Several oil and gas companies and the firms that service them said they are prepared to answer U.S. climate envoy John Kerry's call to help build the global hydrogen economy.

Representatives from Royal Dutch Shell PLC, pipeline operator Snam SpA, power generator Uniper SE and engineering firm Chart Industries Inc. discussed their roles during an April 20 Earth Week event hosted by the Atlantic Council's Global Energy Center. The panelists broadly agreed that low- and zero-carbon hydrogen will be critical to achieving a clean energy economy, but some disagreed sharply on whether the fuel will play a role in decarbonizing certain sectors.

The Biden administration is seeking to invest in hydrogen applications to achieve cost parity with natural gas. At this year's CERAWeek by IHS Markit conference, Kerry said the oil and gas industry could help make hydrogen a viable fossil fuel alternative.

"There are huge opportunities here ... oil and gas has incredible infrastructure, incredible capacity to move energy from one place to another," Kerry said March 2. "What if that happened for hydrogen? There's a future in, I think, this new partnership as we design the energy modalities of the future."

Michael Liebreich, chairman and CEO of energy advisory firm Liebreich Associates said Kerry's challenge to hydrocarbon companies was "spot on."

"I see no version of the future where we can get to net zero without a really healthy hydrogen sector. That's the first point," Liebreich said. "And the second point, I can't see a healthy hydrogen sector without a healthy involvement from the current petrochemical, current oil and gas players."

Hydrocarbon companies adapt for hydrogen economy

Wayne Leighty, Shell's Hydrogen Commercial Manager for North America, said oil and gas companies have experience that transfers to the hydrogen space, including serving mobility customers at retail sites, trading commodities, unlocking synergies and integrating sectors across energy markets.

Leighty acknowledged there is competition among electric battery, biofuel and hydrogen applications for mobility within Shell's Renewables and Energy Solutions group, but the company also views them as complementary. The commercial manager noted that while today's batteries provide good short-term, low-capacity storage, green hydrogen is a long-duration, transportable product that can store excess renewable power in gaseous form.

"In the infrastructure we see great synergies," Leighty said. "If there's an electron in the right location at the right time, it's great to put it into a battery. But if that electron is stranded, needs to be moved in time and space somewhere else, hydrogen is a great vector for doing that. And also, it can be moved to a different market where the value is higher."

The growing penetration of intermittent renewable power and the phaseout of baseload coal-fired power generation in Europe makes hydrogen's storage capacity critical, Uniper Hydrogen GmbH CEO Axel Wietfeld said. Uniper, which aims to achieve net-zero power generation by 2035, is piloting green hydrogen production. However, Wietfeld also anticipated the need to import hydrogen, noting that Uniper is contemplating injecting the fuel into gas-fired plants one day.

"We strongly believe that in five, 10 years time, we will talk about hydrogen in a similar way we today talk about LNG. So consequently, we are discussing about an import facility for Europe," the CEO said. "Some of the countries will not be able to just produce sufficient green hydrogen themselves."

With renewable power curtailments growing, existing gas pipelines and infrastructure present an option for utilizing otherwise wasted clean energy, according to Cosma Panzacchi, Snam's executive vice president for hydrogen. Europe could present a model, as the continent's stakeholders explore a hydrogen backbone that would pair existing infrastructure with new dedicated long-haul hydrogen pipeline, Panzacchi said.

"Looking at the U.S., given the amount of infrastructure that already exists in North America ... this could potentially be repurposed to move hydrogen around the country," the executive vice president said.

Debate over hydrogen's use in key sectors

However, Liebreich cautioned that hydrogen will probably be deployed chiefly in industries with few other viable decarbonization solutions: fertilizer, ammonia and petrochemicals production; air travel and maritime shipping; and steel production. He also see utility for hydrogen as a backup to power generation during seasonal periods of low wind and solar resources.

Liebreich said the focus on the transportation sector may be misplaced because battery electric vehicles will dominate the market, even in long-haul and heavy transport. He also poured cold water on the idea of hydrogen use for rail transport, calling it "a stupid solution." In his view, the prospects for hydrogen in building heating are also dim, and he cast the idea of reinvesting in gas utility assets as disingenuous.

"I'll tell you, the distribution gas network people are not thinking like that," Liebreich said. "They're thinking, 'Gee, there's a huge write-off of our assets unless we do hydrogen boilers for space heating.' We're not going to. It just doesn't make sense as an economic solution."

Leighty pushed back on the transportation criticism, saying Shell sees transportation through the prism of customer use cases. The commercial manager noted that in California, the average BEV logs roughly 6,000-9,000 miles a year, while the average fuel cell electric vehicle owner drives 9,000-14,000 miles a year.

"Charging at home is available for maybe up to half of Californians. Charging at home is not available to those who live in high-rise and multi-unit dwellings," Leighty said.

Jillian Evanko, the president and CEO of Chart Industries, which makes systems for transporting hydrogen, also sees potential for the fuel to notch an early-phase win in the mobility market. Evanko noted that if you own a fuel cell electric vehicle in California, that does not help you get to the East Coast due to the lack of refueling stations across much of the nation.

"A lot of the early day wins are creating ways to connect that infrastructure in that network," Evanko said. "And that's what we are seeing more and more of in the next couple of years."

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