The “decarbonised energy” investment portfolio of Energy Impact Partners (EIP) includes what the US-based investor describes as the “dark horse” of the much-hyped hydrogen revolution.
EIP is referring to the promise of natural hydrogen (also dubbed geologic, native, white or gold hydrogen) where hydrogen gas is extracted directly from the earth’s sub-surface, at potentially very cheap cost and in incredibly large quantities.
EIP is part of the “smart money” – that includes Bill Gates’ Breakthrough Energy Ventures (BEV), Jeff Bezos’ Climate Pledge Fund and Khosla Ventures – that placed early bets on Koloma, a US company Koloma developing technology to identify, access and produce natural hydrogen.
Late last year traditional investors Mitsubishi Heavy Industries (MHI) and Osaka Gas opened their wallets and joined them.

Meanwhile, Andrew Forrest’s Fortescue has just completed the acquisition of a 39 per cent stake in ASX-listed, Kansas-focussed natural hydrogen explorer Hyterra.
The investment is significant as it perhaps signals a new approach to hydrogen by Forrest after Fortescue scaled back, postponed or withdrew from a number of “green hydrogen” projects last year.
Fortescue, Hyterra and Koloma are also supporting a program set up by the Colorado School of Mines and the US Geological Survey (USGS) to study natural hydrogen’s potential. Other program funders include heavyweights BP, Chevron and Brazil’s state-owned Petrobras.
Hydrogen riches
Last month a research article by two USGS geologists estimated that the “most probable predicted in-place resource of hydrogen” was around 5.6 trillion tonnes.
The article Model predictions of global geologic hydrogen resources (Ellis and Gelman 2024) also said “it is likely that recovery of most subsurface hydrogen can be expected to be in accumulations that are too deep, too far offshore, or too small to be economically recovered”.
However, recovering even a small amount of this resource would be very significant. “The global demand for hydrogen is projected to reach ~500 Mt a year by 2050 and recovery of just 2 per cent of the estimated most probable in-place resource would meet the entire projected global hydrogen demand for around 200 years,” the authors said.
The article in Science Advances also said “it is possible that natural hydrogen production could be stimulated to increase the rate of generation, or induce generation in settings where it has the potential but is not naturally doing so”.
For example, water could be injected into iron-bearing rock to induce chemical reactions as per the diagram below.

The article also noted, “several recent studies have claimed that natural hydrogen generation rates are rapid enough to potentially offset anthropogenic extraction rates from reservoirs, thereby constituting a renewable resource”.
Discussing natural hydrogen, BEV’s Dr Eric Toone recently said: “Make no mistake, this is the most important discovery in energy in our lifetime and probably the most important discovery and energy in our children’s lifetime.”
Toone obviously thinks natural hydrogen is a “fancied runner”. However, to date, the only operational natural hydrogen project is the world is the Bourakébougou field in Mali, delivering electricity to a small village (and producing less power than a single wind turbine).
Seven orders of magnitude
Ellis and Gelman admit “the estimated amount of in-place hydrogen in the Earth’s subsurface is highly uncertain, varying over seven orders of magnitude”, but what is a few trillion tonnes between friends?
They acknowledge that “a ready supply of low carbon hydrogen will only make a meaningful contribution toward meeting net-zero carbon emission goals if it can be developed in years or decades rather than centuries.
“Although not a perfect analog, the experience of US shale gas resource development suggests that geologic hydrogen could begin to make a substantial contribution to the global energy supply within decades,” they said.
Their article stresses “the model makes no predictions about the distribution of the hydrogen in the subsurface, which is critical for the economic viability of any potential resource”. In other words, we don’t know exactly where all this hydrogen is actually located.
One way to identify possible hydrogen accumulations is to use satellite imagery to locate circular depressions in the earth’s crust known as “fairy circles” that seep hydrogen at their peripheries.
What might be of particular interest to Fortescue is that in the vicinity of banded iron formation (BIF) hosted iron ore mines in Australia satellite imaging has also revealed “sub-circular depressions’ that suggest the presence of hydrogen.
Racing colours
So is natural hydrogen worth a flutter? It does seem appealing compared to other hydrogen pathways (see diagram below).
At US$1.00 per kg or less, estimated production costs for natural hydrogen are much lower than for other low-emission (green and blue) hydrogen productions (although cost estimates are mainly based on the tiny Mali project).

Using renewable power and water to produce hydrogen costs between US$3.00 and US$8.00 per kg while producing hydrogen with natural gas and heated water (and capturing the by-product CO2 ) costs about US$4 a tonne.
The oil and gas lobby has been vigorously promoting “blue hydrogen” on the likely false premise/promise the resultant CO2 produced would be geologically stored.
However, the fact is that very little progress has been made in the past 15 years in making projects requiring carbon capture and storage (CCS) commercially viable.
Currently, nearly all of global hydrogen production is derived from unabated fossil fuels.
A brief form guide is provided below for asset owners disinclined to do their own deep due diligence.

Majors surveying the field
The International Energy Agency (IEA) notes there has been a surge of interest among prospectors in various locations including northeast France, Australia (e.g. Yorke Peninsula, Perth Basin, Yilgarn Craton), Spain, Morocco, Brazil and the US (e.g. Nebraska, Arizona and Kansas).
An IEA paper Gold, Geologic, White, Native, Hidden, Natural Hydrogen: Does Earth hold extensive stores of untapped, carbon-free fuel? says “major oil companies are currently adopting a wait-and-see approach, allowing independent explorers to undertake the pioneering and risky exploration work”.
However, you can bet the majors are watching very closely as natural hydrogen seems to give them a role to play in global decarbonisation efforts if they apply their money and their relevant petroleum exploration expertise to this endeavour (rather than pushing blue hydrogen/CCS).
(Interestingly, former Woodside Petroleum chief executive Peter Coleman is now chairman and a shareholder of South Australian natural hydrogen explorer H2EX.)
The risk here is that if the industry does not focus on identifying sites with very high hydrogen concentrations the “natural hydrogen” projects they promote may be coal-bed methane projects in disguise where hydrogen is just a by-product.
It should also be noted that while hydrogen is not directly a greenhouse gas its chemical reactions do change the abundances of the methane in the atmosphere. So if hydrogen leaks or escapes while being extracted this could be a problem.
Is all that glitters gold?
The Oxford Institute for Energy Studies says “finding a sustainable alternative to manufactured hydrogen that is cheaper than green and blue hydrogen and does not face their challenges of intermittency or CCS-related social opposition could be a game-changer”.
In a report, Natural (geologic) hydrogen and its potential role in a net-zero carbon future: Is all that glitters gold? (Patonia et al 2024) the Institute says it is not surprised by the interest in natural hydrogen, given “enthusiasts’ claim that it can potentially be produced with almost no carbon emissions and at a cost below US$1/kg, which is very similar to or even lower than the conventional manufacturing of “grey” and “brown” hydrogen”.
However, despite this build-up, the report concludes “the role of natural hydrogen in achieving net zero was a ‘low-probability, high-impact scenario’ due to the uncertainties around its origination and accumulation mechanism”.
Kansas betting splurge
Last month another ASX-listed company Top End Energy (TEE) announced the “transformative” acquisition of Serpentine Energy, which owns a natural hydrogen project “at the heart of a land rush in Kansas”.
This means Hyterra, TEE and an intriguing company called High Plains Resources are now all searching for natural hydrogen in the same part of Kansas. High Plains has been particularly active (see map below).

TEE describes High Plains as “a ‘stealth-mode’ operating company” and there is speculation High Plains may be associated with Koloma, which has raised about US$350 million ($563 million) in equity over the last couple of years.
In a neat coincidence, live horse racing will soon be returning to Kansas and legislation has been passed in the state allowing Historical Horse Racing (HHR) slot machines – where punters place wagers on horse races that have already been run.
(This has, by the way, opened fresh opportunities for North American HHR market leader, the ASX-listed Ainsworth Game Technology).
Whatever your views on natural hydrogen, punting on a hydrogen hopeful seems more attractive than losing money on a horse race that may have been run 30 years ago.