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Proposed licensing of hydrogen activities

The Department for Energy and Mining have published an Explanation paper on proposed licensing of Hydrogen activities. This should be read in conjunction with the draft Bill.

Hydrogen licensing

The Petroleum and Geothermal Energy (Energy Resources) Bill 2021 proposes to expand the current scope of provisions under the Petroleum and Geothermal Energy Act 2000 (the Act) to include the generation of hydrogen from means not already permissible under the existing Act, such as electrolysis of water. The proposed amendments intend to provide all hydrogen generation sectors the same leading practice regulatory and one-window to government regime as is currently provided to the oil and gas industries under the existing Act. It is proposed that this will be achieved by introducing specific Hydrogen Energy Licences into the Act (Appendix A). As a result, it is proposed that existing provisions under the Act – such as those for environmental approval (via Statements of Environmental Objectives), consultation, activity approval, compliance and reporting – will apply to hydrogen projects licenced under the Act.

Front cover of South Australia's Hydrogen Action Plan

Hydrogen Action Plan

In September 2019 South Australia’s Hydrogen Action Plan launched with an initial focus on green hydrogen from renewable energy sources. SA also offers a free Hydrogen Export Prospectus and Online Modelling Tool, released in October 2020.

CCS and hydrogen in the Cooper Basin

Santos are progressing clean hydrogen and by 2030 aim to use Carbon Capture and Storage (CCS) technology to improve economic feasibility of clean hydrogen while reducing Cooper Basin emissions. Santos state that Moomba has “the lowest-cost carbon capture and storage project in the world” with potential to inject 20 million tonnes of CO2 per year for 50 years.

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Hydrogen exploration in South Australia

On 11 February 2021 the Petroleum and Geothermal Energy Regulations 2013 were amended to declare hydrogen, hydrogen compounds and by-products from hydrogen production regulated substances under the Petroleum and Geothermal Energy Act 2000. Companies are now able to apply to explore for natural hydrogen via a PEL and the transmission of hydrogen or compounds of hydrogen are now permissible under the transmission pipeline licencing provisions of the PGE Act. The current review of the Petroleum and Geothermal Energy Act 2000 proposes it becoming the ‘one stop shop’ for hydrogen with a new name – the Energy Resources Act.

You can find information about current hydrogen exploration projects in Petroleum Exploration Licences in the State on the Projects of Public Interest webpage.

Petroleum exploration licences and applications lodged by companies with interest in hydrogen, showing locations of American Beach Oil Bore 1 and Ramsay Oil Bore 1.

Figure 1. Petroleum exploration licences and applications lodged by companies with interest in hydrogen, showing locations of American Beach Oil Bore 1 and Ramsay Oil Bore 1.

Potential exists for natural hydrogen plays in South Australia – Gaucher (2020) indicated that there are two main geological settings where hydrogen could be generated - Proterozoic crystalline shields and serpentinized ultramaļ¬c rocks in mid-ocean ridges and in land-based ophiolite-peridotite massifs. Using a hydrocarbon play analogue, once generated in basement source rocks, hydrogen needs a migration pathway to a trap with a reservoir and effective seal in sedimentary cover to build an accumulation - which then has to be preserved in a geological timeframe.

Potential natural hydrogen source rocks include ultrabasic rocks and iron-rich cratons (hydrogen generation from the oxidation of Fe(II) bearing mineral such as siderite, biotite, or amphibole by water) and uranium-rich basement with hydrogen generated by radiolysis of water (Gaucher, 2020). On that basis, potential basement sources of natural hydrogen may occur in the:

Visit the Minerals website for maps and information on basement geology, and access spatial datasets from SARIG.

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Historic drilling and exploration

Gas samples taken by LK Ward from Robe 1 (drilled in 1915 in the Otway Basin) were analysed by the Department of Chemistry and recorded anomalous hydrogen content (Ward, 1917).

Table 1. Analysis of gas samples taken from Robe 1.

WellRobe 1
Sample depth (m)1240.7
FormationEumeralla Fm
Gas Composition (%)
Carbon dioxide1.3
Oxygen3
Carbon monoxidetrace
Olefins and benzenesnil
Hydrogen (by direct determination)25.4
Methane39.6
Nitrogen (by difference)30.7

Hydrogen has also been detected in wells in the Cooper Basin and on Kangaroo Island and southern Yorke Peninsula (Zgonnik, 2020). Ward (1932, 1933 and 1941) reported the results of gas analyses from two shallow oil bores, American Beach Oil Bore 1 on Kangaroo Island and Minlaton Oil Syndicate Bore 1 (Ramsay Oil Bore 1, referred to as Minlaton Oil Bore by Boreham et al., 2021) drilled on central Yorke Peninsula, both of which recorded high levels of hydrogen. Gas samples were taken from the wells by Departmental officers (sample volumes were not reported) for analyses by the Works Chemist at the SA Gas Works.

Table 2. Analysis of gas samples taken from Ramsay Oil Bore 1 and American Beach Bore 1, with hydrogen levels highlighted.

Well Ramsay Oil Bore 1
(Minlaton Oil Syndicate Bore)
American Beach Bore 1
Sample depth (m) 240.8 262.1 507.8 187.4 289.5
Formation Parara Limestone Kanmantoo Group
Gas composition (%):
Carbon dioxide 0.2 0.8 0 5.3 0.52
Oxygen 0 2.4 1.2 4.3 3.55
Ethlyene etc. 0 0 0 0.5 0
Carbon monoxide 0 0 0 0 0
Hydrogen 76 64.4 84 51.3 68.64
Methane 7.5 7 0 2.6 4.68
Nitrogen (by difference) 16.3 25.4 14.8 36 22.61  

Photo of Minlaton Oil prospecting syndicate, Yorke Peninsula no 1 well, collecting gases from sludge pump. Photo no. N001671.In their paper presenting a screening methodology to scout for hydrogen occurrences in stable intracratonic settings above Archean to Proterozoic basement Moretti et al. (2021) referred to Ward’s reports on the hydrogen shows and identified ‘fairy circles’ on Yorke Peninsula, Kangaroos Island and in WA. ‘Fairy circles’ are depressions on land caused by venting of hydrogen or gas. They concluded that “The comparison suggests that Australia could be one of the most promising areas for H2 exploration, de facto a couple of wells already found H2, whereas they were drilled to look for hydrocarbons. The sum of areas from where H2 is seeping overpasses 45 km2 in Kangaroo Island as in the Yorke Peninsula.”

The fairy circles identified by Moretti et al. (2021) are roughly circular, pink ephemeral salt lakes that occur on the downthrown side of the Warooka Fault (MAITLAND and KINGSCOTE 1:250,000 Map sheets and MAITLAND Explanatory Notes). The lakes were studied in detail by Jack (1921) and King (1952) as they investigated salt and gypsum deposits in SA - Lake Fowler, the largest lake, has been a site of gypsum extraction (see also Crawford, 1965). Some lakes are fed by active springs in winter. Permo-Carboniferous glacial deposits (the Cape Jervis Fm consists of massive green-grey silts and erratics) are exposed on the margins of some of the lakes and erratics are exposed on some lake floors.

Recent work

Boreham et al. (2021) have published the most recent work on Australian natural hydrogen occurrences and present a comprehensive review of the diverse abiogenic and biogenic sources of natural hydrogen. They have used isotopic analyses to distinguish different sources of hydrogen and propose a source-migration-accumulation model for hydrogen exploration.

Their review of the hydrogen occurrence in Ramsay Oil Bore 1 concludes that “The Minlaton Oil Bore encountered moderately saline (NaCl rich with 9.44 g/L total salts) groundwater at 160 ft (48.77 m). Water radiolysis associated with a high radioactive element content of the granite basement is the most likely source for the H2. However, a contributing H2 source possibly results from the interaction of the heavy brines with the biotite granite within the fractured basement rocks of the Tickera Granite. The available seismic data  suggest that the basement faults in the vicinity of Minlaton Oil Bore extend into the Cambrian sediments (Fig. 8a). These faults could provide migration pathways for downward movement of heavy brines from the saline swamps as confirmed by the fact that the saline aquifer was penetrated by the Minlaton Oil Bore.” (Boreham et al., 2021).

The hydrogen occurrence recorded in Robe 1 may be related to high displacement basement faults, such as those bounding the Robe Trough and Lake Eliza High (see Fig. 2). Elsewhere in the basin basement faults have acted as migration pathways for mantle-derived carbon dioxide and trace gases like helium and nitrogen. The produced CO2 and the occurrences do not contain anomalous hydrogen contents, so there may not be a link with the hydrogen recorded in Robe 1, the source of which is not currently understood. Mantle-derived carbon dioxide was produced from Late Cretaceous reservoirs in the Caroline Field for decades and the gas contained only trace amounts of hydrogen, nitrogen and helium. CO2 was produced with natural gas from the Ladbroke Grove Gas Field for some years and again, hydrogen was not reported from multiple gas analyses.

Otway Basin, South Australia. Depth to top basement structure map, with location of selected wells. Figure 2. Otway Basin, South Australia. Depth to top basement structure map, with location of selected wells.

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Hydrogen in Australia

The Australian Department of Industry, Science, Energy and Resources provides information on Australia’s national hydrogen strategy, hydrogen hubs and useful web links.

Geoscience Australia has developed an Australian hydrogen mapping portal - the HEFT tool, and there is more information about the geology of hydrogen in Australia on their website.

The CSIRO’s Dr Ema Frery is currently undertaking research about field methodologies to better understand Australian hydrogen systems.

References

Boreham, C. J., Edwards, D. S., Czado, K., Rollett, N., Wang, L., Van Der Wielen, S., Champion, D., Blewett, R., Feitz, A. and Henson, P. 2021. Hydrogen in Australian natural gas: occurrences, sources and resource. The Australian Production and Petroleum Exploration Association Journal 61, 163–191.

Crawford, 1965. The Geology of Yorke Peninsula. Geol. Surv. S. Aust Bulletin 39.

Gaucher, E.C., 2020.  New Perspectives in the Industrial Exploration for Native Hydrogen. Elements 16(1):8-9.

King, D., 1952. Lake Fowler Gypsum Deposits. S. Aust. Min. Rev. 92, pp. 60·67.

Moretti, I., Brouilly, E., Loiseau, K. and Deville, E. 2021. Hydrogen Emanations in Intracratonic Areas: New Guide Lines. Geosciences 2021, 11, 145.

Jack, R.L., 1921. The Salt and Gypsum Resources of South Australia. Geol. Surv. S. Aust. Bull 8, 118.

Ward L.K., 1917. Report on the prospects of obtaining supplies of petroleum by boring in the vicinity of Robe  and elsewhere in the south-eastern portion of South Australia. Geol. Surv. S. Aust  Report Book No. 5/191.

Ward L.K., 1922. Prospects of the American Beach (KI) Oil Co. NL at the boresite, Section 134 Hundred Dudley. Geol. Surv. S. Aust Report Book 8/151.

Ward, L.K., 1932a. Inflammable gases occluded in the pre-palaeozoic rocks of South Australia. Geol. Surv. S. Aust Report Book 13/137.

Ward, L.K., 1932b. Government Geologist, 1932. The search for oil—notes by the Government Geologist. Geol. Surv. S. Aust, Mining Review 55, pp 39-42.

Ward, L.K., 1933. Inflammable gases occluded in the pre-palaeozoic rocks of South Australia. Trans. R. Soc. S. Aust. 1933, 57, pp 42–47.

Ward, L.K., 1941. Report on search for petroleum in South Australia. Geol. Surv. S. Aust Report Book 18/135.

Zgonnik, V., 2020. The occurrence and geoscience of natural hydrogen: a comprehensive review. Earth Science Reviews 203, 103140.

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