You may not have noticed it on your heating bill yet but oil isn't the only fossil fuel that is getting cheaper these days.

Last week natural gas prices plunged to 14 year year lows, hit by a decline in industrial demand and warmer-than-expected weather, which means residents are burning less gas to heat their homes. Producers are suffering.

But as the world starts to take global warming more seriously in the wake of the Paris climate talks, the longer term prospects for natural gas — or fossil methane — may be the brightest of any of Canada's fossil fuels. And one of the reasons for that bright future is hydrogen. 

It is well known that burning natural gas is a relatively clean way of producing energy compared to other fossil fuels. According to the U.S. Energy Information Administration, electricity produced by burning natural gas produces significantly less carbon dioxide than diesel generators and about half as much as coal.


The Toyota Mirai fuel cell sedan is powered exclusively by hydrogen. Most of the world's hydrogen still comes from natural gas. (Reuters)


Natural gas can be used in three different ways to power a car. It can be burned like gasoline in an internal combustion engine, considered less polluting than gasoline or diesel powered cars. It can be used to make electricity which is then used in a battery powered car.

Cleaner than battery-powered

But according to Richard Chahine at Trois Rivieres Hydrogen Research Institute, there is a third way that is even more carbon efficient. That is to extract hydrogen from natural gas using conventional methods and use it in one of the new hydrogen powered cars being sold around the world.

"Even if you use natural gas as a source of hydrogen but you run that hydrogen into a fuel cell car, you still are reducing CO2 emissions by about 65 per cent compared to combustion engines," says Chahine.

But better than batteries?

Electric cars and hydrogen cars are both virtually pollution free when they are operating, but when considering the entire energy life-cycle, battery powered vehicles are often more polluting. That's especially true in a place like the U.S. where so much electricity is produced by burning coal.


This year Austria opened its "wind2hydrogen" plant, a pilot project to produce hydrogen from wind. But natural gas remains by far the biggest and cheapest source of the clean burning fuel. (Reuters)

Chahine says the conversion efficiency of hydrogen fuel cells means running a car on hydrogen is a better bet even when that hydrogen is extracted from natural gas using relatively high-energy steam methane reform (SMR) conversion.

Of course it is more carbon efficient to produce electricity from wind or solar. We already know how to make hydrogen with green electricity, using electrolysis to separate water into its constituent molecules of hydrogen and oxygen. But so far, electrolysis is expensive and the vast majority of hydrogen still comes from methane.

Mature technology

"Eighty-five per cent of the world's hydrogen production is based on this technology and, believe me, hydrogen has many other users in the chemical industry," says Chahine. "They produce millions of tonnes a year, so this is a very mature technology."

While researchers are trying to make that process more efficient, any gains are likely to be small.

That's why researchers are now trying to invent new methods of separating hydrogen from natural gas that are more efficient and actually extract the carbon before it is burned.


A hydrogen dispensing pump is seen at the 2016 Toyota fuel cell Mirai display at the press day for the Washington Auto Show on Jan. 22, 2015. (Reuters)

A new process invented in Germany called methane cracking using molten tin extracts hydrogen leaving a residue of solid carbon powder. The process was profiled recently in The Economist. The scientists say they are three years away from an industrial prototype.

As always, the move from invention to commercial production is fraught.

A Canadian startup, New Brunswick-based Atlantic Hydrogen, had a carbon free system of its own to crack methane using microwave plasma, but the company went broke this autumn before it could create a commercial-sized facility.

Axel Meisen, who analyses the potential future of scientific developments especially in the energy sector, sees a long-term advantage for Canadian natural gas if these technologies become competitive. That could be helped by higher carbon pricing.

However, he sees one additional barrier to the carbon extraction process.

Carbon as fertilizer?

"An important issue is what to do with the carbon," says Meisen, formerly at Alberta Innovates.

Another researcher, David Fletcher, Chief Technology Officer at the small Montreal-based startup CarbonTwice, thinks he has that one licked. Fletcher says he has a way of turning the carbon into a fertilizer "where the carbon components remain in the ground indefinitely."

He imagines a related process could be used for extracting carbon-free hydrogen from the oil sands.

In Vancouver, arguably the birthplace of the modern hydrogen fuel cell, Walter Merida is the director of UBC's Clean Energy Research Centre. Merida says that in early stage research, hydrogen is hot.

He describes a long list of of inventions including a process that uses visible light to separate water into hydrogen and oxygen. Like fuel cells, electrolysis production units are shrinking in size.

But the problem remains cost.

"The economics of the technologies is not enough to make them competitive with extremely inexpensive fossil sources," says Merida.

Until those costs come down, producing hydrogen from methane in the most efficient way possible, and using it in fuel cells, remains one of the most carbon efficient methods of powering transportation.

Natural gas may be cheap now, but a hydrogen fuel cell boom led by powerful manufacturers like Toyota, could significantly expand the green market for Canada's fossil methane.

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