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Eden hopes for Hythane heaven

Friday, 16 September 2011 James McGrath

EDEN Energy was a high flying junior with a share price hovering around 70c and big dreams about a hydrogen-methane fuel blend called Hythane when the GFC hit and forced the company to put things on the backburner.
It also had substantial gas assets in southern Wales which could have seen the company through into the future. To fund further development though, Eden chairman Greg Solomon had to make a choice. Our share price was at a very low level, and for us to raise enough money we were going to have to enormously blow out the capital base of the company, he recalled to EnergyNewsPremium. I looked at it and all of a sudden I could see a very, very large penny dreadful in the making. Eden sold some of its gas assets to keep the company going based on the raw potential of its hydrogenmethane fuel mix, Hythane. The fuel itself is a small amount of hydrogen added to natural gas. The hydrogen acts as a very strong combustion and as a result, with a properly tuned engine, it can act like a premium gas, Solomon said. You get an increase in efficiency and you can get a reduction in emissions. The increase in efficiency, depending on the type of engine whether it be leanburn or turbo charged, is between 6% and 15%. You can get a reduction in emissions of all sorts, which includes unburned hydrocarbons, carbon monoxide and also reduction in the nitrous oxide. He told ENP about his trip to Europe in 2004, when several automotive companies were starting to look at hydrogen as the next big thing. When he heard that Shell was interested in a small company in the US developing a technology to blend 20% hydrogen with 80% methane, he jumped on another plane. A short time later he had closed the deal to acquire both Hythane the technology and Hythane the company. Shortly after we had been there, I was still in Denver at the time, Mitsui came along and said were also interested, but the guy who sold it said sorry, its too late, Ive already sold it, Solomon said. So I thought there was definite interest from major companies. To be fair, hydrogen at that point was still well and truly on the agenda as an alternative vehicle fuel. I think they were all looking to see where it went. He concedes that a wait and see approach may have been the best way to go in light of cooling interest from the big boys. The US majors wouldnt have anything to do with hydrogen at that point and the GFC didnt whet their appetite for big thinking, but the BRIC (Brazil, Russia, India and China) nations of India and China were the ones who were pushing ahead with gaseous fuels. Ive spent time in both India and China discussing with the governments the prospect of having a premium blend of natural gas with some hydrogen in there to make the blend, Solomon said. India though, went as far as to develop a hydrogen roadmap in 2006 which dictated that 20% of all vehicles in the country should be running on hydrogenbased fuels by 2020. STORY IMAGE SLIDESHOW

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EnergyNewsPremium.net - Eden hopes for Hythane heaven

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India also has a huge resource of natural gas which has yet to be tapped, and a massive public transport system which was keen to demonstrate the potential for Hythane for its buses, many of which already ran on compressed natural gas engines. One of the key aspects of Hythane, of course, is the hydrogen. As many who have dreamed hydrogendreams before can tell you, getting hydrogen can be difficult and expensive. Its produced as a by-product from various industries, but one of the difficulties with hydrogen is that its gas where the molecules repel each other, Solomon said. So its very hard to squeeze enough energy into a tank so you use a huge amount of energy to put a small amount of hydrogen gas into a tank in a gaseous form. So what about the problem of getting hydrogen? Eden Energy went on another acquisition bid, this time for Chicago-based HyRadix who had a steam reformer capable of producing hydrogen from natural gas. Everything was in place to start demonstrating the technology when the GFC hit, and Eden was forced back into its shell. It subsequently had to sell off the steam reformer technology, and it was virtually back to square one. Instead of selling Hythane off and concentrating on its gas assets, it decided to back Hythane. We thought if we can sort out the hydrogen technology, it really does have enormous potential, Solomon said. There was also another snag. While hydrogen can be produced, its quite expensive to do so which is reflected in the end cost price of Hythane. When Solomon told potential Chinese investors that Hythane would be more expensive than natural gas, they declined to pursue it further telling him the gas would never get off the ground if it was actually more expensive than natural gas. The company looked for a solution and eventually found one in a pyrolosis process, which produces hydrogen as a by-product of carbon. Depending on what catalyst is used in the process, the carbon can be formed into carbon nanotubes or carbon fibres. The two technologies can then be sold on to be added to other materials such as cement, paper or rubber to make them stronger and more lightweight. While the carbon industry is still in its infancy, its one with potential for Eden. It can produce a 100 tonnes of carbon per year and 25t of hydrogen per year as a by-product. The price per kilo [of carbon] starts at about $500 to $600, but it can go up to about $4000 or $5000 per kilo, Solomon said. The bulk prices are lower than that, but its possibly somewhere in the order of $60,000 to $80,000 per tonne. Therefore if Eden can find the carbon market, it can find the solution to its hydrogen cost problem. At that point you start to open up very low-cost hydrogen. We see the combination in where all this stuff comes together is India, Solomon said. The company is still in talks with Indian officials about starting a two bus trial using hydrogen from tanks by the end of next year, and then scaling up to 35 buses using hydrogen from the pyrolosis technology. Hythane may have a long and winding road towards commercialisation, but Solomon hopes the decision he made during the GFC to back Hythane will be invariably justified. If you can perfect it, if you can find a market for the carbon, then the hydrogen will come more cheaply and all of a sudden youve got a cheap, clean, super efficient fuel and you can also be producing another product with no carbon dioxide, Solomon said.

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