Economics of Hydrogen Production From Natural Gas

This article, written by Assistant Technology Editor Karen Bybee, contains highlights of paper SPE 101703, "The Hydrogen Economy: Economics of Hydrogen Production From Natural Gas," by D. Seddon, SPE, Duncan Seddon & Associates Pty. Ltd., prepared for the 2006 SPE Asia Pacific Oil & Gas Conference and Exhibition, Adelaide, Australia, 11–13 September. Hydrogen is a principal fuel for high-efficiency fuel-cell vehicles that produce zero emissions. Hydrogen-fuel-cell vehicles can be fueled competitively with conventional fossil-fuel vehicles if hydrogen is produced in large central facilities with access to low-price natural gas. In times of high oil price, the production cost of hydrogen should be comparable to the price of petroleum fuels. Although improvements to the technology of production are being researched, breakthroughs will not make a major difference to the production costs. Great unknowns are the cost of hydrogen transport and delivery and the distribution pressure required. Introduction Hydrogen from sustainable nonpolluting sources such as wind or solar energy is touted as the transport fuel of the future. The cost of hydrogen production from such sources is very high and is uneconomic given the price of electricity produced by these methods. Conventional wisdom assumes that fossil-fuel-derived hydrogen will be used in the interim. Natural gas is an obvious candidate for this role. Small-scale hydrogen production is unlikely to be economic and to be viable; production needs to be focused on large-scale hydrogen production. A series of engineering-concept studies for hydrogen production on a large scale has been published by the US National Academy of Science (NAS). Rather than using methanation as a step in hydrogen production, the NAS study used an alternative approach with a pressure-swing-absorption (PSA) unit to separate hydrogen. The full-length paper focuses on development of a relationship between the production cost of hydrogen and the cost of natural gas for the mass production of hydrogen in a large central facility by use of the PSA method. Technology Hydrogen is produced commercially from natural gas for the chemical and refining industries. In the typical method to produce hydrogen, natural gas (methane) is steam reformed to produce a "synthesis gas" comprising hydrogen and carbon oxides [a mixture of carbon monoxide and carbon dioxide (CO2)]. The amount of methane "slipping" through the reformer is minimized by operation at high temperature and low pressure. Fuel for the reformer is provided by a fuel-gas-stream addition to the feedstock gas. The next step is to convert all of the carbon oxides into CO2 by use of the water-gas-shift (WGS) reaction.