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Twiggy Forrest of Fortescue Future Industries Cuts
Loose on Hydrogen
22 June
2023
By David Waterworth
According to Rethink Energy, Dr. Andrew Forrest, the
founder of Fortescue Future Industries (FFI), a subsidiary of
Fortescue Metals Group, has clearly articulated the way forward for
hydrogen at the Financial
Times Hydrogen
Summit in
London last week.
According to speakers’
notes from the conference:
“In 2021, Fortescue Future Industries (FFI) was established as a
developer, financier, and operator of a global portfolio of renewable
energy resources to produce green energy at a scale equal to the oil
and gas super-majors. FFI is leading the green industrial revolution,
developing technology solutions for hard-to-decarbonise industries,
while building a global portfolio of renewable green hydrogen, green
ammonia, battery system and zero emission energy projects. Dr Forrest
is recognised as a global leader in the race to real zero, with
Fortescue the only mining company to be a founding member of the First
Movers Coalition, an ambitious climate initiative launched at COP26 by
President of the United States, Joe Biden. Fortescue is also a member
of the UN Race to Zero Coalition and a signatory to the Climate
Pledge. It is the only heavy industry company in the world to detail a
fully costed construction plan to completely remove fossil fuel from
its operations.”
Hydrogen generation is characterised by colours which
declare how it’s made: green, blue, grey, black, and now white. Green
hydrogen is created from the electrolysis of water using renewable
energy. Blue hydrogen is made using natural gas, with the greenhouse
gases captured and sequestered (CCS). Grey hydrogen is made the same
way, but without CCS. White hydrogen is naturally occurring.
Black and brown hydrogen are made using black or brown coal. Then
there is yellow hydrogen made with solar, and turquoise hydrogen “made
using a process called methane pyrolysis to produce hydrogen and solid
carbon.” Really. “In the future, turquoise hydrogen may be valued as a
low-emission hydrogen, dependent on the thermal process being powered
with renewable energy and the carbon being permanently stored or
used.” There is also a pink category for hydrogen made with nuclear
power. Who would have thought!
There’s so called “white hydrogen” now, which is naturally occurring.
Rethink Energy and Forrest agree that it will “only represent a small
sliver of the total hydrogen consumption over the next two decades and
a half,” though. This “won’t be enough to move the dial on climate
change.”
I am a proponent of green hydrogen only, the same as Twiggy Forrest.
Dr Forrest confirmed at the conference that Fortescue
Future Industries (FFI) would be investing tens of billions of dollars
into hydrogen projects in the USA as a result, in part, of the Inflation
Reduction Act (IRA). “The IRA is working
because it’s simple. If you want to serve up something complex to a
banker, you’re not going to get any money,” he said. For the sake of
the investors, FFI will concentrate on the American market in the
short to medium term.
“We can’t knock the IRA. I had 45–50 minutes of vigorous debate with
President Biden persuading him to take the limit off the amount of
capital that they would invest into green energy. My argument was that
it will pay itself back in new investment, in economic growth, and in
taxes every three or four years,” said Forrest, who also pointed to
the advantage of ready-built US infrastructure.
“You can transport your green energy down the grid, have your
electrolyser-cracking facility right next door to a major consumer,
the pipeline is that long. It’s so efficient, and then you are
subsidised heavily to do all that, which is not surprising because
we’re getting a new industry going,” he added.
What about the electrolysers? “Our future is machines
making machines — machines which make electrolysers, machines which
make long-distance high-density cables, solar panels which can crack
hydrogen in the panel. All these technologies are emerging quickly and
China is capturing that technology, putting it into machines and then
getting machines to make those machines,” he
said. The cost curves are expected to come
down. Sounds a bit like Elon?
Fortescue Future Industries is at various stages of
investment in hydrogen production in the Middle
East and North Africa (MENA), South America,
and of course his homeland of Australia.
“The company plans to make final investment decisions on five projects
across various locations, including Australia, the US, Kenya, Brazil,
and Norway,” he said. “If we go FID on several projects this year,
that’s moving at lightspeed.”
Dr Forrest pointed out that carbon capture and sequestration (CCS) is
a pipe dream, calling it “the newest story for the next old sucker.”
He gave the example of Chevron and its failed CCS project in
Australia. Chevron has publicly said it would let the project go since
it would send the company broke to continue. Are the governments of
the world stuck in a “Stockholm syndrome,” held hostage by the fossil
fuel industry?
Don’t blame the consumers! Until we have alternate forms of energy, we
are stuck too. The oil majors should be ashamed for getting rich at
the cost of polluting the planet.
DALL·E generated image of a green hydrogen industrial facility beside
a coal generation plan.
Forrest called on the world’s energy companies to provide energy that
does not harm humankind, and countries to introduce simple legislation
to stimulate investment in green hydrogen. “We need to hold our energy
giants to account and to give us energy that doesn’t harm us, and
they’re stalling on that.
“They’ve got all these fantastic excuses and I’m just
saying that we have got to stop falling for it. It’s just a stalling
tactic that we need to change,” said Forrest in response to Financial
Times associate editor Pilita Clark.
“It took around 35 years for the accepted science that tobacco smoke
causes lung cancer to become mainstream and the tobacco companies and
the oil and gas companies don’t have to win any arguments, they just
have to cast doubt, then they’ve won, because they’ll just continue
on,” he said, emphasizing that green hydrogen generation is the route
to follow
Forrest described the UK government as “sleepwalking” into the
hydrogen future. The UK has access to “hundreds of gigawatts of clean
energy from the North Sea.” He asked, “where are the policies” that
would make that cheaper?
When queried about Fortescue Future Industries’ previously set
targets, Forrest countered with: “… cut us a bit of slack,” recalling
that the world had cut the oil industry 200 years of slack and
trillions of dollars worth of subsidization.
The Russia–Ukraine war and the breach of the Paris 1.5-degree target
have highlighted the need to wean Europe and the rest of the world off
of fossil fuels. This has brought green hydrogen and its main
proponent, Dr Andrew Forrest, back into the spotlight. The EU has
increased its targets for green hydrogen, and fossil fuel prices have
increased. Push-and-pull economic factors are aligning to make green
hydrogen a permanent fixture of the global energy mix.
What we need now: greater policy support and progress on large scale
projects. Bring on the light speed, Dr Forrest!
Green Play Ammonia™, Yielder® NFuel Energy.
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Spokane, WA 99212
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