Fortescue & Nikola Insane Inexperienced Hydrogen For Trucking Play In Waterless Arizona Desert

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Inexperienced hydrogen is totally important for decarbonizing the large world warming drawback that’s present hydrogen use. Our present 120 million tons is a worldwide warming drawback on the size of all of aviation. You’ll assume that fixing that might be the very best precedence, and that deeply irrational options could be laughed out of legislatures and boardrooms.

Oh, no. Not within the early 2020s, when there isn’t any new market or choice for hydrogen that may’t be taken critically by far too many individuals. Hydrogen infused water? Certain, that’s really promoting. Hydrogen infused beer and cider? It’s really been performed. Hydrogen blimps that transport the fuel to the place it’s wanted utilizing the hydrogen as raise after which… ummm… uh… lie deflated on the bottom? Yup, there’s a agency that has this cockamamie concept.

However generally one thing pops up on my radar display screen that simply leaps past the merely foolish into being one thing that certainly have to be a joke.

This morning’s version of that may be a Fortescue/Nikola inexperienced hydrogen manufacturing facility within the Phoenix-bedroom neighborhood of Buckeye, Arizona, a small city with extremely outsized progress plans. Let’s tear this aside a bit.

Nikola, after all, is the truck manufacturing startup that’s fated to fail. It was fated to fail when it was based by now convicted fraudster Trevor Milton. That agency couldn’t make up its thoughts about whether or not it was pretending to construct battery electrical or hydrogen gas cell vehicles, and settled for hydrogen beneath Milton. I ascribed that to his previous promoting pure fuel.

You could bear in mind the video of the truck rolling serenely and quietly alongside a freeway that turned out to be serene and quiet as a result of the powerless truck had been towed to the highest of a hill and was rolling down it. Par for the course for hydrogen for power performs, which as I mentioned with Dr. Bruce McCabe on his FutureBites podcast not too long ago are principally Potemkin Villages.

The corporate is now promoting some electrical vehicles nevertheless it’s nonetheless pushing the nonsense concept of hydrogen for trucking uphill, simply because it did in its fraudulent promoting just a few years in the past. On this, it’s supported by the US hydrogen technique which I’ve analysed a few variations of and was established by Congress with the requirement to make hydrogen from fuel and coal, protect fossil gas infrastructure then given to the Division of Power as an alternative of the Division of Commerce. Yeah, not irrational in any respect, however not a rationality that features addressing local weather change or hydrogen’s decarbonization.

And it’s supported by the US transportation blueprint, additionally one thing I assessed, which is best positioned than the hydrogen technique because it’s really led by the appropriate Division, however nonetheless throws plenty of love on the dangerous concept of hydrogen for vehicles and different automobiles as an alternative of accepting the truth that every one floor transportation will electrify and leaning into that closely. Nikola isn’t alone in its delusions.

Nikola has its headquarter in Phoenix Arizona, a sprawling metropolis within the drought-stricken US southwest, blessed with sunshine, cactus and absurd quantities of empty house as a result of it’s uninhabitable with out 24/7/365 local weather management, together with for automobiles.

I’ve written concerning the Phoenix area a few occasions as I assessed the implications of local weather change on completely different areas world wide. I’ve really helpful that anybody with actual property within the space promote by the tip of the 2020s as a result of after that it’s going to start out getting very dangerous and go right into a steep decline.

Why? Historical past, world warming and water.

When water rights within the US southwest had been being allotted, the area was in concerning the wettest cycle in a thousand years. It didn’t final lengthy and now just about the whole southwest nook of the large nation is again into its regular parched situations. As a little bit of a touch about this, in case you vaguely bear in mind the award-winning Jack Nicholson movie Chinatown, it was set within the Nineteen Thirties and the whole plot of homicide, corruption, deceit and violence was fueled by water rights.

World warming rolling in hasn’t helped in any manner. One factor elevated warmth does is evaporate any water on the floor sooner. It tends to dump a lot much less common quantities of snow on mountains, resulting in dry springs and flood springs, and neither is conducive to accumulating sufficient water to get by means of the summer time and winter. That’s been taking place and it’s going to worsen. Within the coming a long time, the warmth in Arizona can be spiking more and more into the vary the place strolling round outdoors unprotected might be deadly.

Enter Buckeye, Arizona. Whereas Phoenix is pretending that it has a sustainable water plan because it sucks aquifers dry, doesn’t replenish them and ignores world warming’s inevitable impacts, the bed room neighborhood of Buckeye to the west is pretending that there’s going to be an infinite quantity of water, it simply takes good previous American ingenuity to get it to the town.

Proper now the town has about 120,000 residents in its huge, sprawling and desolate panorama. However that’s not sufficient for them. They need to develop to 1.5 million over the approaching years, in a geography that doesn’t have almost sufficient water for the individuals already there. They’ve expanded their municipal boundaries to be as giant as the town of Phoenix. In contrast to Phoenix, which requires new houses to have the ability to have a assured 100 years of water from current aquifers — delusional, however no less than a pretense of governance — Buckeye’s territory requires none of that.

They’re making an attempt to ascertain a desalination plant on the Gulf of Mexico, 150 miles because the Ukrainian crow flies, throughout the border in Mexico itself, after which construct a few hundred miles of devoted tubing by means of the border itself and thru protected lands to gas their supposed sprawl, their Ponzi scheme of suburbs which are fated to turn into worthless, empty and decay slowly within the arid warmth.

You’ll assume {that a} area like this, with out pure fuel for blue hydrogen or water for inexperienced hydrogen, would simply settle for that it’s not going to be manufacturing hydrogen, wouldn’t you? No, identical to the nice burghers of Buckeye, who assume water grows on the bushes in addition they don’t have, 40 organizations based SHINe, the Southwest clear Hydrogen Innovation Community. Don’t blame me for the capitalization or acronym, that’s instantly from their web site.

What organizations? The standard suspects. Hydrogen companies together with Nikola, Air Liquide, Hyve 1, Phoenix Hydrogen. Southwest Fuel which gained’t have a enterprise sooner or later until hydrogen is pumped into buildings at absurd expense and danger as an alternative of pure fuel. {The electrical} utilities which need to use the nuclear crops within the area to do one thing that may permit them to remain open and earn more money. Universities, which love good grant cash to consider issues. A state division of power.

What had been they hoping for? It was established to attempt to get a few of that nice US inflation discount act moolah flowing into the southwest. Sure, a area the place making hydrogen makes zero sense tried to set itself up as a hydrogen hub beneath the IRA. Not that the hydrogen hubs had been wise or will produce helpful outcomes for essentially the most half, with 4 of seven being arrange for fossil derived hydrogen and no less than California’s $12 billion devoted principally to the useless finish of hydrogen for transportation, however no less than the federal authorities had the sense to not throw hydrogen cash into Arizona and Nevada’s deserts to be burned in a bonfire of the inanities.

You’d assume this could be the tip of the story. Clearly this whole factor with Nikola goes to maintain rolling downhill till it reaches the sharp flip earlier than the gully when its non-working steering will result in it plunging by means of the flimsy guardrail. Clearly Buckeye’s delusions of large city sprawl will dry up. Absolutely nobody can be making inexperienced hydrogen amidst the rock and sand of the southwest.

Enter Australian mining large Fortescue, chaired by Andrew “Twiggy” Forrest, a person who can’t appear to like hydrogen for power performs sufficient. Forrest loves the IRA and has centered his efforts on harvesting as a lot of these subsidy {dollars} as his group may even whereas the mining facet introduced final yr that every one their mines could be electrical with none hydrogen, thanks very a lot.

Amongst its many good concepts, Nikola created a mission referred to as the Phoenix Hydrogen Hub. That seems to include a shell firm, 920 acres of desert and a few renderings. That was ample to get it invited to use for US DOE grant cash, which is the purpose of all this.

Fortescue acquired the hub from Nikola in July of 2023. Presumably the thought is that Nikola was too busy constructing vehicles to additionally develop a hydrogen manufacturing facility, and Fortescue is completely suited to develop it and supply hydrogen for Nikola’s large fleet.

A lot fallacious with this. A lot fallacious.

They will be sucking floor water out to make the hydrogen. How a lot? Nicely, they’re projecting making 11,000 metric tons of hydrogen a yr. Every kilogram of inexperienced hydrogen requires 9 liters of water. A liter of water weighs a kilogram as a result of metric for the win. In order that’s about 100,000 metric tons of water consumed yearly, or about 110,000 US tons.

That’s about 26 million gallons of water yearly. In a desert. The place water goes to turn into scarcer and scarcer. That’s about 500 indifferent dwelling’s price of use yearly beneath Phoenix space’s water restrictions. For hydrogen.

Subsequent up on the stupidity scale is the query of the place Nikola’s vehicles are going to be. Are all of them going to be in Phoenix and area? No, it’s a must to go far and large to seek out individuals silly sufficient or in areas throwing governmental cash at hydrogen vehicles to get clients.

One of many massive bulletins was that J.B. Hunt ordered 13 vehicles from Nikola. Solely three of these had been hydrogen vehicles with the remainder being really helpful battery electrical vehicles. There aren’t any hydrogen truck refueling stations in all of Arizona, however there are many electrical automobile chargers. Hunt is outwardly going to be utilizing the vehicles within the Phoenix area and in California, and I’m fairly certain that the hydrogen ones can be within the Golden State the place they’ll really get (very costly) hydrogen and nowhere close to Phoenix.

One other announcement was for PGT Trucking. It had signed a letter of intent to purchase 100 Nikola gas cell semi tractors to haul its flat beds, however to date it’s purchased a single battery electrical Nikola. Not a progress buyer for hydrogen demand within the Phoenix space, because it has 30 depots unfold far and large throughout the USA.

AJR Trucking, which does some logistics for the US Postal Service in addition to port-oriented drayage in California ordered 50 gas cell vehicles in Might. It hoped to get a few of them on the finish of 2023, however there’s zero indication that any have arrived. They will function them within the components of California that have already got heavy automobile hydrogen refueling stations, nowhere close to Phoenix once more.

As a reminder, a current evaluation I did discovered that California’s hydrogen refueling stations had been being fastened about 20% extra of the time than they really had been pumping hydrogen, and upkeep on them was costing 30% of the capital expenditure to construct them yearly. If AJR follows by means of, the chances that they may have deeply dissatisfied clients on prime of maximum gas prices may be very excessive. I wouldn’t be stunned if they’d quietly canceled their order and nobody felt it was clever to place out a press launch.

IMC ordered 50 gas cell vehicles on the finish of January 2024 for its California operations hauling containers from ports to warehouses and again. They’d battery electrical vehicles and weren’t getting 300 mile ranges. In fact, they purchased Volvo battery electrical vehicles with insufficient ranges — as a result of Volvo and different OEMs are persisting in jamming batteries and motors into current semi ladder frames as an alternative constructing them from scratch as Tesla does — and as an alternative of placing an order in for 500 mile vary Teslas, they put dangerous cash into Nikola gas cell vehicles as an alternative. And, after all, nowhere close to Phoenix.

If you’re noting a pattern that there are solely homeopathic quantities of hydrogen vehicles and none of them are in Phoenix the place Fortescue is meant to be constructing a inexperienced hydrogen manufacturing plant, you’d be observing actuality.

Is that this an issue? It certain is. Distributing hydrogen may be very costly. The US DOE’s most up-to-date estimate is that delivering hydrogen by liquid or gaseous hydrogen tank truck can be US$8 to $11 per kilogram. That’s simply the common price to place hydrogen within the truck, drive it to a refueling station and pump it into tanks on the station. That’s not the price of the hydrogen itself.

And that’s from native storage facilities for manufactured hydrogen close to refueling stations, successfully Amazon distribution facilities in city industrial parks however for hydrogen.

That’s not the fee for trucking it from Phoenix to the one US state that turned fixated on hydrogen when it was the one sport on the town 1 / 4 of a century in the past. Let’s see. 320 miles of freeway from Buckeye to San Diego. 345 miles to Los Angeles. 715 miles to Oakland. The price per truck load can be much more than $11 per kilogram. If this really got here to fruition, and I’m 99% certain it’s going to find yourself withering away, the chances are nice that the vehicles driving these routes could be diesel vehicles as effectively, simply because the vehicles delivering inexperienced hydrogen 4,500 kilometers from Quebec to Whistler BC for his or her long-abandoned gas cell bus fleet had been.

Fortescue and Nikola are pretending that hydrogen vehicles working by means of Phoenix would be the shoppers of the hydrogen. However there aren’t going to be any hydrogen vehicles in Phoenix to talk of. Town is dedicated to zero emissions buses, however they’re battery electrical first, and if they’ve any sense they’ll be dodging the hydrogen bullet. Sanity is more likely to prevail now that they’ve misplaced the hydrogen hub.

Amongst different issues, Phoenix ought to have a look at California’s hydrogen bus fleets, whose precise upkeep prices are 50% larger than even their diesel buses, by no means thoughts their less expensive to keep up battery electrical automobiles, one thing I discovered when trying on the state’s hydrogen transit efforts not too long ago.

So, there’s no water. There aren’t any hydrogen vehicles to place hydrogen into anyplace close to the Fortescue facility. There by no means can be. The closest place the place hydrogen is clinging onto a trucking market is tons of of miles away and it will likely be very costly to truck the hydrogen to it.

11,000 tons is sufficient for a fleet of about 500 hydrogen vehicles to refuel with 60 kg of the fuel day by day of the yr. The chances that Nikola will handle to construct and ship 50 hydrogen vehicles approaches zero.

Why? Nicely, as of November it was given an 81% likelihood of going into receivership. Its inventory has been buying and selling beneath the delisting clip stage of US$1.00 per share for the reason that starting of November. It’s bought vastly extra battery electrical vehicles, however as a result of it’s losing so many sources on hydrogen and gas cells, its battery vehicles are shoddy and required a significant recall of 209 vehicles to utterly substitute the battery packs at nice expense.

Precisely why would Fortescue assume that this was remotely price doing? It’s like asking why anybody does any enterprise with Ballard when the corporate has misplaced a mean of $55 million a yr since 2000, $1.3 billion in whole, has by no means made a revenue and its inventory is buying and selling at 2% of its March 2000 peak. Clearly each Nikola and Ballard are extraordinarily dangerous bets, but they limp alongside.

An enormous a part of that’s dangerous insurance policies by governments which hold throwing cash at hydrogen gas cell efforts. I’ve documented the worldwide efforts round this in a collection I name The Odyssey of the Hydrogen Fleet, which begins with lobbyists and rent-seekers convincing gormless however well-meaning governmental apparatchiks to place some huge cash in a pot earmarked “hydrogen transportation solely”. Then fleet operators salivate on the measurement of the pot, usually one million per van or bus and $15 million per two-car practice, and put a young that may solely be happy with hydrogen bids. Then they get the foolish issues, understand how laborious it’s to maintain them working — see California’s upkeep prices and energy throughout automobiles and refueling stations above — and as quickly as the federal government funding dries up, ditch the issues and go electrical.

I’m certain Fortescue’s plans for the Phoenix Hydrogen Hub relaxation on precisely one factor, whether or not the DOE will pony up a giant chunk of change, US$1.3 billion, to construct it. It made it by means of part 1 assessment apparently, however I haven’t been capable of finding out if it’s nonetheless within the hopper. If Jigar Shah and the Loans Program Workplace have any sense, they’ll use the large pink stamp with “Rejected” on it.