There is nothing new to report from the geopolitical hotspots, really. Traffic through the Strait of Hormuz remains limited, and the appetite for negotiating some kind of truce, or indeed any truce at all, is severely suppressed. The US President threatens ‘economic warfare’ on Iran and grave repercussions for anyone who supports it. Ukrainian attacks reduce Russian exports and make the country a net product importer. The upside bias is still intact, although the wind may have been taken out of the bulls’ sails, to some extent, by the EIA’s weekly statistics, which showed increases in crude oil and gasoline inventories and a hefty jump in commercial stocks, while distillate stockpiles drew. Favourable refining margins are incentivising US refiners to ramp up runs, with crude input at 17.4 mbpd, the highest level since 2019.

The story of the day was rising anxiety about inflation. With US long-dated bond yields scaling 19-year highs, the US Treasury announced that it would double its purchases of long-term government debt in an effort to support liquidity. The latest Fed minutes from last month’s meeting, at which rates were kept unchanged, showed elevated concerns about sticky inflation among monetary policymakers. Rate rises cannot be ruled out this year. Their potential impact on oil will be discussed in tomorrow’s note.

There are alternatives to alternatives

We read with interest the recent goings on at the Bonneville Salt Flats in Utah, USA. While it does not compare with the official land speed record (LSR), which currently stands at 763.035 mph (1227.985 kph) held by British pilot and driver Andy Green, who broke the sound barrier on land on October 15, 1997; his new record last week in a hydrogen-fuelled internal-combustion vehicle once again brings into question whether electric vehicles are the only future. In an old-fashioned feat of derring-do, Green smashed past the previous Fédération Internationale de l’Automobile (FIA) record and registered 406.320 mph (653.909 kph). The appropriately named Mr Green, a former pilot for the Royal Air Force, said, before his successful attempt, that a land speed record effort showcased the power of hydrogen as a clean-energy alternative. It’s the “fuel of the future,” Green told The Associated Press in July, and after his successful record taking announced, “this is as zero carbon as it gets,” as no exhaust fumes could be seen leaving the vehicle, with assurances that the only by-product waste was water. He drove his appealingly named ‘Hydromax’ on behalf of the British machinery company JCB, who later said they were planning to use hydrogen engines in future products.

It is a laborious task to produce hydrogen fit enough to run engines. The cheapest method is steam methane reforming (SMR). The process is to introduce methane to steam, producing hydrogen and carbon. One of the biggest setbacks for this process, one that negates any clean fuel benefit, is that if carbon capture is not used, then the process is very pollutive. Another method is that of water electrolysis. Electric current is used to split water, and the individual constituents of hydrogen and oxygen are harvested. In a situation where the electricity used is generated from nuclear, solar or wind sources, then the process has zero emissions. However, it takes an inordinate amount of power to achieve a parting of the water molecule; therefore, the process is expensive when compared with SMR. Lastly, heating coal or other biomass feedstock and condensing the hydrogen released, or gasification, is almost pointless unless, again, carbon capture can be assured.

Hurdles indeed, and the process of driving engines with hydrogen is also no mean feat. Compressed hydrogen is pushed through fuel cells where a membrane filters hydrogen protons, producing electricity to drive a motor, not dissimilar to current EVs. But at present, the batteries powering motors in EVs are more efficient than hydrogen. There is a two-fold deficiency in hydrogen: the amount of electricity used in producing it and the amount wasted when returned to a proton form within a vehicle, whereas electricity is sent directly into an EV’s battery. For cars, hydrogen is nowhere near attractive yet. The problems with infrastructure seen in electrical charge points across the globe are tough enough to navigate; with hydrogen still being a specialist fuel, the options for refuelling are minuscule in comparison. There is of course, the advantage of also being able to charge EVs at home.

However, before we consign hydrogen into the remit of boondoggle, there are developing reasons why the potential of hydrogen will not go away. Motorsport is always the innovator for change in personal vehicles, and it has yet to wash its hands of hydrogen. Land speed records aside, and while no hydrogen car has yet to compete at the Le Mans 24-Hour race in France, a formal hydrogen class of vehicle is slated for 2030 by the FIA after a successful and high-profile demonstration at the Circuit de la Sarthe in June of this year. If ever hydrogen gets to creep into the consciousness of retail consumers, it will not be before it does so with industry. The prodigious weight of, and time taken to charge, batteries will never be a fit for buses, trucks and ships in particular, which cannot charge at sea. With the push for greener credentials in all types of mass transit and industrial purposes, hydrogen is a better fit.

As with all types of commerce and industry, practice makes perfect and with a growing awareness of the benefits of hydrogen in the puzzle for a greener planet, its use will likely become more commonplace. Battery-powered cars are winning out at the moment; however, they are just a mining switch from oil to lithium and with their manufacture and decommission producing more carbon emissions than internal combustion-engined cars. While this is compensated by the zero emissions produced when driving, and the second-life use of car lithium batteries for other electrical storage, the prospect of problematic toxins, including heavy metal pollution when eventually disposed of is of real concern and one not yet fully realised. The gestation period of when hydrogen as a fuel alternative will be a long one, but with the ever-so-attractive selling point that the only by-product from its use is water, the most abundant element known to science is never worth ignoring.

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