Pardon the “trending” first half of the title and its weird juxtaposition with its second half. I’ll get to that in a minute. To clarify, the Russian invasion of Ukraine won’t result in cheap hydrogen raining down. A chance of H-bombs may be more likely. Or Tesla imploding… well, that might happen for entirely unrelated reasons. That said, Russia’s incursion sparks both geopolitical turmoil and my curiosity as it strengthens the case for hydrogen vehicles.
Why are energy prices rising?
Like any war, the first thing to go out the window is cheap commodities. And if you have visited the pump lately, you will have noticed fuel prices heading for the moon. Already crude oil is passing USD100 per barrel, with no reprieve in sight for stretched wallets. Its rate of ascent is certain to give drivers PTSD flashbacks to the 2000s commodities boom, where limbs were an acceptable trade for fuel.
You can thank Russian premier, Vladimir Putin, for this uptick in prices. His military adventures into Ukraine have forced the rest of the world to sanction trade with Russia. Companiers across industries were quick to back out of the nation and traders are already refusing Russian fossil fuels.
Pulling the plug on trade is a crushing blow for any nation, but not for Russia. Unlike its European counterparts, Russia is quite self-sufficient when it comes to vital resources needed to run a modern society. In fact, the country is a major player in supplying the rest of the world.
Russia is responsible for eight per cent of the global supply oil. That figure ranks the nation second to Saudi Arabia in global oil exports. That’s not all, the rest of Western Europe is counting on Russian gas to literally keep their lights on. 25.5% of oil, 43.9% of gas, and 54% of solid fossil fuel imported into the European Union come from Russia. In effect, making Russia the single largest extra-EU energy supplier in all three categories.
The political price of energy
Putin’s gamble for Ukraine couldn’t come at a more opportune time. Germany, Western Europe’s biggest player, is in the midst of a energy transition from nuclear to renewable solar and wind power generation. And Russian gas was to be the “bridge” for that energy transition, so much so that Germany and the United States warned Russia not to politically weaponise the Nord Stream 2 pipeline.
Nevertheless, Putin knows that the world needs Russia’s resources more than Russia need the world’s money. By holding the key to Europe’s energy demands, he hoped that it would have kept his rivals in a more compliant mood towards his ambitions.
Turning the taps off for an energy supplier of Russia’s significance will cause seismic ripple effects. Despite all its posturing, the Biden administration is hesitant to officially sanction Russia’s oil and gas exports. Not with the spectre of soaring inflation and plummeting popularity hanging over head.
The next revolution?
At this point it is easy to say that this crisis will no doubt play into the electric cars’ favour. Just as how commodity price hikes pique the public’s interest in fuel-efficient vehicles, so too will the current price inflation do the same.
That said, the outcome hinges more on the general populace being able to afford electric cars in the first place. That’s a story that we have covered before. And if history is correct, a recession always follows a surge in oil prices as it demolishes spending power.
Anyway, let’s leave the debate on electric cars behind. We already know that the future is likely to be electric. Not so much because of its popularity on social media, but because of the level of manufacturer commitment. The momentum is there, and the ball is well and truly rolling in its favour.
Moving on from that, what the Russian invasion of Ukraine is demonstrating is the vulnerability of energy itself. A vulnerability that explains why East Asia is still committing itself to the case for hydrogen vehicles.
East Asia’s commitment to hydrogen
For years, Japan’s insistence on developing hydrogen vehicles have perplexed industry observers. Some say it is the Japanese being persistent in sticking to a path they have committed. Others reason that it is the Japanese being Japanese and merely looking for practical solutions that won’t bother their customers.
The one thing that is certain is that developing a hydrogen economy is ruinously expensive. Already the Japanese government is pumping USD3.4 billion towards incentivising the hydrogen economy.
Likewise, South Korea is also committing USD2.34 billion towards developing a hydrogen infrastructure. So much so that South Korea has the third-largest public investment for hydrogen, behind Germany and Japan.
Yet, for all the money splashed around, industry observers – mostly english-speaking and outside Asia – slag their commitment to hydrogen. Elon Musk’s immortal “fool cells” quip comes to mind, along with accusations of it being a “dead-end transport solution”.
While hydrogen is showing promise in long-haul trucking, that sector alone can’t support the creation of a comprehensive hydrogen infrastructure.
Everybody knows that hydrogen fuel is more of an “energy carrier” and not an “energy source”. The emission problems from Brown hydrogen and Black hydrogen production are well-documented. And hydrogen economy proponents even admit that initial large-scale hydrogen production will rely heavily on fossil fuels. These criticisms add further fuel to the speculation that the case for hydrogen vehicles is nothing more than another Big Oil ploy.
Hydrogen – Hope for a changed nation
The thing is, hydrogen’s biggest proponents, the Japanese, are notoriously pragmatic, even to a fault. A society committed to running their trains on time to the minute won’t commit itself to hubristic pie-in-the-sky projects that have no practical benefit.
Is there something that the Japanese understand that observers in the American and European bubble aren’t seeing? Well, yes. The Japanese insistence on developing hydrogen is not rooted in cars, as the media keeps banging on about. It is grounded in an existential need far bigger and unique to its region. A peek into that need came at the 2015 Tokyo Motor Show.
Hope behind the case for hydrogen vehicles
The 2015 Tokyo Motor Show was the stage for global debut of the production Honda Clarity. After decades of trials and test, Honda were confident that the Clarity was ready for the public. Well, for the Japanese public at least.
While the world’s media were dazzled by its futuristic powertrain, its ability to power a house intrigued me. Japan, one of the world’s most advanced countries are converting its vehicles into home generators, like an impoverished basket case. Hardly the ground-breaking application of hydrogen fuel cells we dreamt it would be.
What many foreigners didn’t grasp was the pragmatic reason behind the hydrogen Honda’s house-powering ability. The catalyst for this is the tragic 2011 Tohoku earthquake, or infamous for the Fukushima Daiishi nuclear disaster, which shook Japan’s energy policy.
Japan’s energy starvation
Before the earthquake, Japan rivalled the United States and France in nuclear energy generation. Being a bustling advanced economy with a huge population, Japan relied heavily on nuclear energy to meet its needs. The country even had a goal to increase its nuclear power supply share to 50 per cent by 2030.
After the earthquake and subsequent disaster at Fukushima, Japan quickly reversed that plan and started decommissioning reactors. Of the 54 of Japan’s nuclear reactors that were operational up to 2011, only nine remain by 2021.
Decommissioning the reactors left a huge shortfall in Japan’s energy needs. In the years following the disaster, the Japanese government encouraged citizens to curb their energy consumption by reducing air-conditioning and shutting off elevators.
The disaster even made the Japanese rethink its EV charging standard, CHAdeMO. In 2014, CHAdeMO introduced a vehicle-to-infrastructure (V2X) protocol. And as of 2021, remains the only charging standard with a two-way V2X energy-feeding interface. That same standard is also used in the Honda Clarity.
Why electric cars aren’t the answer?
An astute colleague of mine recalled a 2013 conversation with a Japanese auto executive on the country’s reluctance to develop electric cars. The executive explanation for going hydrogen rather than electric was pragmatic. Simply put, Japan’s power grid doesn’t have the leeway in its capacity to support their car population going all-electric.
It isn’t as though Japan has a quick remedy on hand to solve its tight energy budget. Already the government is walking back its decision to shut down all its nuclear plants with the country’s older reactors being recommissioned. This about-face highlights a worrying need for energy in Japan.
All these limitations might sound like a silly excuse. After all, most automakers have assured the public that electricity grids can handle the load of everyone charging their EVs at once. What is unique with Japan?
The energy dilemma and the case for hydrogen vehicles
As the world becomes more globalised and connected, energy is playing a bigger role. However, it is one vital aspect people in developed countries rarely think about.
What many don’t realise is the vulnerability of East Asia’s energy supply to geopolitical tensions. Currently, Japan and South Korea, two of the region’s biggest hydrogen proponents, depend heavily on imported fossil fuels for their energy needs.
The bulk of those fuels passes through the Strait of Hormuz and the South China Sea – two geopolitical fault lines. These regions are ripe for a flashpoint that would result in a blockade at the very least. Or, at the very worst, go nuclear.
Unlike the United States and Europe, which can call on their neighbours to address energy shortages, Japan and South Korea stand alone. From a geopolitical perspective, both countries are surrounded by leery neighbours with historical and ideological animosity.
Things are all fine and dandy now, but who knows what the political situation will be like in 10 years? 50 years? Or, as the Japanese tend to frame their thinking, in a hundred years? Who knows, the Mongolians might think thrid time is the charm!
Likewise, South Korea finds itself in a similar situation. The tiny republic imports 95% of its energy through those same politically sensitive shipping routes.
Domestically, the nation recognises its lack of conventional and easily exploitable renewable energy resources. And it isn’t too keen on being the slightest bit dependent on its neighbours.
As Russia’s grip on the EU’s energy is demonstrating, it is easy to make a region bend its knee. What is stopping a similar situation from occurring in Japan and South Korea? If Iran or China starts exerting its military might over those shipping lanes, Japan and South Korea would collapse quickly.
Isolated islands of little options
All these issues are part of the case for hydrogen vehicles. At the end of the day, East Asia needs energy. Lots of it. Solar and wind alone can’t power the needs of their entire society. There simply isn’t enough land for the former and too much risk of hurricane damage with the latter.
Compounding this is China’s position as the world’s biggest solar panel supplier, which is a significant concern for Japan. They wouldn’t want the biggest economic and ideological rival having a stranglehold on their solar energy generation.
There are also major concerns when it comes to switching Japan’s electricity grid to run completely on renewables. It is a move that requires rebuilding Japan’s archaic system. Furthermore, engineers can modify existing power plants and industrial machinery to run on hydrogen, saving time and billions.
That is why, despite the inherent inefficiencies of hydrogen production, East Asian economies are fine with pursuing it as an energy conduit. The lack of natural resources and amicable neighbours has defined these two societies for nearly a century. And will continue to do so for years to come.
By internalising its own “fuel source” for power generation, industry, and vehicles, they are securing their energy independence. This in turn ensures the future security and viability of their societies.
Creating the vaunted hydrogen economy isn’t about making a case for hydrogen vehicles. It is a small part of the bigger picture. One that automotive journalists and Western observers can’t comprehend from their European and American bubbles.
Building a civilisation on the political goodwill of other nations is far less predictable than running on sunshine and wind. As Russia has recently demonstrated, all it takes is one man’s ambitions to send it all crumbling down. You’d think we ought to have learnt that by now.