The Energy and Mineral Resources Ministry’s (ESDM) Geological Survey team samples hydrogen gas found in One Pute Jaya Village, Morowali Regency, Central Sulawesi Province, Indonesia, October 23, 2023.
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Koloma, a US-based clean fuel startup backed by Bill Gates and Jeff Bezos, says it wants to use expertise that has traditionally served the hydrocarbon industry to fuel a global gold rush for buried hydrogen.
It comes as buzz continues to build over the clean-energy potential of geological hydrogen, a long-overlooked resource that advocates say could play a key role in moving away from fossil fuels.
Geological hydrogen — sometimes known as white, gold, or natural hydrogen — refers to hydrogen gas found in its natural form below the Earth’s surface. It is thinking to be produced by high-temperature reactions between water and iron-rich minerals.
Pete Johnson, CEO and co-founder of Koloma, told CNBC that geological hydrogen is essentially an exploration and production business.
“We can take expertise and service providers that have traditionally served the oil, gas and mining industries and quickly put them to work on carbon-free resource discovery. Leveraging and modifying what already exists will allow us to mature the industry more quickly, “he said.
Based in Denver, Colorado, Koloma has raised more than $305 million since it was founded just a few years ago, the company told CNBC.
The startup’s backers include American venture capital firm Khosla Ventures, Amazon‘s Climate Pledge Fund, United Airlines and Breakthrough Energy Ventures, a climate and technology fund founded by Bill Gates in 2015.
In turn, Breakthrough Energy’s investors include Ray Dalio of Bridgewater Associates, Richard Branson of Virgin Group and Jack Ma of Alibaba.
A potential ‘gamechanger’
A dramatic rise in the number of companies actively looking for geological hydrogen deposits in recent years has prompted Rystad Energy analysts to describe the pursuit as a “white gold rush.”
The consultancy said in a research note published in March that the hype stems from hopes that the previously neglected resource could be a “game changer” in the energy transition.
Research efforts on the low-carbon energy source are underway in the US, Canada, Australia, France, Spain, Colombia, South Korea and others.
As with any exploration venture and any new technology, there are still many challenges to overcome to unlock the potential of geological hydrogen.
Pete Johnson
CEO of Koloma
Koloma’s Johnson said that as the industry has “gained momentum and attention”, there has also been greater emphasis on what he described as the “intrinsic benefits” of geological hydrogen as a primary energy source – rather than a derivative.
A primary energy source, such as coal, oil, wind or solar energy, refers to a natural source of energy that has not been altered or converted.
“Geological hydrogen should have a very low carbon impact, but also a tiny land footprint and a very low water impact,” Johnson said.
Meters that are part of the electrolysis unit of the geological H2 hydrogen storage facility.
Alex Halada | Afp | Getty Images
Asked about the prospects for the rapidly emerging industry, Johnson said the U.S.’s untapped geological hydrogen resources could play an important role in the country’s decarbonization efforts.
“Russia and Ukraine were both big exporters [of] Ammonia derived from hydrogen, the building block of most modern fertilizer products, and since their conflict began, the world has become more aware of the importance of a domestic supply of ammonia,” Johnson said.
“U.S. geological hydrogen resources will allow us to scale domestic ammonia production and become a net exporter, even as we dramatically reduce the carbon footprint of the products,” he added.
Challenges ahead
Hydrogen has been around a long time it is billed as one of many potential energy sources that could play an important role in the energy transition, but most of it is produced using fossil fuels such as coal and natural gas through a process that produces significant greenhouse gas emissions.
Within this framework, the momentum increases above the potential of geological hydrogen.
Jeffrey Ellis, a research geologist at the US Geological Survey’s (USGS) Energy Resources Program, told CNBC earlier this year that there may be a huge amount of natural hydrogen buried in underground reservoirs around the world.
Ellis said only a small percentage of geological hydrogen recovery may well be enough to meet all projected demand for 200 years.
The construction site of a hydrogen production plant in Germany.
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Not everyone is convinced of the potential of clean energy.
The Hydrogen Science Coalition, a group of academics, scientists and engineers seeking to bring an evidence-based view of hydrogen’s role in the energy transition, he said in a blog post published on March 14, that geological discoveries of hydrogen today provide the world with less daily energy than a wind turbine.
In addition, the coalition says there are environmental concerns about the extraction process, and transportation and distribution challenges mean geological hydrogen is not likely to be found where it is needed most.
Koloma’s Johnson said that while there are still many hurdles to overcome, the company is “very well capitalized, which allows us to approach these challenges in the right way, thoughtfully and patiently.”
“Koloma is fortunate to have the backing of diverse investors — some more focused on technology and data advantages [that] Koloma is building, some who see the huge potential returns of discovering large resources and others who are more enthusiastic about taking positions around low-carbon products with cost advantages that can use geological hydrogen,” Johnson said.
“As with any exploration venture and any new technology, there are still many challenges to overcome to unlock the potential of geological hydrogen,” he added.
