Bill Gates-backed startup sparks global gold rush for buried hydrogen

U.S. clean fuel startup Koloma, backed by Bill Gates and Jeff Bezos, said it hopes to leverage expertise traditionally serving the hydrocarbon industry to fuel the global gold rush for buried hydrogen.

Meanwhile, there’s been buzz about the clean energy potential of geological hydrogen, a long-neglected resource that advocates say could play a key role in the transition away from fossil fuels.

Geological hydrogen—sometimes called white hydrogen, gold hydrogen, or natural hydrogen—refers to hydrogen that exists in its natural form beneath the Earth’s surface. It is thought to be produced by high-temperature reactions between water and iron-rich minerals.

Koloma CEO and co-founder Pete Johnson told CNBC that geological hydrogen is fundamentally an exploration and production business.

“We can leverage the expertise and service providers that have traditionally served the oil, gas and mining industries and quickly engage them in driving the discovery of carbon-free resources. Leveraging and modifying existing resources will allow us to more quickly Let the industry mature,” he said.

Denver, Colorado-based Koloma has raised more than $305 million since its founding several years ago, the company told CNBC.

The startup’s backers include US venture capital firm Khosla Ventures; Amazonof the Climate Commitment Fund, United Airlines Breakthrough Energy Ventures, a climate and technology fund founded by Bill Gates in 2015.

Investors in Breakthrough Energy include Bridgewater Associates’ Ray Dalio, Virgin Group’s Richard Branson and Alibaba’s Jack Ma.

The number of companies actively searching for geological hydrogen deposits has increased dramatically in recent years, prompting analysts at Rystad Energy to describe the pursuit as a “white gold rush.”

The hype stems from hopes that this previously overlooked resource can become a “game changer” in the energy transition, the consultancy said in a research note released in March.

The United States, Canada, Australia, France, Spain, Colombia, South Korea and other countries are currently exploring low-carbon energy.

Coloma’s Johnson said that as the industry “gains momentum and gains traction,” there is also greater focus on what he calls the “intrinsic benefits” of geological hydrogen as a primary energy source rather than a derivative.

Primary energy, such as coal, oil, wind or solar energy, is natural energy that has not been altered or converted.

“Geological hydrogen should have a very low carbon impact and a very low impact on land and a very low impact on water,” Johnson said.

Asked about the prospects for the rapidly emerging industry, Johnson said the U.S.’s untapped geological hydrogen resources could play an important role in the country’s decarbonization efforts.

“Russia and Ukraine are both big export countries. [of] Hydrogen-derived ammonia is a component of most modern fertilizer products and since their conflict began, the world has become more aware of the importance of domestic ammonia supplies,” Johnson said.

“The U.S.’s geological hydrogen resources will allow us to scale domestic ammonia production and become a net exporter, even as we significantly reduce the carbon footprint of our products,” he added.

Hydrogen has long been considered one of many potential energy sources that could play an important role in the energy transition, but most hydrogen is produced using fossil fuels such as coal and natural gas, a process that produces significant greenhouse gas emissions.

It is against this background that the potential of geological hydrogen continues to grow.

Geoffrey Ellis, a research geologist with the U.S. Geological Survey (USGS) Energy Program, told CNBC earlier this year that there may be large amounts of naturally occurring hydrogen buried in underground reservoirs around the world.

Ellis said a small fraction of geological hydrogen recovery would be enough to meet all expected demand for 200 years.

Not everyone is convinced of its clean energy potential.

Geological Hydrogen The discovery currently provides the world with less energy per day than a single wind turbine can produce.

Additionally, the alliance said there are environmental concerns with the extraction process, while transportation and distribution challenges mean geological hydrogen is unlikely to be found where it is most needed.

Coloma’s Johnson said that while there are still many hurdles to overcome, the company is “well capitalized, which allows us to approach these challenges in the right way, with thoughtfulness and patience.”

“Koloma is fortunate to have support from a diverse range of investors – some of whom are more focused on technology and data advantages [that] Coloma is under construction and some see huge potential returns from large resource discoveries, while others are most keen to take positions around cost-effective low-carbon derivatives that could use geological hydrogen,” Johnson said.

“As with any exploration operation and any new technology, there are still many challenges we need to overcome to unlock the potential of geological hydrogen,” he added.