Not too long ago, somebody reached out to me with this query. They obtained an engineering diploma and an MBA from good colleges, have labored at one of many world’s prime consultancies, have finished CEO-level technique work, and at present have decarbonization accountability for a $4 billion annual income transportation firm. They’ve the STEM and monetary chops that make it apparent hydrogen for vitality is a lifeless finish, in addition to pores and skin within the sport.

As a result of they really know the science, run the numbers on decarbonization options, and cope with in any other case shiny, knowledgeable, competent individuals who have lots of these attributes, they had been deeply perplexed why they had been getting hydrogen for vitality questions and proposals twice a day. Of their phrases, “What drives this insanity on hydrogen?” They hoped I might shed some mild on the topic to assist them cope with the matter extra successfully and effectively.

I’m withholding the title for a few causes. One, the particular person in query has an essential and already conflict-laden function of transformation, and wouldn’t be helped by turning into a lightning rod inside their agency, shopper, and provider group. I’ll floor that cost for them. Second, I get this query on a regular basis from completely different folks I interact with globally. After I cope with funding teams, ceaselessly they’re questioning the identical factor even when they don’t have the STEM chops to observe Paul Martin’s explanations within the house. They respect my full disregard for folks’s emotions in my ruthless adherence to operating the numbers in a number of domains, respect the outcomes in areas they perceive, but see the disconnect between the present hydrogen hype and my positions and evaluation of hydrogen for vitality. We’re all bullish on hydrogen electrolysers and constructing plenty of inexperienced vitality to energy them, however are practical about what off-takers really exist for tasks.

The newest particular person to ask the query had the identical context I do with my projection of hydrogen demand via 2100, the identical as BNEF founder Michael Liebreich along with his glorious hydrogen ladder, and the identical as chemical engineer and co-founder of the Hydrogen Science Coalition Paul Martin along with his many explainers on the science and actuality of hydrogen. They know we use about 120 million tons of it yearly in trade — 90 million tons of pure hydrogen and 30 million tons of hydrogen in artificial gases. They realize it’s an important industrial feedstock and that it’s a significant local weather change downside. They know that we have now to fabricate low-carbon hydrogen for these functions. They know we have now to make ammonia-based fertilizers rather a lot greener by changing black and grey hydrogen with inexperienced hydrogen.

However as a transportation and decarbonization professional with STEM and enterprise levels, my most up-to-date correspondent on this matter is aware of that it’s simply nonsense as a retailer of vitality for the overwhelming majority of functions. (Michael Liebreich is bullish on hydrogen for very long-duration storage in salt caverns, whereas I believe we must always simply fill the caverns with as a lot of the biomethane we will’t keep away from producing as doable and construct much more HVDC. I believe that is likely to be a subject of dialog at dinner with him and inexperienced funding banker Laurent Segalen subsequent week in London.)

They’d a minimum of a tough concept of why oil and fuel majors had been motivated to push hydrogen for vitality, if solely to delay the inevitable transition. However they had been very perplexed (and undoubtedly ceaselessly aggravated of their day jobs) about the remainder of the hydrogen foyer pushing hydrogen into non-viable small pockets equivalent to their phase of transportation to justify their investments. They had been questioning the way it helped them. As they requested, “Absolutely they will need to have run the numbers though they don’t dare present them. Proper?”

Right here’s my response, flippantly edited:

There are a number of teams I separate this into.

Clearly, there are the oil and fuel corporations. They’ve two motivations. Delaying the transition is one among them, in fact. But when they’ll’t persuade everybody that hydrogen is required for vitality, they received’t be capable to flip their hydrocarbon reservoirs into cash through blue hydrogen, and they are going to be nugatory. As corporations like Shell and bp have 4–10 billion barrels of confirmed reserves, these property will grow to be virtually nugatory. And these corporations deal with these reserves as a fiscal device for debt financing. Nugatory reserves = monetary establishments calling of their money owed, the collapse of their inventory costs, and the chapter of these corporations.

Monetary establishments with huge positions in oil and fuel corporations have a vested curiosity in these corporations persevering with to be wholesome, they’re stuffed with folks with enterprise levels, however normally empty of individuals with STEM levels. I’ve been in classes with 25 funding managers for multi-billion-dollar infrastructure funding funds, and after I obtained to hydrogen I requested how many individuals had chemistry, physics, or different STEM levels. Nobody did. This doesn’t make them dangerous folks, however the lack of STEM chops signifies that they’re depending on advisors and targeted on due diligence on the enterprise aspect, not the technical aspect. The oil and fuel trade tells them hydrogen is the reply, fills their eyes with greenback indicators, after which primary human nature turns them into boosters.

One thing comparable occurs within the corridors of governmental energy. 6.1% of Norway’s GDP is from its fossil fuels. 25% of Saudi Arabia’s is. There is no such thing as a future the place hydrogen isn’t a supply of vitality the place these percentages don’t simply disappear. There are secondary and tertiary GDP impacts as nicely, so the precise financial losses are greater, probably double. And because of the outsized financial significance in fossil-fuel-heavy international locations like these, Canada, Venezuela, and Australia, governmental politicians and bureaucrats have a revolving door into and out of trade, and their doorways are all the time open to lobbyists. Politicians and bureaucrats could also be glorious folks, but it surely’s fairly uncommon to seek out arduous engineering backgrounds amongst them. And so, the oil and fuel trade tells them hydrogen is the reply, they usually consider them as a result of in any other case they don’t have a very good reply, governmental revenues plummet, they usually don’t have their comfortable jobs or board positions after they exit public service.

The following are folks with a know-how that makes hydrogen or makes use of it, like Ballard or Plug Energy. They obtained invested in it in some unspecified time in the future previously, typically previous to 2000 when batteries and renewables sucked, after which affirmation bias and their paychecks simply maintain them from accepting actuality, chopping their losses, and pivoting to one thing helpful. I all the time like to have a look at inventory worth historical past with corporations like that. Each of these corporations had peak inventory worth in March of 2000, which clearly means it was peak hype in the marketplace, and at the moment are at 3% and 0.6% of that inventory peak respectively, which actually ought to inform the fiscal folks one thing.

Then there are the businesses who’re lifeless, however nonetheless transferring round. Cummins is a living proof. They construct huge engines, virtually completely for floor transportation (though, they’ve a marine division). All of their mental capital is about burning stuff inside huge inner combustion engines. Just about their whole market goes away if hydrogen isn’t the reply. Since I needed to search for if that they had a marine engine division, I can assure that they’re unlikely to be the chief in supplying the comparatively few marine engines left in any case inland and two-thirds of brief sea delivery electrifies (my projection). Wärtsilä, Hyundai Heavy, and STX Heavy usually tend to persist. Cummins of us have crossed my display screen ranting about my hatred of hydrogen and that I’m fallacious as a result of if I (and lots of others like me) are proper, they don’t have any future.

Then there are the credulous followers, virtually completely devoid of STEM expertise. (Though there are additionally deluded folks with good STEM backgrounds in there that produce other cognitive biases.) The credulous followers have a well-thumbed copy of Rifkin’s e-book on their bedside desk, they click on on each clickbait article on hydrogen that crosses their display screen, they usually watch hydrogen movies. They’re the helpful idiots, spoonfed hydrogen crack by those with fiscal oars within the water. Many are readers of CleanTechnica, and fill the feedback part with statements about how I’m the biased one who doesn’t perceive the science.

So, sure, the hydrogen foyer is a many-headed hydra. It’s a self-reinforcing circle of individuals whose livelihood will depend on hydrogen for vitality changing fossil fuels. There’s some tribalism happening. There are a bunch of apparent cognitive biases which might be maintaining them from accepting actuality, with the prospect concept being key amongst them. That concept was the one which received psychologist Daniel Kahneman a Nobel Prize in economics in 2002 and is a cornerstone of behavioral economics.

At its easiest, all prospect concept says is that human beings worry potential loss greater than they worth potential acquire, and can make choices accordingly and solely considerably rationally. Affirmation bias (the tendency to disregard data that contradicts one thing you consider and take into account authoritative what does help your beliefs), availability bias (considering that what your mind rapidly offers as examples is statistically legitimate for the world), and familiarity bias (no matter you’ve heard or seen a couple of instances being thought-about higher and extra dependable than something novel) all play an element too.

As Liebreich says, it should take till 2030 for the hype to die down, as a result of that’s how lengthy it takes to deprogram a cult.