Oil’s time up: hydrogen will power the future

There’s enough pollution-free, renewable energy out there to power humanity for the entire Anthropocene age.

Businessman Andrew Forrest (AAP Image/James Ross)

The iron ore company I founded 18 years ago, Fortescue, generates just over two million tonnes of greenhouse gas — every year. That’s more than the entire emissions of Bhutan.

It’s also just 0.004 per cent of the greenhouse gases that enter the atmosphere every year — about 50 billion tonnes.

The answer isn’t to stop mining iron ore — which is critical to the production of steel and to humanity.

The answer is ... green iron ore and steel — made using green, zero-emissions energy.

If the world’s renewable energy resources were a power station, the plant would be millions of gigawatts in size.

To put that into perspective, Australia produces all of its electricity from just 70 GW.

There’s enough pollution-free, renewable energy out there to power humanity for the entire Anthropocene age. That’s the age of humans, just as the Mesozoic was the age of dinosaurs.

But the markers of our era won’t be Tyrannosaurus teeth or asteroid craters, they’ll be giant landfills of single-swig, plastic water bottles, effectively fossils the moment they’re made.

We have no idea how long the Anthropocene will last. But if we don’t stop warming our planet it will be geological history’s shortest era. The solution is hydrogen.

Hydrogen is the most common element in existence.

In fact, the universe is 75 per cent hydrogen by mass — so we’ll never run out of it. It’s also the simplest. To make it, all you need to do is run electricity through water. That’s green hydrogen, the purest source of energy in the world — and one that could replace up to three quarters of our emissions, if we improve the technology and had the scale.

But right now, we don’t use it for energy. It’s “just” an ingredient used in industrial processes. And we make it from fossil fuels — quaintly calling it “grey” hydrogen, to hide the fact that it’s a pollutant.

“Green” hydrogen — the good stuff — is virtually ignored by the economic world. We’re missing a colossal opportunity.

The tricky part is transporting it — but we are cracking that.

The green hydrogen market could generate revenues at the very least of $US12 trillion by 2050 — bigger than any industry we have now.

And Australia, with characteristic luck, is sitting on everything it needs to be the world leader — but only if it acts fast.

The journey to replace fossil fuels with green energy has been moving at glacial speed for decades — but is now violently on the move. In the past year, China, Japan and South Korea have together pledged to put almost 8 million hydrogen fuel cell cars on the road.

And almost every major business in the world has committed to net zero emissions by 2050, including Australian companies marching ahead of government.

These are laudable and genuine ambitions. But if we wait until 2050 to act, our planet will be toast. We’re already way behind schedule. The science says that to keep things halfway normal, we need to limit warming to 1.5 degrees.

The science also says that to do this, we need to slash our emissions every year between now and 2030. Because as of today, we’re heading for a three-degree rise. That’s how science works. You can predict it.

There’s only one solution, and it’ll require businesses to work closely with governments.

Green energies need to be available at an industrial, global scale — and at a price that competes with fossil fuels.

When fossil fuel energy becomes more expensive than renewable energy — that’s when we’ll reach the tipping point. That’s when the world will begin the journey in earnest to become zero-carbon. Not only because it’s the “right” thing to do, but because it makes great sense. And the shift will be lightning fast. Forget 2050 — zero emissions will begin to happen overnight.

Based on its position of strength, the Fortescue board and management recently decided to become one of the world’s biggest renewable energy production businesses.

Fortescue will catalyse a global solution to climate change — by rapidly increasing the supply of green energy.

In August 2020, I, along with team of 40 — in the midst of COVID — left Australia to visit almost 50 countries over five months.

Timing was everything. The world was in lockdown. Economies and oil markets were collapsing.

The diaries of political leaders were eerily empty, and foreigners were a rarity — particularly foreigners wanting to develop their unutilised renewable assets with a global strategy.

The trip came with considerable risk.

We had all left behind our loved ones and the security of Australia in the middle of one of the worst pandemics in history. When I caught COVID, and spent three days on oxygen in Switzerland — I could be forgiven for fearing the worst.

On reflection, it was the private discussions I had with sovereign leaders, businesspeople, politicians and technology developers. It was their genuine belief that the time for green energy had come.

I sensed a change in the global mood — this shift in belief — that the impossible could be possible. We could create sufficient green energy to challenge the oil sector. America’s and Asia’s captains of industry met us with a tirade of enthusiasm for hydrogen, as did Europe.

In short, my time on the road made me realise that our ambitions — while risky — were far from radical. The question isn’t whether or not green hydrogen will become the next global energy form … it’s which company has the resilience to take the risk and truly test green hydrogen at global, industrial scale?

The board and I decided that Fortescue would be that first mover.

Andrew Forrest is the non-executive chairman of Fortescue Metals Group. This is an edited extract of the Boyer Lecture to be delivered by Mr Forrest. The lecture will be broadcast by ABC TV at 2.30pm on Saturday in all states except Western Australia. The lecture will be broadcast in WA at 1.30pm.