Stephen Jewkes, Vera Eckert and Isla Bnnie

(Reuters) – As leaders around the world reached a compromise to reduce climate change last week, Michele Ricciardi, a gas engineer was examining a problem. How many miles of pipes across Europe and Italy can carry hydrogen safely?

Italian gas carrier, Gas Carriers is leading efforts for lower carbon. After countries have shifted away from natural gas, they want pipelines to be repurposed to transport zero-emissions hydrogen.

Nearly twenty-six companies made the effort to show the rapid rate of planning in the oil and gas industry. From drillers and refiners to those who need to be adaptable to rising environmental pressures. In addition to practical preparation, this transition places firms in competition with other funding sources while investing billions of euro into markets they cannot predict.

Italy’s hydrogen project Snam SpA (OTC:), Spain’s Enagas S.A. and Germany’s Open Grid Europe (OGE) among others – would rely on vast solar farms as far flung as the Sahara desert to create the energy needed to produce hydrogen from water.

That fuel would then be piped to Europe’s industrial heartland along the existing web of natural gas pipelines – a 198,500 km (123,300 mile) network that, if untangled, could encircle the equator four times.

Ricciardi’s boss Marco Alvera (chief executive at Snam), told Reuters that once we have the Sahara sun in German factories… it’s like Roman roads we’re still walking on today.” “It’s forever.”

To prevent pipelines becoming “stranded assets”, the companies plan to create a European Hydrogen Backbone. According to them, 69% can be converted into 81 billion euro ($94 billion).

It is one of the hundreds of projects to create a hydrogen economy. According to the European Union, this could mean investments up to 460billion euros in 2030.

Europe might benefit from the creation of a hydrogen supply system. The European bloc is currently dependent on natural gas for 28%, and Russia supplies a third. Recent accusations by politicians have been made against Moscow for limiting supplies, as record gas prices have risen. Russia insists that it meets all contractual requirements.

Frans Timmermans (European Commissioner for Climate Action), said that he believes it is a great idea. He said that adapting existing natural gas networks for hydrogen transport is only 25% more expensive than building new infrastructure.

However, the European Union does not offer financial support for this venture. This must be provided by the industry or the national government. It will therefore require industrial and political support.

To succeed, the gas grids need to be able to direct hydrogen blended with natural gas to the customers who can use it – like steelmakers, chemical companies and refineries. Supply must be secure and in sufficient quantities to allow it to be accessible at affordable prices.

The auto industry, as well as home heating providers may use green hydrogen eventually if it can be produced in great quantities. However, this wouldn’t happen until 2030 according to studies.

Gas grid operators say that their greatest challenge right now is Europe’s inability to provide a legal framework to allow for the adaptation of the network. Maria Sicilia from Enagas, the strategy director, said that regulations must define hydrogen as something that can be transported and used like natural gas. The regulation should set the standards for interconnecting networks, she stated.

VOLATILITY

Hydrogen, which is a major element found in all of nature, is most commonly bound to oxygen in liquid water. It is also the most combustible element. Many hydrogen-powered airships have exploded and burned in the past. This includes the 1937 Hindenburg Fire.

Snam, along with other companies, claim that their industry is well-versed in building infrastructures and has many decades of experience. Therefore, hydrogen does not need to be more dangerous than any other fuels. According to Zukunft Gas (a German gas lobby), hydrogen can leak into the air and rises rapidly, but its explosive concentration is quickly below that level.

Ricciardi, along with his team, have spent three years searching Europe’s most extensive gas transportation network for gas handling capabilities. They are located in Milan’s crucial gas-flow room. Snam stated that it will spend over 3 billion Euros on gas pipelines replacements that comply with hydrogen standards.

Ricciardi says, “We have been moving natural gas around over the past 80 years.” His job is to set standards for industry to ensure safe pipes. Now we have to do it using hydrogen.

Flammability can be a problem. Because hydrogen molecules are smaller than those of natural gas, it leaks much more readily. Because hydrogen has different flow patterns, it can even attack some types of steel and make them more brittle.

There will be different changes depending on the gas grid. However, companies need to inspect their pipes thoroughly to verify that they are sound and sealed properly. Some compressor stations may require adaptations. Installations with sensors will allow them to detect and vent leaks.

Oil and other industries use hydrogen to make their products. Germany is home to about 10% of the world’s hydrogen resources, mainly in steel and chemical production. However, this gas is produced using fossil fuels. It is called “grey hydrogen”. [nL4N2S72U5].

Four lines connect Algeria, Morocco Libya, Tunisia, and Spain to the existing pipeline network.

Ad van Wijk (Delft Technical University Professor of Future Energy Systems) said that the problem is now that natural gas is filling it. He said that “the backbone” is in place. He supports linking Europe to Africa in order for Europe to have a system of energy that is 50% renewable energy, and 50% hydrogen.

Another concern is the cost. However, hydrogen “green”, as it is called, has only been used in experimental research. Producing it costs up to four-five times as much as the gray variety.

This will allow the consumers and industry to reduce costs by increasing production and demand.

Alvera of Snam says that solar panels can be found in parts of southern Spain and the Sahara, as well as the Middle East. These renewable energy sources are used to generate cheap electricity for electrolysis plants. The hydrogen is then pumped into the pipes. According to the industry association Solar Power Europe Spain, is one of Europe’s most affordable places to generate renewable electricity. However, costs will continue to drop.

The companies also claim they can transport natural gas produced from fossil fuels with the emission captured, a process known as “blue hydrogen”.

Thomas Deser (a top portfolio manager at the large German fund Union Investment) is skeptical. His belief is that green hydrogen can only be produced if there are no subsidies before the mid-decade.

RIVAL CLAIMS

Now, the hydrogen backbone competes for state funds. Germany is Europe’s largest energy consumer. Berlin pledged to invest 9 billion euro in green hydrogen industries by 2030. Two billion have been earmarked for boosting imports from countries like Australia, Chile, Saudi Arabia, and Chile.

However, electricity is a fast-growing and relatively unrestricted source of power. Germany has a growing electricity transmission network. Germany intends to invest 1 billion Euros in electric vehicle charging infrastructure by 2025, and hundreds of millions more for purchasing premiums or tax breaks.

Wolfsburg’s Volkswagen AG (OTC) is the country’s largest automobile manufacturer by volume. Although car companies are working on prototypes for hydrogen-powered fuel-cell vehicles, European automakers do not consider hydrogen to be their primary source of power.

VW has already invested billions in battery-based electric vehicles technology. It stated to Reuters that it believed large scale changes in the power of mobility should occur. VW CEO Herbert Diess tweeted May, saying that the “hydrogen car” was not the solution to climate change and that electrification had “established itself in traffic”.

However, there is a growing demand for hydrogen: According to McKinsey and the Hydrogen Council, global announcements of 359 large-scale hydrogen projects were made by July 2021.

Snam claims it tested the use of 30% natural gas with hydrogen at an Italian steel plant.

Ricciardi, Milan: It is difficult to increase blending rates. Standards are important.

Ricciardi explained that the team is working to create a new rules book in order to improve the network’s performance. There’s much riding on this.

($1 = 0.8648 euros)

Reporting from Vera Eckert, Stephen Jewkes, and Isla Bnnie, Madrid. Edited and edited by Richard Valdmanis, Veronica Brown and Sara Ledwith.