100 years. Right now we are exactly at the mid-point between the mini ice ages, so the Earth is supposed to be warmer. 1100 years is nothing for the sun, and right now it seems that 1100 years is about the cyclic period for a bit more activity by our Sun. For the liberal arts majors....it means that the Sun is a little more radiant now than it was 550 years ago. Of course the Sun will become hotter and hotter continuously in the future.

    Anyway, the United States and Russia should build natural gas power plants near the Arctic where natural gas is abundant and transmit electricity where it is needed....be it Germany or California. This would be the most efficient energy use, especially once we get to superconducting power lines.

    Of course we should still power cars using natural gas and gasoline, but that's due to real science telling us that our cells are affected by long term exposure to dynamic electro-magnetic fields generated by powerful rotating electric motors.
  • Ace Diamond on March 23 2021 said:
    Last year the Earth experienced the lowest atmospheric CO2 levels in many years and yet it was the hottest year on record. Real science (Laws of Thermodynamics) shows that placing something in the atmosphere that is denser than air will actually lower the temperature. Yes, less energy will escape Earth, but also far less energy will reach the Earth's surface due to the denser atoms. This is why a major volcanic eruption lowers the surface temperature on the Earth.

    We have a mini ice age about every 1100 years. Right now we are exactly at the mid-point between the mini ice ages, so the Earth is supposed to be warmer. 1100 years is nothing for the sun, and right now it seems that 1100 years is about the cyclic period for a bit more activity by our Sun. For the liberal arts majors....it means that the Sun is a little more radiant now than it was 550 years ago. Of course the Sun will become hotter and hotter continuously in the future.

    Anyway, the United States, Canada and Russia should build natural gas power plants near the Arctic where natural gas is abundant and transmit electricity where it is needed....be it Germany or California or Michigan. This would be the most efficient energy use, especially once we get to superconducting power lines.

    Of course we should still power cars using natural gas and gasoline, but that's due to real science telling us that our cells are affected by long term exposure to dynamic electro-magnetic fields generated by powerful rotating electric motors.

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