October 23, 2024 [H2 View]- Two US firms are planning on using natural gas produced from oil extraction to produce blue hydrogen.

Stranded natural gas is typically co-produced alongside oil but is either uneconomical or logistically challenging to capture and transport.

In most cases, where natural gas is produced alongside oil but not used, companies flare it off or vent it into the atmosphere, producing carbon dioxide (CO2) or methane – both potent greenhouse gases (GHGs).

However, New York-based investor Double Zero Holdings and Houston-headquartered hydrogen sulphide removal firm SJ Environmental (SJE) have announced plans to use the gas to produce blue hydrogen.

With promises of mitigating both methane and carbon dioxide (CO2) leaks from the deposits, if left untouched, the duo intends to use existing reforming and carbon capture technologies to produce the low-carbon energy carrier.

“This collaboration allows us to turn stranded natural gas – a significant environmental liability – into a valuable resource, supporting the global shift toward cleaner energy,” claimed Raja Ramachandran, Managing Partner of Double Zero.

However, it seems as if hydrogen won’t be the only product in the sights of the collaboration.

SJE Director, John Chappel, said, “Together, we’re setting a new standard for energy production, delivering hydrogen and food-grade CO2 where natural gas would typically be flared.”

The plans emerge as concerns grow that the US’ potentially lucrative 45V hydrogen production tax credit, could inadvertently increase upstream methane emissions in some blue hydrogen projects by applying a national average, which may penalise projects with lower methane leakage rates.

While the Double Zero and SJE plans could effectively reduce the methane and CO2 emissions from oil extraction projects, they are likely to face criticism due to the potential of extending the life of fossil fuel projects.

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