Australia could be set for its next gold rush, which could prove as exciting as back in February 1851 when a prospector discovered shimmering flecks in a waterhole near Bathurst, New South Wales, sparking interest from domestic and international miners and investors.
Today, exploration Down Under has a novel 21st century focus with players targeting naturally occurring hydrogen — dubbed “gold” hydrogen — which could be exploited at a lower cost than producing the gas from fossil fuels or electrolysis.
This potential gold rush has already attracted interest from heavyweights such as former Woodside Energy chief executive Peter Coleman, who has invested in — and been appointed chairman of — Australian natural hydrogen explorer H2EX.
Interest in the “highly anticipated energy source” has surged since a natural hydrogen bore in Mali, Africa, was drilled in 2012 and was subsequently connected to a fuel cell to supply electricity to the nearby town Bourabougu, Australian independent Gold Hydrogen notes.
Last year, the company was awarded petroleum exploration licence (PEL) 687 — which covers 7820 square kilometres across South Australia’s Yorke Peninsula and Kangaroo Island — after research by Gold Hydrogen director Luke Titus provided evidence of discoveries of flowing natural hydrogen of up to 90% purity.
Gold Hydrogen claims to have a certified unrisked best estimate prospective hydrogen resource of 1.3 billion kilograms.
“We want to further explore and confirm our modelling that shows there is 10 times more natural hydrogen in the tenement area,” the company says.
The minimum commitment workscope for each of PEL 687’s firm five years is clearly spelled out.
Gold Hydrogen committed to performing geological and geophysical studies during the initial 12 months, while the remaining work commitments will be dependent on it entering the subsequent years.
The South Australian government says that the future minimum work commitments call for a 10,000 square-kilometre airborne audio electromagnetic-passive transient pulse (AEM-PTP) survey in year two and a 4000 line-kilometre magnetic gravity airborne survey in year three.
If results prove encouraging, then Gold Hydrogen is committed to the acquisition and processing of 600 line kilometres of 2D seismic in year four of its exploration licence and drilling one well in year five.
Gold Hydrogen has a 100% operated interest in PEL 687. The licence is due to expire in July 2026 and could be terminated earlier if the minimum work commitment is not met in a given year.
Meanwhile, H2EX proposes to explore, appraise and develop natural hydrogen within PEL 691, which was also awarded by the South Australia government.
On LinkedIn, H2EX confirms it has “successfully secured” PEL 691 totalling about 6000 square kilometres and has first ranking status over four application areas — PELs 689, 690, 725 and 754 — totalling about 32,000 square kilometres in South Australia.
“Naturally occurring hydrogen will provide a clean and low-cost energy solution, manufactured by Mother Nature,” H2EX says.
PEL 691 is located on the southeastern side of the Eyre Peninsula and includes the towns of Cleve in the north and Tumby Bay to the south.
The southeastern Eyre Peninsula consists of crystalline rocks that form the Gawler Craton. The area is not regarded as prospective for conventional hydrocarbons, according to the state government, and there has been no modern exploration drilling or seismic surveying.
Southern Eyre Peninsula’s only known petroleum exploration well, the Fountain Bore, was drilled in 1914 but no traces of oil or gas were found.
In May, the South Australian government revealed Otway basin acreage that could be offered later this year had “hydrogen exploration interest” because of potential shows encountered in the Robe-1 well, which was drilled in 1915.
Gas taken from the Robe well was analysed by the state’s Department of Chemistry and recorded anomalous hydrogen content.
Hydrogen has also been detected in wells drilled in the Cooper basin, on Kangaroo Island and on the Yorke Peninsula, according to the South Australia government.
“South Australia is a leading state in terms of spending money on, and taking action to facilitate, hydrogen development,” law firm Mayer Brown says.
In February last year, the state government amended the Petroleum & Geothermal Regulations 2013 to make hydrogen, its compounds and by-products, “regulated substances” under the Petroleum & Geothermal Energy (PGE) Act 2000.
Companies are now able to apply for permission to explore for natural hydrogen through the petroleum licence programme, and the transmission of hydrogen or compounds of hydrogen are now permissible under the transmission pipeline licensing provisions of the PGE act.
Hydrogen can be produced naturally by various processes in the subsurface, mostly from water where oxygen is separated off by diagenetic process or by radiolysis.
Since hydrogen is the most abundant element in the solar system, the degassing of large reserves of deep-seated hydrogen from the mantle or the Earth’s core have been also proposed.
The best-known process is the oxidation reaction between water and ferrous sediments resulting in their transformation to the ferric state through the release of hydrogen, the Commonwealth Scientific & Industrial Research Organisation (CSIRO) notes.
This process is the “best candidate” to explain high hydrogen flux measured above surface depressions — known as fairy circles — in Brazil, the US, Russia and Mali. Numerous occurrences of the same type of features are observable in Australia, the CSIRO says.
Australia’s fledging gold hydrogen industry is encouraged by success in Mali, sub-Saharan Africa, where twenty-five years ago drillers looking for water encountered gas that ignited at the wellhead.
The well was abandoned until around a decade ago when Canadian company Hydroma re-entered it as part of a drilling campaign in the vicinity.
Dubbed Bougou-1, the well contained 98% pure hydrogen, understood to be the purest naturally occurring hydrogen ever discovered. Further drilling indicated this hydrogen “field” to be an estimated eight kilometres in diameter.
Hydroma subsequently installed a pilot project to supply hydrogen-generated electricity to a nearby village.
A seismic reflection survey was later performed in the area and more than 20 further wells were drilled, all of which reportedly encountered hydrogen at various depths.
The geology in South Australia might well prove similarly prospective but companies will need to secure funds for their planned exploration forays.
Coleman has invested some of his own money in H2EX, while Gold Hydrogen, formed in early 2021, is funded by private equity although discussions are under way with other potential partners.
A fundraising round was oversubscribed and a share market listing is in the pipeline, according to Gold Hydrogen.
Titus is described by Gold Hydrogen as “highly skilled in early-stage undercover exploration using low-impact innovative techniques for data acquisition and analysis”.
“After keeping abreast of international literature on the development of natural [gold] hydrogen in Africa and other continents, it was his research of Australian sites that found the previous accidental discovery of natural hydrogen here, seen as a by-product of other exploration,” Gold Hydrogen says.
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