Inside the Global Race to Turn Water Into Fuel

Day and night, two-mile-long ore trains, weighing more than 90 million pounds, depart Christmas Creek for Port Hedland. From the port, an endless stream of cargo ships (once again, burning heavy fuel) sail for East Asia, where ore becomes steel in coal-burning mills.

Nearly 40 percent of the world’s iron ore comes from the Pilbara. Wherever you are, when you look out at the world, some of what you see is likely born of materials mined in and around Christmas Creek.

It wouldn’t be an overstatement to call the mine’s owner, Andrew Forrest, the most bullish of hydrogen’s backers. When he said two years ago that he was going to rapidly switch the mining operations of his company, Fortescue Metals Group, to running fully on electric batteries, green hydrogen and green ammonia, a fuel derived from hydrogen, he was “met with mirth,” he said recently.

“Back then there was a distinct, visible horizon of disbelief that the world could actually change,” said Mr. Forrest, who is also one of the richest people in the world. He’s adamant that there’s a market, even if others see folly.

Both Fortescue and BP envision themselves as vying for the lead in green hydrogen and have announced plans to invest hundreds of billions of dollars in projects across dozens of countries beyond Australia, from Oman to Mauritania to Brazil and the United States. Those would still account for only a smidgen of the hundreds of millions of tons the I.E.A. and others say would be needed to create a market in which green hydrogen was cheap enough that steel and concrete makers were convinced to convert their operations.

Even though both companies are hugely profitable, Australia’s government has made hundreds of millions of dollars available to them through subsidies and land allocations over the past two years, mostly in Western Australia, which is six times the size of California but has only 2 million people.

“Diesel has had 120 years to become plentiful and affordable,” said Jim Herring, who oversees Fortescue’s green industry development. “We want to scale hydrogen up in a tenth of that time. It’s a monstrous challenge, honestly.”

The ‘Absolute Zero’ Problem

Iron ore on the way to Port Hedland.

To liquefy hydrogen for shipping, it must be chilled to negative 252.87 degrees Celsius, just shy of absolute zero, the theoretical temperature at which atoms are completely still. Hydrogen is also very flammable, making storage difficult.

They’re just two of many obstacles.

Some doubts come from hydrogen’s advocates themselves. “The economics of shipping aren’t looking good,” said Alan Finkel, the architect of Australia’s hydrogen subsidies. “I was naïve, I think, in the past to see export being the main demand driver,” he said in a recent interview. Instead, “There’s a lot of sense in ‘use it where you make it,’ and Australia is really ideally set up for that,” he said.

Some are even more skeptical.

Saul Griffith, a prominent inventor in renewable energy who started his career at an Australian steel mill, doesn’t see a big role for green hydrogen. To replace fossil fuels, he said, “the electricity you use to make it would have to be ridiculously cheap. And if you have that, why use it to make hydrogen?”

He calls it “not a fuel that will save the world.” Better to spend the money, he and others argue, on reducing renewable electricity costs so that nearly everything can be electrified.

Mr. Forrest says skeptics simply lack scientific knowledge. Fortescue, he said, will mix hydrogen with carbon dioxide so it is similar enough in consistency to liquefied natural gas that it can be transported in the same tankers.

“It’s is as simple as it sounds,” he said.

Mr. Forrest said he believed that, by decade’s end, he would save his shareholders at least $1 billion a year by converting mining operations to green hydrogen, and that his company would ultimately produce hydrogen at dozens of sites worldwide. BP says it will be exporting large quantities of green hydrogen and ammonia by then, too.

The interest taken in hydrogen by oil and gas companies concerns some climate activists. While BP, for instance, has presented green hydrogen as part of its pivot toward cleaner energy, the company this year scaled back plans to phase down oil and gas production over the coming decades amid record industrywide profits.

Energy companies already produce most of the world’s hydrogen fuel, but make it from natural gas, which is, of course, a fossil fuel. Some, including BP, stand to receive federal subsidies in the United States because the company plans to capture the carbon and store it rather than release it.

This is called “blue hydrogen,” and some critics consider it a loophole in the Biden legislation that incentivizes fossil fuel production.

Ms. Dotzenrath said opposing blue hydrogen amounted to letting the perfect be the enemy of the good. “That’s absolutely nonsense,” she said. “It’s ultimately all about the carbon intensity.”

But in Australia, at least, BP’s green hydrogen investments are pushing ahead.