Itochu's 'blue' ammonia from Canada to power Japan's green future

Large facility to produce 1m tons a year from natural gas

Itochu will build the new ammonia plant in an industrial zone in the Canadian province of Alberta.

FUMIE YAKU, Nikkei staff writer

August 3, 2021

TOKYO -- Japanese trading house Itochu is set to begin commercial production of ammonia in Canada in 2026 at what is slated to be one of the world's largest manufacturing facilities for the clean-burning fuel.

BEHIND PAYWALL

Itochu's 'blue' ammonia from Canada to power Japan's green future - Nikkei Asia\

Japan’s Itochu joins forces on Canadian ammonia output

Japanese trading house Itochu plans to help produce and sell ammonia from gas in Canada's Alberta province from 2026, in a venture that will capture and store the carbon dioxide (CO2) produced.

Itochu will work on the project with Petronas Energy Canada, the Canadian subsidiary of Malaysian state-owned oil firm Petronas, and an unspecified Canadian infrastructure company. Itochu will be in charge of sales and logistics of the ammonia, considering potential exports to Japanese power, metal and petrochemical producers. The companies are targeting to start construction of the 1mn t/yr plant in 2023.

The companies plan to use natural gas generated from Petronas' oil fields in Alberta as the ammonia feedstock, while capturing and storing CO2 emitted during the production process to manufacture so-called blue ammonia. Itochu and the partners plan to send the CO2 to existing carbon capture and storage (CCS) facilities managed by Shell or Canadian companies to store it underground. They have not specified to which CCS facilities they will they send the CO2 to. Itochu is also discussing other uses for the CO2 but has not reached a decision.

Itochu has also agreed to study the feasibility of a blue ammonia value chain in Siberia with Russia's Irkutsk Oil. The trading house is leading a global group of 23 firms to research use of green ammonia as vessel fuels, with the fuel produced from renewable energy source with no emissions.

Japan is aiming to develop ammonia supply chains for the country's energy security. Japan's ministry of economy, trade and industry is targeting a 1pc share of hydrogen and ammonia for the first time in Japan's planned April 2030-March 2031 power mix.

By Nanami Oki

Itochu's 'blue' ammonia to power Japan's green future

NIKKEI -- AUG 03

Japanese trading house Itochu is set to begin commercial production of ammonia in Canada in 2026 at what is slated to be one of the world's largest manufacturing facilities for the clean-burning fuel.

Itochu has agreed to conduct a joint feasibility study with a Canadian subsidiary of Malaysian state energy company Petronas, as well as a local infrastructure company that builds gas pipelines. The $1.3 billion plant will manufacture ammonia from natural gas extracted from a field owned by the Petronas unit, making up to 1 million tons per year.

The trading house plans to ship the fuel to Japan, helping to bring the coal-reliant country a step closer to meeting its emissions-cutting goals. Ammonia generates no carbon dioxide when burned and can be blended with coal to reduce emissions at fossil-fuel power plants.

Plans call for breaking ground on the facility in an Alberta industrial zone in 2023. Itochu and the local infrastructure company will set up a joint venture for the plant. The trading house will handle most of the sales as well as set up a transportation network.

Ammonia is produced by stripping away hydrogen from natural gas and combining it with nitrogen. Itochu plans to capture and store carbon dioxide produced in the process. The resulting fuel, made with a reduced climate impact, is so-called blue ammonia, as opposed to "green" ammonia made using renewable energy sources such as solar power.

Ammonia from the new plant will be shipped from western Canada by sea to Itochu's home country, mainly for sale to power companies as well as manufacturers that generate their own power, such as steel and chemical makers.

A million tons of ammonia blended with coal at a 20-80 ratio is enough to power two 1-gigawatt power station units for a year. The Japanese government aims to have the country consume 3 million tons of ammonia fuel each year by 2030.

The Role of Green and Blue Hydrogen in the Energy Transition - A Technological and Geopolitical Perspective

December 2020
Sustainability 13(1):298
DOI:10.3390/su13010298
Authors:

Michel Noussan
Fondazione Eni Enrico Mattei


Pier Paolo Raimondi
Fondazione Eni Enrico Mattei


Rossana Scita


Manfred Hafner
Fondazione Eni Enrico Mattei


Download full-text PDF

Read full-text

Citations (22)References (109)Figures (5)

Abstract and Figures

Hydrogen is currently enjoying a renewed and widespread momentum in many national and international climate strategies. This review paper is focused on analysing the challenges and opportunities that are related to green and blue hydrogen, which are at the basis of different perspectives of a potential hydrogen society. While many governments and private companies are putting significant resources on the development of hydrogen technologies, there still remains a high number of unsolved issues, including technical challenges, economic and geopolitical implications. The hydrogen supply chain includes a large number of steps, resulting in additional energy losses, and while much focus is put on hydrogen generation costs, its transport and storage should not be neglected. A low-carbon hydrogen economy offers promising opportunities not only to fight climate change, but also to enhance energy security and develop local industries in many countries. However, to face the huge challenges of a transition towards a zero-carbon energy system, all available technologies should be allowed to contribute based on measurable indicators, which require a strong international consensus based on transparent standards and targets.


Different hydrogen generation pathways divided by colour. SMR: steam methane reforming, ATR: autothermal reforming, CCS: carbon capture and sequestration.
…


Estimation of future hydrogen costs for different pathways. Energy figures based on hydrogen lower heating value (LHV). Authors' elaboration on BNEF data, 2020 [14].
…


Potential CO 2 savings for different H 2 volumetric blending ratios in the natural gas grid (considering pure methane).
…


Hydrogen passenger cars stock in different countries. Authors' elaboration in References [64-66].
…


Comparison of selected countries based on green hydrogen domestic consumption and production potential. GCC means Gulf Cooperation Council (including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). Source: [123].
…
Figures - uploaded by Michel Noussan
Author content
Content may be subject to copyright.

I drove a hydrogen fuel cell electric car. 

EVs make more sense.

The momentum for electric vehicles makes a car like the Toyota Mirai less enticing.

By Sasha Lekach on August 17, 2021


Road tripping with hydrogen. Credit: Bob Al-Greene / Mashable Composite

My hands were starting to go numb, something that tends not to happen when I'm refueling my car in July.

As I pulled helplessly on the frozen nozzle connected to my loaner 2021 Toyota Mirai, I looked around the San Francisco Shell station, desperate for someone to magically melt the hydrogen pump off the car so I could get out of there. I was testing out the car for its performance, aesthetics, tech, and anything else, but I could already tell I would only be thinking about refueling.

I frantically read and re-read all the signage, noting the warning to not pour water on the connector, and the reassurance that a frozen nozzle wasn't unusual. Eventually it started to warm up, probably from all my stressed out energy, and the nozzle slipped off after a final tug.

At $16.50 per kilogram — meaning over $80 to fill up the Mirai’s 5 kg tank — the high price of hydrogen had already made me wary. But it was the freezing equipment that really showed me why electric vehicles are becoming more accepted while hydrogen-fuel cars like Toyota's Mirai are still niche and special. The Mirai hasn't brought hydrogen into the mainstream like Tesla did with battery electric.

When it comes to alternative fuel vehicles, electric charging isn't a breeze, but at least it doesn't require winter gloves.

Pulling up to the hydrogen station. Credit: Toyota


It's really saying something that hydrogen, an odorless, invisible compressed gas (hence the freezing pump equipment) that fills up the tank quickly, doesn't have an edge over slower electric charging. I was in and out of a hydrogen station within 10 minutes, just like at a gasoline stop. And meanwhile, I've sat plugged into charging stations for over two hours and still left with a partially charged battery. But electrons as fuel still appear to be in the lead when it comes to gaining widespread acceptance.

For one thing, despite the slow refueling, there are more places to charge when out and about with an EV — more than 26,000 public stations nationwide and about a third of those in California alone. As hydrogen has fallen by the wayside as a viable alternative fuel, battery electric charging infrastructure has expanded. There were 47 hydrogen refill stations in California as of earlier this year. Toyota has plans for at least 20 more into 2022. Outside of California, there aren't enough stations for most people to feel comfortable driving a hydrogen-dependent vehicle.

That's not a frunk, it's a fuel cell. Credit: Sasha Lekach / Mashable


Pop open the hood of the Mirai and you'll see the fuel cell stack. It takes hydrogen from the tanks and mixes with oxygen from the outside air, which creates an electric current that's then separated into an electric motor and battery in the back of the car. This is why fuel cell cars are sometimes referred to as "plug-less" electric vehicles. And that hydrogen has to live somewhere in the car, meaning they are also frunk-less.





No matter how electric and fuel cell electric vehicles (FCEVs) stack up, "EVs stepped up and took all the momentum," Daniel Davenport, senior director of automotive for tech consulting firm Capgemini Americas, said in a recent phone call. "In terms of a popularity contest [with hydrogen], electric is winning," Davenport added.

Even in more hydrogen-friendly California, a recent trip in a Mirai from San Francisco up the coast required a pre-meditated driving plan and a separate app, Alt Fuel, to find available hydrogen stations. The last hydrogen station for hundreds of miles was in southern Marin County, on the other side of the Golden Gate Bridge. Talk about range anxiety.

With electric, when there isn't a public electric charging station in sight, you can almost always find a wall outlet and slowly recharge. With the Mirai and its ilk, you can't plug in at home (or wherever you find a plug). Even though the Mirai has a small electric battery, the hydrogen needed to produce the electrons and protons (with water as a by-product) to power the battery is only available at a few public stations. There is no home plug-in option for the Mirai. In all of San Francisco, there were only two stations where I could buy hydrogen.

Hydrogen is part of the bigger effort to reduce oil dependency in transportation, as Robbie Diamond, CEO of SAFE, an energy security nonprofit, wrote in an email. But, he continued, "With much of the fuel delivery infrastructure already in place thanks to the electric grid, EVs are currently closer to realizing the economic, environmental, and national security benefits that come with reduced oil consumption.”

Making hydrogen fuel isn't always as "clean" of a process as powering electric grids with renewable energy from wind or solar. As a recent study claims, the process of extracting hydrogen from natural gas releases much more greenhouse gas pollution than previously thought. Consultant Davenport pointed out the existence of hydrogen fuel production methods that are more "green," but it may be too little, too late.

Between Electrify America and other charging network partnerships for free charges, EV tax credits, other federal and state EV infrastructure efforts, and mass production of EVs driving down manufacturing and battery costs, electric vehicles are more and more tempting.

Boosting hydrogen use is still a White House priority. It's a standout part of the bipartisan infrastructure bill with $8 billion set aside for at least four hydrogen production hubs. And yet the Mirai, which is one of only a few fuel cell electric vehicles (FCEVs) that are powered by hydrogen, can only be driven in a few U.S. states. Hawaii, for instance, only has one station in Honolulu.
SEE ALSO: 14 Tesla features your regular car definitely doesn’t have

Toyota's hydrogen car qualifies as a zero-emission vehicle, but hydrogen isn't getting the attention, support, or even publicity that EVs receive. It doesn't help that Tesla CEO Elon Musk called hydrogen "stupid" — or that filling up means you might literally freeze the car to the hydrogen dispenser.

Monitoring the Mirai. Credit: Sasha Lekach / Mashable


The car drove quietly and smoothly, much like other EVs. Unless I really studied the center screen showing how the energy was flowing through the car, I forgot there was a tank filled with highly pressurized hydrogen gas stored under the hood. It was only until the range started to drop that I'd start to stress about my next hydrogen fill-up.

Toyota is offering a huge incentive package worth $15,000 for three years of free hydrogen fuel to woo Mirai buyers, especially until hydrogen prices drop (if they ever do). The car starts at $49,500 for up to 400 miles of range on certain models. Toyota has been lobbying hard for hydrogen as the hybrid Prius pioneer falls behind the electric space, as the New York Times reported.

But my overall takeaway from my time as an FCEV driver? EVs' head start will freeze out cars like the Mirai — and not just at the hydrogen pump.

Related Video: 10 car companies coming for Tesla's EV crown

More in Electric Vehicles

Electric Powered Cars Get All the Ink But Don’t Sleep on a Hydrogen Powered Future

16 Aug 2021, 22:03 
by Todd Halterman

As the Biden administration focuses on creating a carbon-free energy sector in the U.S. by the year 2035 and the passage of a Senate infrastructure package set to include major investment into alternative fuels, the majority of ink is being devoted to Biden’s executive order to spur electric vehicle availability.
 

6 photos


But the most promising and often overlooked automotive technology may well be hydrogen fuel cell vehicles.

As it appears the EV vehicle revolution has actually arrived with news from Ford Motor Company of the game-changing 2022 F-150 Lightning Electric Truck, emission-free transportation could take various forms.

EV demand is already faced with challenges to available resources and infrastructure such as a lack of charging stations, shocks to the U.S. electric power grid, the problems facing self-driving systems and issues battery inefficiency.

These issues and more may soon lead to a search for - and investment in - EV alternatives.

The most likely alternative is certainly hydrogen fuel cell power.

As the most abundant element on earth, and indeed the galaxy - Hydrogen as fuel shows immense potential. And as fuel cell systems generate electricity by converting hydrogen and their sole emission is water vapor, their attractiveness in a carbon-free energy strategy is obvious.

Fuel cell technology can be easily be adapted to passenger cars and vans, as well as buses and commercial truck platforms and even the shipping and locomotive markets.

The development of hydrogen flight vehicles is already underway as well.

Hyundai, a pioneer of hydrogen fuel cell technology, already has plans to spend $6.7 billion and produce 700,000 fuel cell systems annually by 2030.

And the impact on the environment is hardly the only benefit expected as Hyundai says that effort will create more than 50,000 jobs. The recent export of the XCIENT Fuel Cell - the world’s first mass-produced fuel cell heavy-duty truck - is a harbinger of things to come. Toyota and Honda are also heavily invested in the promise of hydrogen technology.

Source: José Muñoz, President and CEO of Hyundai Motor North America

BLUE HYDROGEN IS COVER FOR BIG OIL

Industry fires back at 'landmark' study claim that blue hydrogen is worse than natural gas

Study claims blue hydrogen could be dirtier than gas or coal, but critics say researchers used incorrect assumptions to come to incorrect conclusions


Feeling blue: a new peer-reviewed study claims blue hydrogen is worse than for the climate than just burning natural gas

Photo: AFP/SCANPIX

16 August 2021 
By Josh Lewis

UPSTREAM
in Perth

The oil and gas industry is still digesting new research that claims blue hydrogen could potentially be worse for the climate than burning natural gas, although some critics have also hit out at the landmark paper.

The study by researchers at Cornell and Stanford universities was published last week in the Energy Science & Engineering journal and is claimed to be a first-of-a-kind peer-reviewed study of blue hydrogen’s lifecycle greenhouse gases footprint.

The study claims to debunk the notion that blue hydrogen represents an emissions-free, or even low-emissions option, citing the large amounts of natural gas needed to fuel the process itself and the escape of “fugitive methane” from wells and other equipment along the supply chain.

For its default assumptions, which include a 3.5% emission rate of methane from natural gas and a 20-year global warming potential, the study found total carbon dioxide equivalent emissions for blue hydrogen are only 9% to 12% less than for grey hydrogen.

Blue hydrogen is produced from natural gas feedstocks, with the CO2 by-product from hydrogen production captured and stored.

If the UK is to succeed in reaching net zero we will need all the tools in our toolbox. We should applaud the government’s global leadership on clean hydrogen

Equinor executive vice president Al Cook

While admitting carbon dioxide emissions were lower, the study notes fugitive methane emissions for blue hydrogen were higher than grey because of an increased use of natural gas to power the carbon capture technology.

The study claims, under its default assumptions, that the greenhouse gas footprint of blue hydrogen is more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat.

Even in a sensitivity analysis in which the methane emission rate from natural gas is reduced to a low value of 1.54%, the study found greenhouse gas emissions from blue hydrogen were still higher than just burning natural gas and only 18% to 25% less than for grey hydrogen.

The study authors note their analysis is a “best-case scenario” for blue hydrogen and assumes captured CO2 can be stored indefinitely, which they claim is “an optimistic and unproven assumption”.
'The results are stark'

"Politicians around the world, from the UK and Canada to Australia and Japan, are placing expensive bets on blue hydrogen as a leading solution in the energy transition,” said study co-author Robert Howarth.


'Act now, you idiots': Australian green groups call for action in wake of IPCC reportRead more

“Our research is the first in a peer-reviewed journal to lay out the significant lifecycle emissions intensity of blue hydrogen. This is a warning signal to governments that the only 'clean' hydrogen they should invest public funds in is truly net-zero, green hydrogen made from wind and solar energy."

The study also comes as the UK prepares to publish its long awaited hydrogen strategy, with blue hydrogen expected to play a role in the UK’s decarbonisation plans.

However, professor of mechanical engineering at the University of Cambridge, David Cebon, warned politicians to take note of the study’s findings before considering investment in blue hydrogen under the premise that it supports the UK’s climate goals.

“This landmark paper sheds light on the key unknown in the UK’s hydrogen debate: the greenhouse gas footprint of blue hydrogen. The calculation method is rigorous, the assumptions are all solid and the results are stark,” he said.

“Blue hydrogen cannot be considered ‘low-carbon’ or a ‘clean’ solution. In fact, this paper shows that producing blue hydrogen is significantly worse than burning fossil fuels for heat, such as gas or coal, in the first place.”
Incorrect assumptions lead to incorrect conclusions

Blue hydrogen and carbon capture and storage is forming a core part of many oil and gas companies energy transition plans as they look to continue to monetise their existing assets in a lower carbon future.

Norwegian giant Equinor is one such player that sees hydrogen playing a key role in the energy transition and is involved in several planned developments, including the proposed Net Carbon Humber development in the UK.

A spokesperson for the company told Upstream that Equinor believes the assumptions used in the study were not correct, which led to incorrect conclusions.


BP signs new agreements to underpin UK blue hydrogen schemeRead more

The spokesperson pointed Upstream towards a letter by Equinor’s executive vice president Al Cook that was published in The Times newspaper in the UK on the weekend.

In the letter Cook states that Equinor “strongly” disagrees with the claim that blue hydrogen made from natural gas could be worse for the environment than simply burning the gas for fuel.

In particular, he highlights claims in the study that — in the US — 2.6% of gas is lost to the atmosphere during production and transportation, causing climate change.

“The figure for the UK’s largest blue hydrogen project, Zero Carbon Humber, is in fact less than one hundredth of this,” he states.

“Zero Carbon Humber will be powered by gas from Norway, produced with some of the lowest emissions in the world. If the UK is to succeed in reaching net zero we will need all the tools in our toolbox. We should applaud the government’s global leadership on clean hydrogen.”

Blue hydrogen has transitional role

Meanwhile, Upstream was told by a spokesperson for the Hydrogen Council — a chief executive-led coalition of companies around the world — that it is still reviewing the research paper and its methodology.

“Bringing together 120-plus members from across a multitude of sectors, the Hydrogen Council believes that hydrogen technologies have a key role to play in delivering on global net zero goals,” the spokesperson added.

A spokesperson for independent UK advisory the Climate Change Committee (CCC) also told Upstream it had yet to review the details of the report.

However, head of carbon budgets at the CCC, David Joffe, took to twitter last week to hit out at the study, which he claimed represented a case where blue hydrogen “is done really badly and without any sensible regulations”.


Oil and gas emissions could risk 'killing concept of blue hydrogen', warns Equinor vice presidentRead more

He also highlighted that zero emission green hydrogen, made using electrolysis powered by renewable energy, would take time, with blue hydrogen able to fill in as a “transitional option” to help grow hydrogen, while reducing emissions.

“If we don’t do that, H2 will be less able to contribute to net zero in the areas where it is important as we won’t have given the demand side time to develop,” Joffe said via Twitter.

Officially, the CCC assumes a 95% CO2 capture rate on blue hydrogen production, which is consistent with what large engineering companies, such as Equinor, say is possible, using autothermal reforming technology.

The CCC’s own analysis finds that blue hydrogen could save up to 85% of emissions compared to unabated use of fossil gas, depending on the emissions footprint of fossil gas production being relatively low.

However, the CCC also only recommends hydrogen use be focused in those areas that cannot feasibly be fully decarbonised through other means, such as electrification, because the emissions reduction from blue hydrogen are still “significantly below 100%".(Copyright)

UK Government reveals plans for £4bn hydrogen investment by 2030

Low-carbon hydrogen economy could also create thousands of jobs

Hydrogen could cover 20-35% of the UK’s energy consumption by 2050, providing a cleaner alternative to fossil fuels. Photograph: Alamy


Jillian Ambrose 

Energy correspondent

THE GUARDIAN
Tue 17 Aug 2021 

The government hopes to attract at least £4bn of investment to the hydrogen economy by 2030 under plans to produce the equivalent of enough hydrogen to replace fossil fuel gas for heating and cooking in about 3m households in the UK.

The government has published its long-awaited plans for a UK-wide hydrogen economy, which it says could be worth £900m and create more than 9,000 high-quality jobs by the end of the decade, rising to £13bn and 100,000 new jobs by 2050.

The strategy document lays out its efforts to attract investment in 5 gigawatts of hydrogen production by 2030, which would mostly power heavy industry, as well as transport and up to 70,000 homes. It suggests hydrogen could cover 20-35% of the UK’s energy consumption by 2050, providing a clean alternative to oil and gas in energy-intensive industries, power and transport

It proposes a series of industry consultations to help establish a subsidy system to support large hydrogen projects to decarbonise areas that cannot run on electricity.

However, the plans remain dogged by uncertainty over how the government will determine a fair subsidy for the multibillion-pound projects and whether the cost will be shouldered through household bills or by the Treasury. The government has promised more clarity after an industry consultation later this year.

Matthew Fell, the chief UK policy director at the CBI, said the strategy included important steps for the economy-wide hydrogen sector.

“However, to truly capitalise on those large-scale economic opportunities, and unlock the private sector finance needed, firms will now be looking for the government to provide detailed policies and standards for hydrogen production and application,” he said.

The hydrogen projects under development include “green hydrogen” schemes, which extract hydrogen from water, leaving only oxygen as a byproduct, and “blue hydrogen”, which extracts hydrogen from fossil fuel gas before trapping the greenhouse gas emissions that are left behind.

However, last week a study by academics at Cornell and Stanford universities in the US, warned that blue hydrogen could be up to 20% worse for the climate than fossil gas owing to the emissions that escape during its production, multiplied by the amount of gas required to make the equivalent amount of energy from hydrogen.

The government says it will set out emissions standards for blue hydrogen projects to ensure they capture enough greenhouse gas emissions during hydrogen production to qualify as “low carbon”, but many environmentalists and green energy producers have put pressure on the government to drop its support for blue hydrogen altogether.

The strategy paper does not set out a vision for the balance of blue and green hydrogen in the future, despite a clear instruction from its official climate advisers at the Committee on Climate Change (CCC) to include a pathway for each to 2035.

The CCC has supported plans for a “blue hydrogen bridge” to play a role in supplementing green hydrogen over the near-term because it could begin displacing fossil fuels sooner and at a greater scale than green hydrogen projects. However, critics of blue hydrogen fear a long-term commitment could extend the UK’s reliance on fossil fuels.

Doug Parr, the chief scientist for Greenpeace UK, warned that producing large quantities of hydrogen from fossil gas would lock the UK “into costly infrastructure that is expensive and … may be higher carbon than just burning the gas”.

Dan McGrail, the chief executive of RenewableUK, said the national strategy “doesn’t focus nearly enough on developing the UK’s world-leading green hydrogen industry” and should “set out a clear ambition for green hydrogen”.

“We’re urging the government to set a target of 5GW of renewable hydrogen electrolyser capacity by 2030 as well as setting out a roadmap to get us there, to show greater leadership on tackling climate change,” he said.

This article was amended on 17 August 2021. The government originally stated that the hydrogen production could replace fossil gas in about 3m UK households. It has since clarified that it was referring to the equivalent of current household fossil gas usage and that the hydrogen will predominantly be used by heavy industry.

UK plan to replace fossil gas with blue hydrogen ‘may backfire’


Academics warn ‘fugitive’ emissions from producing hydrogen could be 20% worse for climate than using gas

Whitelee windfarm in East Renfrewshire. Researchers recommended governments focus on green hydrogen made from wind and solar energy. Photograph: PA


Jillian Ambrose 

Energy correspondent

THE GUARDIAN
Thu 12 Aug 2021 

The government’s plan to replace fossil gas with “blue” hydrogen to help meet its climate targets could backfire after US academics found that it may lead to more emissions than using gas.

In some cases blue hydrogen, which is made from fossil gas, could be up to 20% worse for the climate than using gas in homes and heavy industry, owing to the emissions that escape when gas is extracted from the ground and split to produce hydrogen.

The process leaves a byproduct of carbon dioxide and methane, which fossil fuel companies plan to trap using carbon capture technology. However, even the most advanced schemes cannot capture all the emissions, leaving some to enter the atmosphere and contribute to global heating.

Professors from Cornell and Stanford universities calculated that these “fugitive” emissions from producing hydrogen could eclipse those associated with extracting and burning gas when multiplied by the amount of gas required to make an equivalent amount of energy from hydrogen.

Robert Howarth, a Cornell University professor and co-author of the study, said the research was the first to be published in a peer-reviewed journal to lay bare the “significant lifecycle emissions intensity of blue hydrogen”.

The paper, which will be published in Energy Science and Engineering, warned that blue hydrogen may be “a distraction” or “something that may delay needed action to truly decarbonise the global energy economy”.

The researchers recommended a focus on green hydrogen, which is made using renewable electricity to extract hydrogen from water, leaving only oxygen as a byproduct.

“This is a warning signal to governments that the only ‘clean’ hydrogen they should invest public funds in is truly net zero, green hydrogen made from wind and solar energy,” Howarth said.

A spokesperson for the UK government said hydrogen would be “essential for meeting our legally binding commitment to eliminating the UK’s contribution to climate change by 2050” and promised further details in the government’s forthcoming hydrogen strategy, which is expected next month.

“Independent reports, including that from the Climate Change Committee, show that a combination of blue and green hydrogen is consistent with reaching net zero but alongside the strategy, we will consult on a new UK standard for low-carbon hydrogen production to ensure the technologies we support make a real contribution to our goals,” the spokesperson said.

Hydrogen power offers jobs boost, says government

By Paul Rincon
Science editor, BBC News website
Published15 hours ago

Hydrogen fuel cells can power vehicles

Thousands of new jobs could be created by investing in low-carbon hydrogen fuel to power vehicles and heat homes, the government says.

Ministers have unveiled a strategy for kick-starting a hydrogen industry, which they say could attract billions of pounds in investment.

Business Secretary Kwasi Kwarteng said the fuel was also essential for UK efforts to reach net zero emissions.

He said it had the potential to provide a third of UK energy in future.

Because of the current higher cost involved in producing hydrogen compared to existing fuels, subsidies have been proposed to overcome the gap. The government has launched a consultation on this plan.

Labour also backs hydrogen's potential, but said the government had failed to invest as much as other countries.

Using hydrogen gas as a fuel produces no carbon dioxide (CO2) pollution. It can be used to power fuel cells - devices that generate electricity through an electrochemical reaction - used in a turbine for electricity or burned in a boiler and vehicle engine.

As such, it is a low-carbon, versatile fuel that can be used by cars, trucks and trains, heat our homes and generate the power needed for industrial processes such as steel production.

Is the hydrogen tech 'revolution' hope or hype?

Can hydrogen fuel help drive towards green future?

The government plans to deliver 5GW of hydrogen production capacity by 2030, estimating that the industry could be worth £900m and support more than 9,000 jobs by the same date.

Hydrogen-powered trains are undergoing tests
The Hydroflex made a 25-mile round-trip in Warwickshire, reaching speeds of up to 50 mph

"Today marks the start of the UK's hydrogen revolution. This home-grown clean energy source has the potential to transform the way we power our lives and will be essential to tackling climate change and reaching net zero," said Mr Kwarteng.

"Our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it."

Reaching net zero by 2050 will involve cutting emissions as much as possible and then balancing out any remaining ones by planting trees or burying CO2 underground.

The potential role of hydrogen in achieving this target has been highlighted by a government analysis suggesting 20-35% of the UK's energy consumption by 2050 could be hydrogen-based.

A low-carbon hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032, the government claims. It would help decarbonise polluting industries such as chemical production and oil refining and heavy transport such as shipping and rail.

Experts say there is an urgent need to reduce emissions from home heating

Alan Whitehead MP, Labour's shadow minister for energy and the green new deal, said hydrogen power had a "significant role" to play in decarbonising the economy.

But he added: "The belated publication of this hydrogen strategy needs to be followed up with urgent action. That is what we will judge the government on because too many of the Tories' warm words and targets on climate change have not been followed up with practical steps.

"It is regrettable that the Conservatives have failed to match the investment shown by other countries and key decisions have been delayed, such as mandating that all boilers must be hydrogen-ready."

The government is proposing subsidies for the hydrogen industry along the lines of those credited with driving down the cost of offshore wind power.

It will also review the infrastructure - thought by some to be very costly - needed to underpin hydrogen power in the UK.

Ministers want a twin-track approach to hydrogen production.

So-called blue hydrogen is made using fossil fuels, but its environmental impact can be mitigated by capturing and storing greenhouse emissions underground. Green hydrogen, meanwhile, is made using renewable energy.

Though blue hydrogen is not as clean as the green form, it is cheaper.

Environmental campaigners say there is too much focus in the strategy on blue hydrogen. Jess Ralston, an analyst at the Energy and Climate Intelligence Unit, said the government should "be alive to the risk of gas industry lobbying causing it to commit too heavily to blue hydrogen and so keeping the country locked into fossil fuel based technology". This, she added, would make reaching net zero more difficult and costly.

Philip Dunne MP, chair of the environmental audit committee, commented: "While the twin track approach proposed, supporting both green and blue hydrogen production, is positive, it is also important that substantial capacity for carbon capture is developed, so as to avert release of damaging emissions currently created in blue hydrogen production."

In fact, one study by researchers in the US has suggested that blue hydrogen could release more carbon than burning natural gas.

Dr Jan Rosenow, from the Regulatory Assistance Project, an organisation dedicated towards accelerating the transition to clean energy, said: "As the strategy admits, there won't be significant quantities of low-carbon hydrogen for some time. We need to use it where there are few alternatives and not as a like-for-like replacement of gas.

He said the plan confirmed that "hydrogen for heating our homes will not play a significant role before 2030. The government's strategy shows that less than 0.2% of all homes are expected to use hydrogen to keep warm in the next decade. This means that for reducing emissions this decade, hydrogen will play only a very marginal role.

"But we cannot wait until 2030 before bringing down emissions from heating. The urgency of the climate crisis requires bold policy action now."

Green hydrogen 'transitioning from a shed-based industry' says researcher as the UK hedges its H2 strategy

Am I blue? Am I green? Government report isn't quite transparent

Lindsay Clark

THE REGISTER ®

Tue 17 Aug 2021 

The UK government has released its delayed hydrogen strategy which – in a strange move for a colourless gas – hedges its bets between green and blue.

The government claimed the UK-wide hydrogen economy could be worth £900m by 2030, potentially £13bn by 2050. In the next 10 years the universe's most abundant element could decarbonise energy-intensive industries like chemicals, oil refineries, power and heavy transport by helping these sectors move away from fossil fuels, it claimed.

Light, energy-intensive and carbon-free "hydrogen-based" solutions could make up to 35 per cent of the UK's energy consumption by 2050, helping the nation meet its target of net-zero emissions by 2050, according to the government paper.

But navigation from the current state of the hydrogen industry to that worthy destination might require some tricky manoeuvres. The vast majority of industrial hydrogen is extracted from natural gas [PDF] in a process that releases greenhouse gasses and requires energy, which often comes from carbon fuels.

In theory, the simplest way to overcome this problem is to use renewable electricity to extract hydrogen from water using electrolysis – so called green hydrogen. The problem is, although it works in the lab, the process has yet to be industrialised on a scale comparable with other fuels in the global energy supply chain. Green hydrogen received a fillip as researchers found methods to make electrolysis more efficient at lower capital costs.

An alternative is to continue to use natural gas as a source of hydrogen but to capture and store the methane and CO2 byproduct, and use renewable energy to power the process. But a recent study found making blue hydrogen was 20 per cent worse for the climate than just using fossil gas over its entire lifecycle.
Light on detail – and how are we producing it?

The UK government is hedging its bets, its strategy outlining a "twin track" approach to supporting multiple technologies including green and blue hydrogen production.

Critics have jumped on the plans for blue hydrogen. Doug Parr, the chief scientist for Greenpeace UK, told The Guardian that extracting large quantities of hydrogen from natural gas would lock the UK "into costly infrastructure that is expensive and … may be higher carbon than just burning the gas."

Speaking to The Register, Malte Jansen, Imperial College London research associate, said: "We may have reached a point in the battling climate change where I wouldn't want to be dogmatic about one or another. But if either technology delivers and fixes to climate problems by 2050, then that's good."

While blue hydrogen faced the challenge of capturing CO2 effectively and avoiding methane leakage, green hydrogen production was still maturing, he said.

"The industry is transitioning from a shed-based industry to a full-blown, highly automated one. I'm not dismissing the sort of level of technical intricacy, but there's still a lot of steps in the production of electrolysis that involve manual labour that could be automated."

While the UK government commitment could help the industry invest and raise capital, as other nations release hydrogen strategies – Germany already has one for example – the balance is likely to be in favour of green hydrogen, Malte said.

"I do not see the same level of push on blue hydrogen, people are talking about it but not just quite on the same global scale with that same level of excitement as green hydrogen," he said.

While it was a good start, the UK strategy needs more detail, Malte said.

But industries might have to wait a little longer for vital details. The strategy was already delayed because of Parliament's summer recess.

What the government has now published is a public consultation on a preferred hydrogen business model leaving many pieces of the jigsaw yet to find their places.

These include how it might build a system similar to the offshore wind industry's Contract for Difference, which gave investors confidence despite fluctuating energy prices. At the same time, the government is consulting on the design of the £240m Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK. Details on that and the blue and green hydrogen strategy would emerge in 2022 on the government's production strategy. ®

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Hydrogen Strategy | Four key takeaways for civil engineers

17 AUG, 2021 BY CATHERINE KENNEDY

The UK’s first-ever Hydrogen Strategy has been released today.

The plan drives forward the commitments laid out in prime minister Boris Johnson’s ambitious 10 Point Plan for a green industrial revolution, setting the foundation for how the government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030.

This could replace natural gas in powering around 3M UK homes each year as well as powering transport and businesses, particularly heavy industry.

Here are four key takeaways for civil engineers:

Technologies

The Hydrogen Strategy outlines a ‘twin track’ approach to supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production, and committing to providing further detail in 2022 on the government’s production strategy
Infrastructure

A review will be undertaken to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector

Action plan

A hydrogen sector development action plan will be launched in early 2022 setting out how the government will support companies to secure supply chain opportunities, skills and jobs in hydrogen

Government support

The strategy also details further support the UK government is providing for hydrogen projects, including:

£240M Net Zero Hydrogen Fund to support new hydrogen production projects

Up to £60M through the Low Carbon Hydrogen Supply 2 competition to support innovative hydrogen production, transport and storage technologies

Up to £183M for transport decarbonisation, including trials and roll-outs of hydrogen technologies for buses, HGV lorries, shipping and aviation. This will include:

up to £120M this year through the Zero Emission Bus Regional Areas (ZEBRA) scheme towards 4,000 new zero emission buses, either hydrogen or battery electric, and infrastructure needed to support them

up to £20M this year to design trials for both electric road system and hydrogen long haul heavy road vehicles (HGVs) and to run a battery electric trial to establish the feasibility, deliverability, costs and benefits of each technology

up to £20M this year for the Clean Maritime Demonstration Competition
up to £15M this year for the ‘Green Fuels, Green Skies’ competition to support the production of first-of-a-kind sustainable aviation fuel plants in the UK

£3M this year to support the development of a Hydrogen Transport Hub in Tees Valley, and £4.8M (subject to business case) to support the development of a hydrogen hub in Holyhead, Wales

A booming, UK-wide hydrogen economy could be worth £900M and create over 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13bn by 2050. By 2030, hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains, by helping these sectors move away from fossil fuels. Low-carbon hydrogen provides opportunities for UK companies and workers across our industrial heartlands.

With government analysis suggesting that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based, this new energy source could be critical to meet targets of net zero emissions by 2050 and cutting emissions by 78% by 2035.

The government has also launched a public consultation on a preferred hydrogen business model to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly.

Business & energy secretary Kwasi Kwarteng said that today "marks the start of the UK's hydrogen revolution".

"This home-grown clean energy source has the potential to transform the way we power our lives and will be essential to tackling climate change and reaching net zero," he said.

"With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it."

Energy & climate change minister Anne-Marie Trevelyan added: "Today’s Hydrogen Strategy sends a strong signal globally that we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of thousands of high-quality green jobs, helps millions of homes transition to green energy, support our key industrial heartlands to move away from fossil fuels and bring in significant investment."

Reaction

Energy and Climate Intelligence Unit analyst Jess Ralston

“A strong hydrogen economy in the UK could cement our place as a green industrial leader if the right action is taken early. The fuel could be very valuable for cleaning up steel production and protecting jobs in this industry – crucial when Europe is already steaming ahead with 23 hydrogen steel plants when we have none. But some questions remain over whether the government has truly grasped which areas will be most suitable for hydrogen use and which will not.

“For example the case for hydrogen for home heating is far from proven, particularly hydrogen derived from fossil gas rather than from renewable energy. After all, any remaining fossil gas with a hydrogen blend in the grid is just not compatible with net zero and it’s not yet clear how effective hydrogen will be, nor how much it will cost.

“The government should also be alive to the risk of gas industry lobbying causing it to commit too heavily to blue hydrogen and so keeping the country locked into fossil fuel based technology, making reaching net zero more difficult and costly. Instead, focussing on green hydrogen could unlock the our full industrial potential, bringing with it lifelong jobs in places like the North East, supporting both the government’s climate goals and its levelling up ambitions.”

Ramboll UK energy market director John Mullen

“What this strategy will finally deliver, and what is really needed, is the business assurance that investment in hydrogen infrastructure and technology is a good bet. Hydrogen presents us with an excellent opportunity to repurpose and make use of existing infrastructure already in place for fossil fuels to support a burgeoning new frontier in the UK energy sector.

However as a developing market the government should be seizing the opportunity by providing investment and the development of a concrete action plan now, rather than making us wait until 2022. Transitioning away from gas will require investment, and we need to ensure the support is there for upskilling and learning if we are to reach their 2030 goals. Effective regulatory frameworks and financial incentives are also needed for hydrogen to work in synergy with existing technologies”

“Hydrogen is often presented as a silver-bullet solution to the UK’s carbon and climate concerns, but relying on it alone will not solve the UK’s challenge when it comes to the challenge of meeting Net Zero. Although a key part of the puzzle for parts of the energy industry, it will only hold around 5-10% of the UK’s energy mix and we cannot take our eye off broader investment and support for renewable energies.

“There are also still distinct challenges to overcome and the ‘twin track’ approach will need to be closely monitored as Blue Hydrogen and Carbon Capture are incredibly inefficient processes at present and the only justification for their use is to allow for the transition to a green hydrogen world. Blue hydrogen could be used to support business cases to implement new Hydrogen infrastructure, however the government needs to put a cap on the greenhouse gasses produced and place a deadline for the end of all blue hydrogen production in the next 10 to 15 years.”

Hydrogen Taskforce Secretariat co-lead Clare Jackson

“Today’s Hydrogen Strategy is a landmark moment for the sector. By setting clear direction for the development of the hydrogen sector, it offers a framework which will enable businesses to invest in hydrogen projects.

“This is a vital first step towards unlocking hydrogen’s huge potential for the UK but there is still much to be done to scale up hydrogen solutions. As our research has shown, hydrogen has a crucial role to play in decarbonising industry, generating power, transport and heating homes, while boosting job creation, sustaining local industries and supporting UK innovation in energy.

“We look forward to seeing further crucial steps towards this low carbon future, such as implementation of the Government’s proposed business models for hydrogen. The Taskforce and its members are ready to deliver the vision for a low carbon UK detailed in the Hydrogen Strategy.”

HyNet North West project director David Parkin

“Industry across the UK’s North West industrial heartland is crying out for low carbon hydrogen so we welcome the promise of more support. HyNet is driven by demand from organisations across the region who are committed to the decarbonisation of their processes. This includes over 20 major industrials, many of whom are households names, who have signed up to switch to HyNet hydrogen, replacing the natural gas fossil fuel they currently use to support the drive to net zero.

“We are working at pace. With initial engineering nearly completed on HyNet’s first hydrogen production plant at Essar’s Stanlow Manufacturing Complex, hydrogen production will begin as soon as 2025 and deliver up to 4GW of low carbon hydrogen by 2030 - nearly 80% of the UK target in the new hydrogen strategy. Large scale demonstrations of industrial fuel switching from natural gas will begin shortly with NSG Pilkington in the world’s first large scale glass manufacturing using hydrogen.

“The key now is for the government to build momentum by prioritising projects that are ready for development today. The sooner we get hydrogen to business, the better they can protect jobs and compete internationally while cutting emissions. The UK should seize the opportunity to lead the world in hydrogen as it did offshore wind.”

National Grid hydrogen director Antony Green

"The transition to a green economy will require a mix of technologies and hydrogen will play a vital role. This strategy signals the UK’s commitment to hydrogen and provides the certainty needed to boost consumer and investor confidence and support commercial solutions.

"Importantly, unlocking the potential of hydrogen as a clean energy solution requires significant pace and innovation to scale up production, and the guidance from government today will be key to triggering the investment and buy-in needed to achieve this."

Energy UK chief executive Emma Pinchbeck

"Hydrogen and CCUS are going to be incredibly valuable for sectors that will be difficult to decarbonise with electricity – and so we welcome that today’s Hydrogen Strategy takes an economy-wide approach to developing these innovative technologies.

"The UK has real potential for hydrogen and CCUS, both of which can deliver new skilled jobs, particularly in places where the UK already has a proud industrial and energy heritage."

National Infrastructure Commission chair Sir John Armitt

“This strategy provides a platform for hydrogen to take its place as part of the solution for decarbonising our economy. The proposed twin-track approach to both blue and green hydrogen development presents a realistic pathway to meet the breadth of potential uses across different parts of the economy including industry, transport and power. As recognised by government, it is vital that we concentrate on truly low carbon hydrogen production, and therefore the proposed development of technical standards is welcome.

“The big question is how to drive down the costs of hydrogen production, and its relationship with the low cost of natural gas. That will only happen by scaling up production, so alongside the positive measures to kick start the sector there needs to be a longer term funding model that provides investor confidence in the same way the UK has successfully achieved in the offshore wind sector. Government will also need to decide how best to ensure the cost of natural gas reflects the cost of carbon.

“Clarity on where the costs will fall in such a model, and how they will be distributed fairly, is needed soon in order to secure industry and public confidence and support.

“This strategy is an important milestone, and industry will now look forward to seeing details of the business model, funding mechanism and sector development plan in the coming months.”

BIG OIL USA VS BIDEN
API heads lawsuit fighting US leasing pause

Legal actions build as Biden administration appeals federal judge's injunction

Paused: US Secretary of the Interior Deb Haaland speaking in July in Washington, DC


17 August 2021
By Russell McCulley

UPSTREAM
in Houston City

A group of oil and gas industry trade groups led by the American Petroleum Institute (API) filed a lawsuit this week challenging the temporary suspension of new oil and gas leases on federal lands and waters in the US.

API and 11 other industry organisations are disputing President Joe Biden’s indefinite pause on issuing new leases on the grounds that the administration “failed to satisfy procedural requirements and ignored congressional mandates for holding lease sales,” in the words of API senior vice president and chief legal officer Paul Afonso.

The plaintiffs — including the International Association of Drilling Contractors, National Ocean Industries Association and several groups representing state and regional interests — said the administration’s indefinite pause violated federal laws and circumvented congressional mandates that require quarterly onshore lease sales and “expeditious development” of offshore resources.

Biden issued an executive order shortly after taking office in January, directing federal agencies to suspend oil and gas leasing activities while the administration reviews the programme, prompting several oil-producing states to challenge the directive in court.

In June, US District Judge Terry Doughty issued a preliminary injunction blocking the policy from going into effect.

Doughty is a judge in the Western District of Louisiana court, where the API lawsuit was filed.

The US Department of the Interior, which administers federal lease sales, issued a statement Monday saying onshore and offshore lease sales would continue while the administration fights the preliminary injunction in the Fifth Circuit Court of Appeals.

The statement said the appeal, filed by the Department of Justice, was “important and necessary” while the administration considers the environmental and social costs of oil and gas exploration.

The department said “numerous critical reports over decades” have raised concerns about the leasing programme’s alleged shortcomings, including vulnerability to fraud and abuse.

The statement also said the current leasing programme “fail(s) to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions”.

The department said it would comply with the injunction during the appeal and “conduct leasing in a manner that takes into account the programme’s many deficiencies” while considering procedural changes that could help meet the administration’s targets to cut greenhouse gas emissions in half by 2030 and achieve net zero emissions by 2050.

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BHP to exit oil and gas as it strikes merger deal with Woodside

All-stock merger will create a global top 10 independent energy company, by production

17 August 2021 
By Josh Lewis
and Russell Searancke
in Perth and Wellington

Australia’s Woodside Petroleum is set to acquire BHP’s entire petroleum business via an all-stock merger that will create a company with a combined market capitalisation of up to A$41 billion (US$29.9 billion).

The two companies confirmed Tuesday they have entered into a merger commitment deed to combine their respective oil and gas portfolios.

The newly merged entity will be 52% owned by existing Woodside shareholders, with BHP shareholders holding the remaining 48% equity.

The companies estimate the merger will result in synergies of more than US$400 million per annum from optimising corporate processes and systems, leveraging combined capabilities and improving capital efficiency on future growth projects and exploration.



“The merger of our petroleum assets with Woodside will create an organisation with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition," said BHP chief executive Mike Henry.

“Bringing the BHP and Woodside assets together will provide choice for BHP shareholders, unlock synergies in how these assets are managed and allow capital to be deployed to the highest quality opportunities. The merger will also enable the skills, talent and technology of both organisations to build a resilient future as the world’s needs evolve.”
Breaking into the top 10

The combined business will have a conventional asset base producing about 200 million barrels of oil equivalent per year, which BHP and Woodside claim would make it a global top 10 independent energy company.

The business would also have a diversified production mix consisting of 46% LNG, 29% oil and condensate and 25% domestic gas and liquids, based on production for the year to 30 June 2021.

It will also hold proven plus probable reserves totalling more than 2 billion boe, comprising 59% gas and 41% liquids.

It would have a diversified geographical portfolio, including assets in Australia, the Gulf of Mexico and Trinidad & Tobago.

On a proforma basis, based on the 12 months to 30 June this year, the combined entity would have revenues of US$8 billion and earnings before interest, taxes, depreciation and amortisation of US$4.7 billion. It would have operating cash flows of more than US$3 billion and low gearing of 12%.

Woodside will remain listed on the Australian Stock Exchange, while listings on additional exchanges is being considered following the completion of the merger in the second quarter of 2022.

The proposed merger is still subject to confirmatory due diligence, negotiation and execution of full form transaction documents, as well as a number of conditions, including shareholder and regulatory approvals.
Meg O'Neill confirmed as CEO

The merged entity will be headed up by Meg O'Neill as chief executive, having already served as Woodside's acting chief executive since the departure of Peter Coleman earlier this year.

O'Neill said the merger would deliver a stronger balance sheet, increased cash flow and continuing financial strength to fund planned developments in the near term and new energy sources into the future.

“The proven capabilities of both Woodside and BHP will deliver long-term value for shareholders through our geographically diverse and balanced portfolio of tier 1 operating assets and low-cost and low-carbon growth opportunities," she said.

“The proposed transaction de-risks and supports Scarborough FID later this year and enables more flexible capital allocation. We will continue reducing carbon emissions from the combined portfolio towards Woodside’s ambition to be net zero by 2050."
Scarborough sanction still on schedule

The two companies confirmed Tuesday they had developed a plan to still be able to take a final investment decision this year on the proposed Scarborough development in Western Australia, prior to the merger's proposed completion date.

This would see BHP sell its 26.5% interest in the Scarborough joint venture and its 50% equity in the Thebe and Jupiter joint ventures to Woodside if the Scarborough joint venture takes a final investment decision by 15 December.

That deal would see Woodside pay a combined US$1 billion for the assets, with adjustments from an effective date of 1 July 2021, while an additional payment of US$100 million would be due if a positive investment decision is made on the Thebe development in the future.

BHP can exercise the option to sell its stakes to Woodside in the second half of the 2022 calendar year.
Concern over Bass Strait decommissioning

Financial analysts expressed their concern to Woodside that they were unable to adequately value the deal because there was no financial information provided on BHP's decommissioning liability in Australia's Bass Strait.

BHP and ExxonMobil own 50% each of the ageing Bass Strait oil and gas assets in the Gippsland basin which have a significant decommissioning commitment.

O'Neill responded that the decommissioning costs in Bass Strait had been accounted for in the transaction price, but stopped short of disclosing those costs.
Deal sparks anger from climate activists

News of the merger immediately sparked protests from climate activists, who gathered outside BHP's offices in Perth, Western Australia, to protest against the sale of the mining giant's petroleum portfolio to Woodside.

Campaigners attempted to deliver more than 5000 individual petitions from across Australia urging BHP to prevent the Scarborough development from progressing.

They claim the project would release 1.6 billion tonnes of carbon dioxide into the atmosphere over its life.

"Rather than take responsibility for the highly polluting petroleum business sites BHP has built, this is a cynical attempt to simply walk away," Anthony Collins, a campaigner with 350 Perth, said.

“Ultimately, Woodside is acting as BHP’s ‘useful idiot’; taking on a burden that BHP has decided is too toxic to touch.

“Woodside itself has demonstrated that it has no interest in anything other than producing as much oil and gas as possible and has neither the ability nor the willingness to make its business model appropriate for the times in which we live. This deal allows them to continue expanding fossil fuel production, accelerating damage to the climate."

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