American Oil and Gas Reporter - June 2023 - 32

ConventionSec tion: Kentucky Oil & Gas Association
Association Stays Attuned
To New Opportunities
By Del Torkelson
LEXINGTON, KY.-Spanish Olympian
Mireia Belmonte strides to a treadmill and,
while wearing electrode patches on her
upper torso, begins to run. A technician
watches two screens. One depicts a vehicle's
internal operations, while the other monitors
Belmonte's vital signs.
As she continues to run, breathing
deeply, the view periodically shifts to a
gleaming new Hyundai hatchback. Then,
the frame widens to reveal that Belmonte
is inside an enclosure that is connected to
the vehicle's exhaust pipe. Spanish text on
the screen explains that the only emissions
from Hyundai's hydrogen-powered vehicle
are water vapor and 99.9% pure air.
The video illustrates only one of many
possible applications for hydrogen fuel
cells, notes Kentucky Oil & Gas Association
President Wesley Cate. Since natural gas
is the feedstock for the most affordable
source of hydrogen, he reflects, the growing
interest in hydrogen presents an exciting
opportunity to boost natural gas demand.
" We are focusing on blue hydrogen,
the input for which is either ethane or
methane, " says Cate, who works as director
of business development for NGL Supply
Ltd. in Denver. " Think of it as another
fractionation plate. Taking natural gas
and splitting out ethane, propanes and
butanes is a refining process that makes
another commodity. That is also true of
blue hydrogen, where a hydrogen energy
molecule is made alongside a secondary
carbon black product that can be sequestered
or used to manufacture all kinds
of products. "
The possibilities are sufficiently intriguing
that KOGA hosted its inaugural Kentucky
Hydrogen Summit in January (AOGR,
Feb. 2023, pg 16). According to Executive
Director Ryan Watts, the event attracted
not only association members, but also
drew a host of industrial and commercial
nonmember participants. The topic will
continue at KOGA's 86th Annual Meeting
at the Campbell House in Lexington.
" Our annual meeting will have a hydrogen
break-out session, " Cate reports.
" People do not know much about who to
32 THE AMERICAN OIL & GAS REPORTER
" Taking natural gas and splitting out
ethane, propanes and butanes is a refining
process that makes another commodity. That
is also true of blue hydrogen. "
-Wesley Cate
KOGA President
go to for everyday hydrogen equipment,
from compression to valves to pipelines.
Our next step is to bring everybody into
one room so vendors can better understand
the demand, and so that project developers
and producers understand the cost thresholds
and timelines to get that equipment. "
Broad Interest
" Kentucky is really pushing this initiative, "
Watts affirms. " We hope to blaze
a trail and establish things as quickly as
possible because it can be lucrative for
the association's producer members. "
How lucrative? According to Cate,
on an MMBtu basis, a kilogram of hydrogen
is worth about $20-$25 an Mcf.
" That is a massive value upgrade, " he
observes. " The hydrogen market is going
to compete with diesel in class seven
and eight trucks, propane for forklifts,
and it will compete with renewable natural
gas as another clean energy source.
It is a huge opportunity. "
He predicts that opportunity will grow
as companies experiment with fuel sources
that do not emit greenhouse gases. Moreover,
HR 5376, The Inflation Reduction
Act (IRA) that was signed into law last
summer, contains numerous provisions
to encourage zero-carbon energy sources.
" Hydrogen has been in the headlines
and our organization recognizes a need
to help our members better understand
how they can participate, " Cate describes.
" It may take three-five years for these
opportunities to become significant, but
we should educate our members and policymakers
now so the foundation is ready. "
He points to hydrogen fuel cell investments
at companies including Cummins
and Toyota, as well as utilities and
distribution companies such as ATCO,
NiSource, New Jersey Resources and
Nexterra that are experimenting with
hydrogen production processes as well
as blending hydrogen into low-pressure
distribution systems. " Meanwhile, California's
rail industry faces massive headwinds
as it confronts the reality it is not
going to be able to run its locomotives
on diesel, so companies are really latching
onto hydrogen as a potential fuel source, "
Cate relates.
Watts estimates that 60%-70% of the
attendees at its hydrogen conference were
not KOGA members. Along with many of
the aforementioned businesses, representatives
also hailed from companies such as
Brown-Forman, LIFTE H2 and BASF.
" People came together to learn about
and discuss how to produce hydrogen,
safely transport it, price it and what sort
of policies and regulations are needed, "
Cate recounts. " We simply need open
and clear dialogue, because a rising tide
lifts all ships right now. "
Setting The Table
According to Watts, Cate's initial pitch
for a hydrogen conference was compelling.
" It was an easy sell, " Watts says. " However,
the question arose during our Member
Services Committee meeting of why our
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