Sustainability: The relationship between upstream operations and blue hydrogen production

 MAURITS VAN TOL, Catalyst Technologies/Johnson Matthey 

Fig. 1. Image: Johnson Matthey.

The global shift towards decarbonization has positioned hydrogen, particularly blue (CCS-enabled) hydrogen, as a key solution for reducing carbon emissions in hard-to-abate industries, Fig. 1. As a low-carbon energy carrier, blue hydrogen plays a critical role in the energy transition. A pivotal aspect of blue hydrogen production is its symbiotic relationship with upstream oil and gas operations. This article explores how blue hydrogen is produced, its dependence on upstream operations, and the role of the oil and gas sector in facilitating its expansion. 

WHAT IS BLUE HYDROGEN? 

Hydrogen is typically classified by color, based on its production method. The main types are: 

• Grey hydrogen. Produced through steam methane reforming (SMR), where natural gas (methane) is reacted with steam to produce hydrogen and carbon dioxide (CO₂). The CO₂ in this process is released into the atmosphere, contributing to greenhouse gas emissions. Most of the hydrogen produced today is grey hydrogen. 
• Blue hydrogen. Produced through reforming technologies like steam methane reforming (SMR) or auto thermal reforming (ATR) but with the addition of carbon capture, utilization, and storage (CCUS) technologies to prevent CO₂ emissions. By capturing and storing CO₂, blue hydrogen significantly reduces the carbon footprint of hydrogen production, making it a crucial bridge in the transition to cleaner energy. 
• Green Hydrogen: Is obtained by electrolysis of water powered by renewable electricity sources.  

While these color codes are generally used to describe the origin of hydrogen, it should be noted that the most important factor relating to decarbonization is the carbon intensity of the production. While green hydrogen is often cited as the cleanest source of hydrogen, as it is produced through renewable electricity and not using fossil fuels as feedstock, it is not yet widely available at scale and blue hydrogen with high carbon capture rates can often offer the same levels of carbon intensity. The technology to produce blue hydrogen is available today at large scale, which may suggest it is a more viable option for nearer-term decarbonization. 

THE ROLE OF UPSTREAM OIL AND GAS IN BLUE HYDROGEN 

Blue hydrogen production relies heavily on natural gas, a primary product of upstream oil and gas operations. The upstream sector, responsible for the exploration, extraction, and initial processing of natural gas, provides the essential feedstock for blue hydrogen generation. There are several key areas where upstream operations intersect with blue hydrogen production: 

1. Natural gas supply: The fundamental feedstock for blue hydrogen production is methane, sourced from natural gas fields. SMR, the primary process used in blue hydrogen, requires a stable and abundant supply of natural gas. Regions rich in natural gas reserves are, therefore, well-positioned to become hubs for blue hydrogen production. This includes areas like the United States, the Middle East, and the UK, where upstream operations provide a vast supply of methane for conversion into hydrogen​. 
2. CO₂ storage and utilization: Blue hydrogen's low-carbon credentials depend on the capture and storage of CO₂ produced during the reforming process. Here, the upstream oil and gas industry plays a crucial role. Depleted oil and gas wells, particularly those found in mature oil fields, offer ideal geological formations for CO₂ storage. These reservoirs can securely hold large quantities of captured CO₂, preventing it from being emitted into the atmosphere. This integration of hydrogen production and CO₂ sequestration in upstream wells is key to enabling low-carbon hydrogen projects​​. 
3. The UK is currently a leading region for blue hydrogen projects, thanks in part to its favorable geology. Depleted North Sea oil and gas wells are being repurposed for CO₂ storage as part of the country’s efforts to decarbonize its industrial base using blue hydrogen technologies​. 
4. Pipeline Infrastructure: Existing oil and gas pipeline networks, originally built to transport fossil fuels, can be leveraged to distribute hydrogen and captured CO₂. Blue hydrogen plants need access to both methane feedstock and CO₂ transportation networks for effective operation. The repurposing of natural gas pipelines for hydrogen transport is seen as a cost-effective way to distribute hydrogen across regions. Similarly, CO₂ pipelines, connected to storage sites in depleted fields, are essential for delivering captured emissions to sequestration sites​. 

LOW CARBON HYDROGEN TECHNOLOGY 

Johnson Matthey (JM) plays a crucial role in blue hydrogen production through its LCH™ technology (Fig. 2) that uses either Autothermal Reforming (ATR) process or Gas-Heated Reformer (GHR) coupled with ATR. ATR is a process that reacts hydrocarbons, such as natural gas, with oxygen and steam to generate synthesis gas (hydrogen, carbon monoxide, and CO₂). When it is coupled with GHR technology, it minimizes natural gas usage, achieves high efficiency and produces 18% less carbon to capture and store^{1 1}at the end of the process, compared to conventional steam methane reforming process.  This technology adds high value to blue hydrogen and low-carbon ammonia projects, due to its process and cost efficiency while aligning with decarbonization goals by capturing CO₂ produced during the process​. 

Fig. 2. Johnson Matthey has an important role in blue hydrogen production through implementation of its LCH™ technology that uses either Autothermal Reforming (ATR) process or Gas-Heated Reformer (GHR) coupled with ATR. Image: Johnson Matthey.

ATR is highly flexible, allowing various feedstocks like natural gas and biogas, and can integrate seamlessly into industrial applications like refineries and petrochemical plants. It can also capture up to 99% of CO₂ emissions during hydrogen production, making it a natural fit for the circular carbon economy. This reduces emissions while supporting large-scale hydrogen demand​. 

SYNERGIES AND CHALLENGES IN BLUE HYDROGEN DEVELOPMENT 

The integration of upstream operations and blue hydrogen production presents both opportunities and challenges. On the positive side, upstream oil and gas companies are already equipped with the expertise, infrastructure, and capital to support large-scale blue hydrogen projects. This includes established methane supply chains, existing pipeline infrastructure, and CO₂ storage sites, which together reduce the need for new infrastructure investments. 

Additionally, the oil and gas industry’s move into blue hydrogen aligns with its long-term business interests by allowing companies to continue monetizing natural gas while simultaneously reducing upstream (methane) and total GHG emissions. EU-US launched Global Methane Pledge (GMP) in 2021 at COP26 to slash methane emissions by 30% globally by 2030. In March 2024, it had 158 participants.² Meeting the GMP would reduce methane emissions to a level consistent with 1.5°C pathways, as it has the potential to reduce warming by at least 0.2°C by 2050.²  

Meanwhile, the Oil & Gas Methane Partnership 2.0 (OGMP 2.0³³), the United Nations Environment Programme’s flagship oil and gas reporting and mitigation program, aims to improve the accuracy and transparency of methane emissions reporting, which is key to methane mitigation in the oil and gas sector. OGMP 2.0 now represents over 120 companies with assets in more than 60 countries on five continents, and covers over 35% of the world’s oil and gas production, as well as over 70% of LNG flows.   

For many oil and gas majors, blue hydrogen represents a way to diversify their portfolios and participate in the energy transition without completely abandoning fossil fuels. 

However, several challenges remain: 

• Policy and regulatory barriers. Expanding blue hydrogen production requires robust regulatory frameworks that support carbon capture and storage (CCS) and incentivize low-carbon hydrogen. Governments must provide clear and stable policy signals to encourage investment in CCUS infrastructure and hydrogen projects. 

• Infrastructure bottlenecks. In some regions, there is insufficient pipeline capacity to transport natural gas or CO₂. For example, in the northeastern U.S., shale gas fields face pipeline shortages that limit the potential for blue hydrogen projects. This requires either new pipeline construction or retrofitting of existing networks​. 

• CO₂ storage capacity. While many regions are geologically suitable for CO₂ storage, not all blue hydrogen projects will have access to nearby storage sites. Long-distance CO₂ transport, whether by pipeline or ship, adds complexity and costs to the hydrogen supply chain. 

FUTURE PROSPECTS: CONVERGENCE OF FOSSIL FUELS AND LOW-CARBON HYDROGEN 

Blue hydrogen sits at the intersection of traditional fossil fuels and the emerging low-carbon economy. For upstream oil and gas companies, this convergence offers a way to participate in the energy transition and decarbonize hard-to-abate industries. In the near term, blue hydrogen will play a key role and continue to grow in regions with abundant natural gas supplies and suitable CO₂ storage sites. 

Over the long term, as demand for clean energy solutions increases, upstream companies may increasingly pivot towards blue and green hydrogen production. This transition represents both an opportunity and a challenge for the industry, as it seeks to balance the twin objectives of providing reliable, clean energy and reducing its carbon footprint. 

In conclusion, blue hydrogen production is intimately tied to upstream oil and gas operations, relying on natural gas extraction, CO₂ storage, and existing pipeline infrastructure. As governments and industries accelerate their decarbonization efforts, the role of blue hydrogen and its dependence on upstream operations will become even more significant. By leveraging their existing assets, upstream companies can play a pivotal role in the energy transition, facilitating the widespread adoption of low-carbon hydrogen and supporting global climate goals. 

REFERENCES 

1. JM internal studies; SMR data source: IEAGHG Technical Report 2017-02, with SMR+CCS data source: NETL Technical Assessment 2023-12.​
2. https://www.globalmethanepledge.org/
3. https://unenvironment.widen.net/s/mcjrs5md7t/ogmp-brochure-2023-digital-1

About the author

MAURITS VAN TOL is Chief Executive of Catalyst Technologies and member of the Executive Committee at Johnson Matthey Plc, a global leader in sustainable technologies. He joined Johnson Matthey in 2019 in the role of Chief Technology Officer and member of the Executive Committee, accountable for innovation delivery and research and technology development globally.  

Before moving to the UK to join Johnson Matthey, Mr. van Tol was the Senior Vice President for Innovation and Technology at Borealis AG, based in Austria, since 2012. He was also responsible for shaping the Circular Economy business for Borealis and was a member of the company’s managing board responsible for the Plastics business. Prior to joining Borealis AG, he spent 19 years with Royal DSM NV in The Netherlands in a wide variety of R&D, Innovation and Business Management roles.  

Mr. van Tol has a PhD in Catalysis and an MSc degree in Physical Chemistry and Catalysis, both from Leiden University, The Netherlands. Parts of his studies were also performed at the University of East Anglia (UK), and UC Berkeley (U.S.). He is a member of the Board of Trustees of the Faraday Institution in the UK and an expert advisor to the UN Industrial Development Organization and Tsinghua University joint undertaking IHEC (International Hydrogen Energy Centre). He also serves on the C2V Carbon to Value Carbontech Leadership Council (CLC), an invitation only group of corporate, non-profit, and government thought leaders who foster commercialization opportunities and identify avenues for technology validation, testing, and demonstration in, for example, carbon capture and use. He joined the Royal Society Science, Industry and Translation committee in 2023. Mr. van Tol has a passion for sustainability and cleantech and has 18 patents to his name, and over 30 publications. His research has won awards from Leiden University and the Royal Dutch Chemical Society.