Australia Is Jumping On The Green Hydrogen Bandwagon

By Haley Zaremba - Mar 20, 2021, 12:00 PM CDT

It’s not news that COVID-19 wreaked havoc on energy markets across the world throughout 2020. But just to recap, it was a real doozy; total energy demand sank by 5 percent, liquefied natural gas (LNG) demand went down by 4 percent, coal by 5 percent, and energy investment tanked by a whopping 20 percent. But amidst the chaos, renewable energy generation managed to grow by a very respectable 7 percent, fuelling plenty of headlines and speculative columns wondering if the era of fossil fuels is already over.
In fact, many experts contend that we’re already experiencing peak oil.

While oil prices and demand have rebounded impressively since their rock-bottom moment in April 2020 when the West Texas Intermediate crude benchmark plunged below zero, effectively paying people to take oil off the market, many world leaders and investors have already begun to aggressively pursue a post-petroleum world. Even fossil-fuel-consuming juggernauts like China are assertively trying to change their trajectory toward a more climate-friendly energy future. Australia, too, has emerged as one of the leaders of this worldwide movement. The country, which has historically relied on fossil fuel extraction for a considerable portion of its economy, is now leaning into decarbonization efforts.

This is significant, as Australia is the world’s largest exporter of the world’s dirtiest fossil fuel: coal. The emissions-heavy fuel source accounts for more than half of the country’s coal exports and the country itself is largely run on the other black gold. According to a government website, “Australia’s primary energy consumption is dominated by coal (around 40 percent), oil (34 percent) and gas (22 percent). Coal accounts for about 75 per cent of Australia’s electricity generation, followed by gas (16 percent), hydro (5 percent) and wind around (2 percent).”

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But all that is set to change in the very near future. This week NERA (National Energy Resources Australia), an affiliate of the country’s Department of Industry, Science, Energy and Resources, released a report entitled “Looking ahead: COVID-19 and Australia’s new energy future,” which describes a move away from exporting primary materials such as coal, LNG, iron ore and other minerals. “By moving up the value chain, Australia can become a global leader in the advanced manufacturing of smart technologies that can help decarbonise the world’s economies and be commercialised and scaled across different industry sectors, including mining, energy resources, agriculture, space and defence.”

A big part of this new and improved Australian energy future will revolve around much-buzzed about green hydrogen. Green hydrogen is lauded for its potential as a clean-burning fuel source because when it is combusted it leaves behind nothing but water vapor. Hydrogen is only as green as the resources used to make it, however.

Hydrogen made with fossil fuels is referred to as gray hydrogen (and some refer to hydrogen made using less emissions-intensive natural gas as “blue hydrogen.”)

Green hydrogen, by definition, is made using clean energy.

Australian mining company QEM has already begun looking into green hydrogen opportunities at its flagship Julia Creek site in Queensland, a particularly symbolic green energy pivot at a shale oil deposit site. The green hydrogen venture is not intended to overtake the site’s shale oil and vanadium extraction, but to “underpin its continued development” in a more climate-friendly way and help to more responsibly grow the shale sector, rather than replace it.

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The studies, which are already underway, will examine the use of a “green” solar-powered electrolyzer at the Julia Creek site, paying special attention to such a project’s financial and regulatory requirements. If proven viable, in the short term the hydrogen would be used to power other kinds of non-renewable resource extraction such as those at the Julia Creek site and others across the ‘North West Minerals Province’ of Queensland.

In the long term, green hydrogen would feature prominently as a carbon-free resource for “hydrogeneration of QEM’s raw oil into transportation fuels.”

In addition to being an environmentally salient development, it’s also an economically savvy move. “QEM on Monday said its strategic progression comes amid a buoyant market, supportive government policy and optimal project location,” Upstream reported on Monday. “The company’s advancement of its green hydrogen production strategy comes amid growing investment and interest in such renewable energy ventures from both the private and public sectors.”


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