Big Oil’s Hydrogen Future

How’s this for irony: The clean fuel of the future could end up being developed by the oil titans of today.

While the headlines are filled with talk of solar, wind and ethanol, the oil and gas industry is quietly gambling billions of dollars that natural gas and its controversial liquefied counterpart will replace oil and coal in the energy economy of the future. And not just for burning. Increasingly, experts see natural gas as the only economically feasible way to build a new, less-polluting, hydrogen-based economy–a vast market allowing the oil industry a second act at the center of a transportation revolution.

The reason: Hydrogen engines can run on fuel derived from natural gas more cheaply than other currently available feedstocks. Natural gas contains only one carbon and four hydrogen atoms per molecule, making it the cleanest of fossil fuels. Hydrogen can be made cheaply from natural gas through a process called “steam reformation,” which separates the carbon from the hydrogen. Currently, the carbon byproduct is released into the air, but there is the possibility of it being sequestered, which technology oil majors like Royal Dutch Shell (nyse: RDSA – news – people ) and Exxon Mobil (nyse: XOM – news – people ) are exploring.

Forbes