Denver-based startup Koloma has secured $91 million in funding from investors including Bill Gates to drill natural hydrogen in the U.S. Midwest, a move that could significantly contribute to the clean energy revolution. The company plans to take advantage of incentives provided by the U.S. Bipartisan Infrastructure Law and the Inflation Reduction Act, specifically the hydrogen production tax credit (PTC). Natural hydrogen, also known as gold or white hydrogen, has gained attention as a promising renewable energy source. Unlike other types of hydrogen, it is a primary source of energy like fossil fuels but carbon-free. Koloma believes it can access a regenerating supply of underground hydrogen through a process called serpentinization, which involves breaking down iron- and magnesium-based minerals deep beneath the earth’s surface to produce hydrogen-rich fluids and other minerals. The company claims that this method of natural hydrogen production could deliver approximately 23 million tonnes of hydrogen each year, equivalent to nearly a quarter of the current global demand. Koloma refers to this regenerative gas as geologic hydrogen, which has clean and environmentally-friendly attributes. It requires no external energy or water inputs, has a low carbon footprint compared to electrolysis, and causes minimal surface disruption. Koloma’s co-founder and CTO, Tom Darrah, an Earth sciences professor and hydrogen extraction expert, stated that hydrogen is present on every continent and the scale of its availability is significant. Darrah has 16 patents related to hydrogen extraction, including the use of AI-assisted laser imaging and satellites to identify potential sites for natural hydrogen storage. The company analyzes samples from its Midwestern wells in Darrah’s laboratory at Ohio State University to identify locations with the highest hydrogen volume and purity. Koloma has not disclosed the exact location of its wells or the timeline for commercialization. The startup operated in stealth mode until its recent interview with Forbes magazine, during which it revealed the $91 million investment, making it the most-funded company in the hydrogen space. The funding came from Bill Gates’ Breakthrough Energy Ventures, as well as other climate investors such as Energy Impact Partners, Evōk Innovations, Prelude Ventures, and Piva Capital. Although the exact amount contributed by Bill Gates was not disclosed, the billionaire has been a proponent of hydrogen, considering it the ‘Swiss Army knife’ of renewable sources. Koloma’s revelation of vast reserves of clean, regenerative geologic hydrogen beneath the earth’s surface has the potential to revolutionize the energy transition, especially in light of the current climate crisis. However, utilizing hydrogen comes with challenges due to its flammable nature. When used in fuel cells, hydrogen can generate clean energy with only water as a byproduct. It can be used as a carbon-free fuel for vehicles, power generators, and various industrial applications. Toyota, for example, plans to sell 200,000 hydrogen-powered vehicles by 2030. Koloma believes that geologic hydrogen will be a cheaper and less energy-intensive alternative to other types of hydrogen. While the company has not disclosed its commercial operations, it could generate tens of billions of dollars in revenue if its venture proves successful. The current global hydrogen market is valued at over $120 billion, with an annual consumption volume of 100 million metric tons. Industry experts predict that geologic hydrogen could potentially replace fossil fuels, leading to a market worth $250 billion by 2030 and $1 trillion by 2050, according to Goldman Sachs. This growth is crucial as hydrogen plays an increasingly important role in achieving net-zero emissions by 2050. The International Energy Agency (IEA) states that strong hydrogen demand and the adoption of cleaner technologies for its production will significantly contribute to its Net Zero Emissions Scenario. Several governments, including the U.S., EU, UK, Germany, Canada, and India, have implemented subsidy programs to support the development of green hydrogen and make it a viable sector in the clean energy market. Koloma intends to apply for subsidies under these programs. The company plans to commence commercial operations once the demand for hydrogen increases, which is expected to happen in the near future. Through its geologic hydrogen production, Koloma is paving the way for a sustainable future where drilling clean hydrogen is as common as drilling dirty fossil fuels.
