Existing relationships between energy exporting countries, which grants countries such as Russia and its post-Soviet neighbours, Saudi Arabia, Iran and the Middle Eastern Gulf States considerable global influence, are likely to remain in the international hydrogen trade, a new study by academics at the University of Sussex Business School, Khalifa University of Science and Technology, the Colorado School of Mines, and Hanyang University explains.
The study warns that the hydrogen economy adoption on a global scale with hydrogen broadly traded rather than just locally produced may incur similar security and defensive strategy implications from long-distance transmission and distribution supply chains as currently experienced in the global trade of fossil fuels.
And the authors warn that international competition over access to strategic locations and natural resources could become a potential barrier to hydrogen adoption if not sufficiently considered and proactively managed.
Strategic bottlenecks in the current oil and gas transmission, such as the Strait of Hormuz and the Suez Canal, could remain highly relevant in a low carbon economy if fossil hydrogen produced with carbon capture and renewable hydrogen are produced and exported from the Middle East, the study highlights.
The existing risks and threats to natural gas pipelines into Europe could remain, if hydrogen is blended into the natural gas network or new dedicated hydrogen pipelines are built along similar routes, while new transmission and supply chain routes, such as those connecting Oceania with Southeast Asia and East Asian countries or North America to East Asia, could also be vulnerable to increased animosities across the Pacific.
Benjamin K Sovacool, Professor of Energy Policy at the University of Sussex Business School, said: “In the current fossil-fuel led global economy, energy security is uneven across nations and presents important national and human security implications. Fossil energy resources are used as foreign policy instruments, to create military advantage, enable some countries to hold disproportionate influence in international affairs and stoke geopolitical tensions.
“It is envisaged that the move to a renewables-led global economy will see many of these issues dissipate as we move to energy production that can be localized, stored and used across multiple sectors. However the role of hydrogen complicates that narrative and allows for the potential for the energy tensions of the past to interfere with the present remain unless action is taken during the migration form one global energy system to the other.”
Dr Steven Griffiths, Senior Vice President for Research and Development and Professor of Practice at the Khalifa University of Science and Technology, said: “There remains a debate over the extent to which hydrogen will be adopted as an energy vector as well as the degree to which hydrogen will be internationally traded as opposed to locally produced and consumed. We have, however, seen in our study that established energy exporters, as well as new entrants such as Morocco, have clear strategic intentions to become significant exporters of hydrogen or hydrogen derivatives.
“For current major energy exporters, a significant role in a global hydrogen economy is logical since a number of countries, including many in Europe and in Northeast Asia, will require stable hydrogen imports from countries with established supply chain capabilities.”
The study, newly published in Energy Research and Social Science, details how a global hydrogen economy would alter the roles that countries play in global energy markets.
The authors predict a struggle in the coming years between countries strongly oriented toward green hydrogen adoption, such as EU countries, and those hoping to benefit from export of hydrogen derived from hydrocarbons, particularly natural gas, coupled with carbon capture, which could help maintain the global influence of petrostates such as Saudi Arabia and Russia.
The study also predicts that roles in a global hydrogen market could extend beyond producers and consumers to include:
• Hydrogen technology leaders: countries that invest in hydrogen R&D and are technology exporters, such as China and Germany.
• Hydrogen supply chain leaders: countries that can take advantage of local market conditions and low-carbon energy resources to provide hydrogen to external markets using long-distance supply chains, such as Australia and Saudi Arabia.
• Hydrogen conversion leaders: countries that have other intrinsic capabilities, such as suitable geologic formations for CO2 storage or infrastructure for hydrogen conversion into other vectors (e.g. ammonia, methanol, synfuels), that enables their role as intermediaries in hydrogen markets, such as The Netherlands and the UK.
Morgan D Bazilian, Director of the Payne Institute for Public Policy, said: “In the shift away from fossil fuels to a low carbon economy, the focus of geopolitical issues will likely change from a primacy of where these energy sources are found, to where the technology development centres and sources of critical materials are located.”