Aurora Hydrogen raises $10M, but will its process decarbonize or facilitate tar sand exploitation?

A number of startups have cropped up to tackle the challenge of making hydrogen cheap and accessible for industrial users, including the latest, Aurora Hydrogen.

The startup announced a $10 million Series A yesterday led by Energy Innovation Capital and joined by Williams Companies, Shell Ventures, Chevron Technology Ventures and the George Kaiser Family Foundation.

Aurora said its microwave-based approach can make hydrogen using 80% less electricity than the cleanest form of hydrogen production and with less carbon emissions than the cheapest.

Most hydrogen today is made by steam-reforming natural gas. It’s cheap, but polluting, releasing copious amounts of carbon dioxide in the process. The other main way to make hydrogen is electrolysis, which sends electricity through a catalyst to split hydrogen from water. That method doesn’t release any carbon dioxide, but it is energy intensive.

Aurora uses methane as the feedstock, but instead of cooking it with steam, it uses microwaves to crack the carbon-hydrogen bonds. The result is pure hydrogen gas and solid carbon.

The company said it’s focusing on developing hydrogen production plants that can be built close to where the gas will be used.

“We use existing energy pipelines and distribution systems to move the energy, then produce hydrogen where it’s needed, eliminating the need for any new costly hydrogen transportation infrastructure,” CEO Andrew Gillis said.

Using microwaves to produce hydrogen from methane isn’t a new idea, but Aurora is among the first to try scaling it up to commercially useful levels. Aurora’s new raise will help the company scale up its bench-top demonstration to a larger facility that it says will produce 200 kg of hydrogen per day.

Aurora’s process works by using 950 MHz microwaves to heat the solid carbon byproduct. The resulting heat cracks methane’s carbon-hydrogen bonds. Because carbon-hydrogen bonds are weaker than water’s oxygen-hydrogen bonds, microwave pyrolysis requires less energy than electrolysis of water.

Using the byproduct to perpetuate the reaction is pretty clever. Many hydrogen production processes, especially ones that use electrolysis, rely on catalysts, some of which are expensive and all of which eventually degrade over time. Aurora seems poised to reduce the cost of consumables. (Presumably Aurora kickstarts it all with solid carbon from another source, but it’s likely a small amount.)

So where’s the hitch? Though Aurora’s process doesn’t release any extra carbon dioxide, it isn’t exactly zero-carbon.

That’s because the main source of methane today is natural gas, and the natural gas supply chain is far from zero-carbon. Methane is a potent greenhouse gas, warming the Earth 83 times more over 20 years than an equivalent amount of carbon dioxide, and natural gas infrastructure is notoriously leaky.

From the time it’s drilled to the time it’s used, anywhere between 1.5% and 4.3% of the stuff escapes into the atmosphere. The leakage rate is important when calculating the carbon footprint of hydrogen production that relies on natural gas. For blue hydrogen, which is made using steam reformation and capturing all resulting carbon dioxide, a leakage rate above 2.5% of total production can tip the balance, according to a study published last year. It makes blue hydrogen less attractive from a climate standpoint than simply burning the natural gas outright.

Plugging natural gas leaks won’t be cheap. Fixing leaking wells in the U.S. alone could cost $280 billion. That doesn’t include fixing the distribution system, which could be even more expensive. In Massachusetts alone, the bill could exceed $20 billion.

That may not matter to some oil and gas companies, though. In Canada, where Aurora is based, hydrogen from steam reformation is used to “upgrade” the bitumen extracted from oil sands so it mimics the more valuable light sweet crude oil, which is easier to turn into gasoline. Aurora’s process could help those companies reduce the carbon intensity of their oil sands production, but it would still be far from low carbon. That could allow companies like Chevron, an Aurora investor, to reduce its carbon emissions without selling its oil sands reserves, which it’s faced pressure to do.

That’s not to say that oil sands would be the sole use of Aurora’s “turquoise” hydrogen. If it supplants coal in cement or other heat-intensive industries, it’s potentially better — leaks included.

Still, because of leaky natural gas infrastructure, Aurora hydrogen’s carbon footprint is almost certainly higher than green hydrogen, which is produced using renewable power and electrolysis of water. Unless all the natural gas leaks are plugged, turquoise hydrogen won’t be the fuel that industries need to truly decarbonize.