A new gold rush for a potential clean energy source

A global gold rush is underway for a long-overlooked resource that advocates say could play a significant role in the shift away from fossil fuels.

Geologic hydrogen, sometimes referred to as white, gold or natural hydrogen, refers to hydrogen gas that is found in its natural form beneath Earth’s surface. It is thought to be produced by high-temperature reactions between water and iron-ich minerals.

Hydrogen has long been billed as one of many potential energy sources that could play a pivotal role in the energy transition, but most of it is produced using fossil fuels such as coal and natural gas, a process that generates significant greenhouse gas emissions.

Green hydrogen, a process that involves splitting water into hydrogen and oxygen using renewable electricity, is one exception from what’s known as the hydrogen color rainbow. However, its development has been held back by soaring costs and a challenging economic environment.

It’s within this context that momentum has been building around geologic hydrogen. Exploratory efforts are now underway in countries such as the U.S., Canada, Australia, France, Spain, Colombia, South Korea and others.

Research published earlier this month by Rystad Energy showed that 40 companies were actively searching for geologic hydrogen deposits by the end of last year — up from just 10 in 2020.

The consulting firm, which described the pursuit of geologic hydrogen as a “white gold rush,” said the hype stems from hopes that the untapped resource could be a “gamechanger” in the clean energy transition.

“I would say this is something relatively old and new in a way,” Minh Khoi Le, head of hydrogen research at Rystad Energy, told CNBC via videoconference. “The first project that found hydrogen was a while ago, but it never picked up from there, right? People never seriously tried to go for exploration.”

The initial discovery of geologic hydrogen occurred in 1987 in a small village roughly 60 kilometers (37.3 miles) from Mali’s capital of Bamako. A failed attempt to drill for water by Canada’s Hydroma hit upon an abundance of odorless gas that was inadvertently found to be highly flammable. The well was soon plugged and forgotten.

Almost two decades later, subsequent exploration at the site found geologic reservoirs containing nearly pure hydrogen gas. Today, the resource is being used to provide power to the Malian village of Bourakébougou.

Last year, researchers found what may be the world’s largest geologic hydrogen deposit to date in France’s eastern Lorraine region. The unexpected discovery further boosted interest in its clean energy potential.

Geoffrey Ellis, a research geologist at the Energy Resources Program of the U.S. Geological Survey (USGS), told CNBC that there could be a vast amount of naturally occurring hydrogen buried in underground reservoirs around the world.

Based on current understanding, Ellis said there is likely to be about 5 trillion metric tons of geologic hydrogen in Earth’s interior, although most of this is likely to be too deep or too far offshore to be economically recovered.

Nonetheless, Ellis said that just a few percent of geologic hydrogen recovery might well be enough to supply all projected demand for 200 years.

“The potential is there but we’ve got to do the work,” Ellis said via videoconference, adding that more investment is necessary to accelerate early-stage research and development.

The U.S. Department of Energy last month announced $20 million to support 16 projects nationwide to advance the natural subsurface generation of hydrogen. It said the energy resource could potentially produce zero carbon emissions when burned or used in a fuel cell.