Phl to accept bids for native hydrogen exploration

Hydrogen exploration has been attracting great interest around the world for energy (as clean fuel) as an innovation capable of meeting future energy demand with various applications in the power, transportation, commercial, and industrial sectors.

For this reason, the Department of Energy has organized the Hydrogen Energy Industry Committee to oversee the implementation of a circular dated Jan. 12 or the national policy framework and roadmap for hydrogen development, explained DoE Secretary Raphael PM Lotilla in a virtual briefing recently.

He said the “naturally occurring hydrogen has been discovered in Mali and in France which explained the high interest of Europeans in hydrogen development. “I am sure that even our East Asian neighbors will also be looking at opportunities in the area.”

Japan, for instance, is moving forward with hydrogen but from a different point of view for manufacturing hydrogen and China is also exploring to manufacture hydrogen from electrolysis, Lotilla explained.

Thus far, several companies from Australia, Europe and North America have shown interest in bidding for hydrogen contracts in the Philippines.

“We were pleasantly surprised by the level of interest in the areas we are bidding out for hydrogen exploration,” Lotilla said. 

Last February, the DoE launched the bidding for coal, petroleum, and native hydrogen exploration in the Bangsamoro Autonomous Region in Muslim Mindanao and other parts of the country, Business World reported.

Under the 2024 Philippine bid round, two pre- determined areas for native hydrogen adjacent to the northern portion of the Zambales Ophiolite Complex and the western portion of Central Luzon are up for bidding.

Both are located in the provinces of Zambales and Pangasinan, covering an estimated 134,096 hectares and 96,439 hectares, respectively.

The deadline for the submission of bids for native hydrogen is Aug. 27.

“These hydrogen contracts are in fact novel in today’s world because, apparently, it’s only the Philippines that has bid an area purposely for hydrogen exploration,” he added.

“But what we’re doing is enabling the other side of it, producing naturally occurring hydrogen,” Lotilla said.

Geologic hydrogen’s potential as a decarbonization fuel has spurred millions in investment and no fewer than 10 exploration companies looking to monetize its tantalizing prospects, but significant challenges remain before the prospective low carbon fuel can achieve widespread use, an analysis by S&P Global Commodity Insights showed.

“Historically, geologic hydrogen was overlooked,” said Geoffrey Ellis, Research Geologist at the US Geological Survey in a recent interview with S&P Global.

Despite having the tools, E&P companies were not looking for hydrogen, but “now it is clear…that anybody that is doing any kind of drilling and is producing gas is looking for hydrogen – they see hydrogen as a potential resource,” Ellis added.

They also see it as a potential revenue stream as there is a growing market for hydrogen. 

Global demand for the gas is projected to rise from the current 97 million mt/year, which is primarily used in the industrial sector, to 119 million mt/year in 2030 and 265 million mt/year in 2050, according to S&P Global data.

As demand grows S&P Global projects the hydrogen supply mix will shift to emergent low-carbon hydrogen pathways, with fossil-fueled hydrogen production declining starting in 2037. Geologic hydrogen could theoretically facilitate meeting this future demand.

“There’s a very wide range of output, ranging from 1000s of megatons to billions of megatons,” most of which is inaccessible but the amount that may be available is significant, Ellis said.

“If there were, say, 10 million megatons of natural hydrogen in these accumulations, and we could find 2 % or 3% that was shallow enough and large enough, and economic, that could potentially supply all the world’s demand for hydrogen for hundreds of years,” according to Ellis’s calculations.

Ellis estimates there may be enough recoverable natural hydrogen to supply more than 500 times S&P Global’s projection of global yearly demand in 2050.

Cheap, clean geologic hydrogen would theoretically increase market penetration in industry, transportation, and power generation, potentially reducing emissions without a significant impact on cost.

Moreover, with hydrogen strategies being established globally, policies such as the Inflation Reduction Act, or IRA, in the US where 45V Hydrogen Production Tax Credits, or PTC provide hefty subsidies to eligible hydrogen production projects based on their lifecycle greenhouse gas emissions intensity. By Rose de la Cruz