Hemp is a wonderful plant, as advocates of it will assure anyone who will listen to them for more than 5 seconds. In my local organic grocery, there are hemp-based lotions, hemp-based breads, and hemp-crackers. I’m sure there’s hemp toilet paper in there too. (It’s actually a great store and I buy most of my groceries there, but nothing with hemp in it.)
Hemp is an incredibly versatile plant. It’s a jack of all trades. If I was stranded on a desert island, I’d want hemp seeds. You can make rope, clothes, food, and oils out of it. It’s apparently good for skin irritations, inflammation, and rheumatoid arthritis. You can make sails from it. You can make paper from it. Heck, you can make lighting oil from it.
As one very excited market report said, the 2020 global market share for industrial hemp was $5.6 billion. It’s a useful agricultural product, and it’s still used for a bunch of stuff.
But here’s the thing: Our world runs on specialization, not generalization. If a country is really good at making cars, and mediocre at making wine, but the country next door makes mediocre cars and great wine, they are really better off doing what they are good at. And the same is true for materials and plants.
Hemp rope is good. Next to nobody uses it anymore because other plants make cheaper, better rope, and artificial fibers make absurdly strong, much lighter rope with characteristics like longevity and variance of stretchiness that make them excellent for different applications. Want to climb? Don’t use hemp rope. Want to tie ships up? Don’t use hemp rope.
Hemp oil works as a cooking oil. Avocado oil, walnut oil, and olive oil are all better along various vectors of better, but certainly flavor and mouth feel.
Hemp cloth is okay too. Next to nobody uses it anymore because cotton is vastly better for making cloth. It makes clothes that are a lot less like wearing a burlap bag and it’s cheaper for the purpose. And that’s before synthetics that wick, breathe, and stretch.
Hemp sails were amazing for a long time. Now no one uses hemp for sails because modern sail material is vastly better.
Hemp as a topical treatment for inflammation is okay too. But tubes of anti-inflammatory creams you get over the counter at drug stores are better. They are more convenient, more effective, cheaper, and last longer in the tube. Heck, other natural remedies are a lot better than hemp.
Etc. Etc. Etc.
Hemp can do a lot of things adequately, but most of the things it could do are done better and more cheaply by something else that’s less versatile.
Which brings us to hydrogen. Right now about 120 million tons of hydrogen are used annually for things that hydrogen is actually good for. It’s all made from fossil fuels with zero attention to pollution and CO2 emissions, and as a result, it’s cheap. Per S&P Platts hydrogen spot price index, a kilogram of pure hydrogen costs $1.25 to $2.00 USD in the USA today. As I’ve written about extensively, a large majority of it is used for things it’s good for at that price point, which includes stripping the sulphur out of fossil fuels — a market which has to go away — and making fertilizer — another market which has to go away. Why do they have to go away? Climate change. They are both massive contributors to climate change, and as a result have to be fixed, not just replaced with low-carbon hydrogen. We have to stop turning crude oil into fossil fuels, and we have to stop spreading lots of fertilizer onto fields, were it turns into 6x the CO2e of its mass in nitrous oxide, a major greenhouse gas in its own right.
But we can’t make hydrogen that cheaply if we want to do without massive pollution and global warming impacts. That’s just reality. The price of hydrogen is going to increase. Whether we bolt on carbon capture and sequestration — incredibly wasteful, silly and unworkable — or run renewable electricity through sophisticated electrolysers, it’s going to be more expensive than gray or black hydrogen. Even at $20/MWh — my projected stable end price for electricity decades from now after the transition in 2021 dollars — and 90% electrolyzer utilization, energy costs alone per Lazard’s hydrogen LCOE are far above the current spot price, from $2.56 to $2.96 USD.
The laws of thermodynamics aren’t going to allow that to get vastly cheaper. We’ll take 10% off of it for sure, maybe 20%, and that’s excellent, but we aren’t going to halve it.
As I’ve assessed, that top line and its “no real alternatives” is somewhat immaterial in that three of those uses — fertilizer, hydrocracking and desulphurization demand are going to plummet over the coming decades, not stay put and certainly not grow. And let’s be completely clear, the top line is the only place were hydrogen is used today in any volumes. Everything else is a projected new use of hydrogen.
Just like all those projected uses of hemp outside of odd niche enthusiast consumer groups.
For everything that has a competitive technology of electricity/batteries, well, guess what. Using electricity directly or through batteries is almost always more effective, efficient, and cheaper than using hydrogen.
Just like all the things we use instead of hemp today.
Hydrogen can be burned for heat. But we don’t do that today and won’t do that in the future because getting heat directly from electricity in exactly the amounts and locations we need is easier with electricity. (Pro-tip: electricity is actually an amazingly effective, efficient, and cheap jack of all trades. Typically if it can be used at all, it’s the best choice. The only reason we don’t use it for more things is that when we are allowed to treat our atmosphere as an open sewer, fossil fuels are cheaper.)
Hydrogen can be stored for long-duration storage. But we don’t do that today, and won’t do that in the future because pumped hydro storage and batteries are cheaper and better.
Hydrogen can be used as a transportation fuel. But we don’t do that today, and won’t do that in the future because grid-tied and battery vehicles are absurdly more fit for purpose up until we get into massive scales that can’t be grid tied, at which point it’s still not hydrogen because biofuels that prepackage the hydrogen and carbon using sunlight are cheaper and more effective.
Hydrogen can be used for domestic heating and cooking, as natural gas is today. But we don’t do that today, and won’t do that in the future because electricity is already in every home, heat pumps are vastly better and safer than the combination of gas furnaces and air conditioners that they displace, we already have highly efficient, cheap, and very effective electrical appliances, and we have no hydrogen appliances.
Hydrogen can be used for steel. We don’t do that today, but we will likely do a lot more of that in the future. Even there, though, direct reduction of iron ore using electricity is being explored to electrify that process the way we electrified making aluminum. And we have electric steel minimills to process all the left over scrap metal from all of the fossil fuel infrastructure and equipment that’s going to be turned off. Steel isn’t a guaranteed growth market for hydrogen, just a likely one.
Hydrogen can be used for methanol. But a useful outcome of this comparison of hemp to hydrogen is that Liebreich has pointed out that biomass/biogas can also be used for that purpose, and if hydrogen is twice as expensive, alternatives will be explored and commercialized rapidly. As a result, my projection of flat line methanol hydrogen demand is actually optimistic. When I publish v2.0 of the hydrogen demand outlook, it will be going down, reducing net hydrogen demand further.
All of the people shouting from the rooftops about the wonders of hydrogen are just as wrong as all of the people shouting about the wonders of hemp, and for the same reasons. There are better and cheaper alternatives. So why are we paying attention to the people shouting about hydrogen?
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