U.K. Fracker Explores Hydrogen Option for Heating and Transport

(Bloomberg) -- Cuadrilla Resources Ltd. is looking at ways to produce hydrogen from its stalled shale gas exploration site in northwest England to benefit from U.K. policy pushing the green fuel.

The firm said it will study how hydrogen can be produced from its wells to heat homes and power public transport to help develop a commercial use of the greener gas that a key climate report highlighted as crucial to hitting the net zero climate target by 2050.

“The north of England can become both a major gas producer and a major hydrogen hub – perhaps the center of the hydrogen revolution in the U.K.,” Francis Egan, Cuadrilla's chief executive officer told Bloomberg News in an email. Still in its infancy, the aim of the project is to make shale gas more cost competitive and a lower emissions source of hydrogen than imported liquefied natural gas, he said.

The U.K. government's climate advisers said in their landmark report earlier this year that hydrogen will need to be used in heating systems instead of natural gas in order to dramatically cut emissions to net zero. The government is fully behind the development and deployment of hydrogen into its networks with several funding schemes available. However, a commercially viable way to produce hydrogen is yet to emerge.

After years of delays, fracking in the U.K. seemed closer than ever when Cuadrilla said in February that the nation's first horizontal fracking well had uncovered a large reservoir of high-quality fuel. Progress since then has been slowed by a groundswell of public opinion against that practice of pumping fluid and sand under high pressure to stimulate gas flows from otherwise untappable rock formations.

Cuadrilla and Ineos Group Ltd. have also complained that an over-zealous regulatory regime on seismic activity has prevented them from being able to realize the potential of U.K. shale gas, that could slow the sharp declines in oil and gas production from the North Sea as conventional deposits are pumped dry.

Those limits as well as a swift drop in the price of gas is making it harder to justify new drilling. By pivoting to hydrogen, selling the greener gas commercially could provide Cuadrilla with a new revenue stream as well as creating jobs.

Read more about hydrogen's role in a zero-carbon future

Cuadrilla said that it'll also work with engineers and scientists to explore options for carbon dioxide, whether it can be re-used as a fracking fluid or the viability of using depleted shale wells for CO2 storage. A pilot project could be online by early 2020s.

Drax Group Plc, Equinor ASA and National Grid Plc in May said they will join forces to explore how to create the first large-scale carbon capture usage and storage network and hydrogen production facility in the U.K.

To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Lars Paulsson

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