Twiggy Forrest of Fortescue Future Industries Cuts Loose on Hydrogen

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According to Rethink Energy, Dr. Andrew Forrest, the founder of Fortescue Future Industries (FFI), a subsidiary of Fortescue Metals Group, has clearly articulated the way forward for hydrogen at the Financial Times Hydrogen Summit in London last week.

According to speakers’ notes from the conference:

“In 2021, Fortescue Future Industries (FFI) was established as a developer, financier, and operator of a global portfolio of renewable energy resources to produce green energy at a scale equal to the oil and gas super-majors. FFI is leading the green industrial revolution, developing technology solutions for hard-to-decarbonise industries, while building a global portfolio of renewable green hydrogen, green ammonia, battery system and zero emission energy projects. Dr Forrest is recognised as a global leader in the race to real zero, with Fortescue the only mining company to be a founding member of the First Movers Coalition, an ambitious climate initiative launched at COP26 by President of the United States, Joe Biden. Fortescue is also a member of the UN Race to Zero Coalition and a signatory to the Climate Pledge. It is the only heavy industry company in the world to detail a fully costed construction plan to completely remove fossil fuel from its operations.”

Hydrogen generation is characterised by colours which declare how it’s made: green, blue, grey, black, and now white. Green hydrogen is created from the electrolysis of water using renewable energy. Blue hydrogen is made using natural gas, with the greenhouse gases captured and sequestered (CCS). Grey hydrogen is made the same way, but without CCS. White hydrogen is naturally occurring.

Black and brown hydrogen are made using black or brown coal. Then there is yellow hydrogen made with solar, and turquoise hydrogen “made using a process called methane pyrolysis to produce hydrogen and solid carbon.” Really. “In the future, turquoise hydrogen may be valued as a low-emission hydrogen, dependent on the thermal process being powered with renewable energy and the carbon being permanently stored or used.” There is also a pink category for hydrogen made with nuclear power. Who would have thought!

There’s so called “white hydrogen” now, which is naturally occurring. Rethink Energy and Forrest agree that it will “only represent a small sliver of the total hydrogen consumption over the next two decades and a half,” though. This “won’t be enough to move the dial on climate change.”

I am a proponent of green hydrogen only, the same as Twiggy Forrest.

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Dr Forrest confirmed at the conference that Fortescue Future Industries (FFI) would be investing tens of billions of dollars into hydrogen projects in the USA as a result, in part, of the Inflation Reduction Act (IRA). “The IRA is working because it’s simple. If you want to serve up something complex to a banker, you’re not going to get any money,” he said. For the sake of the investors, FFI will concentrate on the American market in the short to medium term.

“We can’t knock the IRA. I had 45–50 minutes of vigorous debate with President Biden persuading him to take the limit off the amount of capital that they would invest into green energy. My argument was that it will pay itself back in new investment, in economic growth, and in taxes every three or four years,” said Forrest, who also pointed to the advantage of ready-built US infrastructure.

“You can transport your green energy down the grid, have your electrolyser-cracking facility right next door to a major consumer, the pipeline is that long. It’s so efficient, and then you are subsidised heavily to do all that, which is not surprising because we’re getting a new industry going,” he added.

What about the electrolysers? “Our future is machines making machines — machines which make electrolysers, machines which make long-distance high-density cables, solar panels which can crack hydrogen in the panel. All these technologies are emerging quickly and China is capturing that technology, putting it into machines and then getting machines to make those machines,” he said. The cost curves are expected to come down. Sounds a bit like Elon?

Fortescue Future Industries is at various stages of investment in hydrogen production in the Middle East and North Africa (MENA), South America, and of course his homeland of Australia. “The company plans to make final investment decisions on five projects across various locations, including Australia, the US, Kenya, Brazil, and Norway,” he said. “If we go FID on several projects this year, that’s moving at lightspeed.”

Dr Forrest pointed out that carbon capture and sequestration (CCS) is a pipe dream, calling it “the newest story for the next old sucker.” He gave the example of Chevron and its failed CCS project in Australia. Chevron has publicly said it would let the project go since it would send the company broke to continue. Are the governments of the world stuck in a “Stockholm syndrome,” held hostage by the fossil fuel industry?

Don’t blame the consumers! Until we have alternate forms of energy, we are stuck too. The oil majors should be ashamed for getting rich at the cost of polluting the planet.

DALL·E generated image of a green hydrogen industrial facility beside a coal generation plan, digital art
DALL·E generated image of a green hydrogen industrial facility beside a coal generation plan.

Forrest called on the world’s energy companies to provide energy that does not harm humankind, and countries to introduce simple legislation to stimulate investment in green hydrogen. “We need to hold our energy giants to account and to give us energy that doesn’t harm us, and they’re stalling on that.

“They’ve got all these fantastic excuses and I’m just saying that we have got to stop falling for it. It’s just a stalling tactic that we need to change,” said Forrest in response to Financial Times associate editor Pilita Clark.

“It took around 35 years for the accepted science that tobacco smoke causes lung cancer to become mainstream and the tobacco companies and the oil and gas companies don’t have to win any arguments, they just have to cast doubt, then they’ve won, because they’ll just continue on,” he said, emphasizing that green hydrogen generation is the route to follow

Forrest described the UK government as “sleepwalking” into the hydrogen future. The UK has access to “hundreds of gigawatts of clean energy from the North Sea.” He asked, “where are the policies” that would make that cheaper?

When queried about Fortescue Future Industries’ previously set targets, Forrest countered with: “… cut us a bit of slack,” recalling that the world had cut the oil industry 200 years of slack and trillions of dollars worth of subsidization.

The Russia–Ukraine war and the breach of the Paris 1.5-degree target have highlighted the need to wean Europe and the rest of the world off of fossil fuels. This has brought green hydrogen and its main proponent, Dr Andrew Forrest, back into the spotlight. The EU has increased its targets for green hydrogen, and fossil fuel prices have increased. Push-and-pull economic factors are aligning to make green hydrogen a permanent fixture of the global energy mix.

What we need now: greater policy support and progress on large scale projects. Bring on the light speed, Dr Forrest!

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David Waterworth

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].

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