Fortescue Future Industries and Fortescue Metals Group executive chairperson and founder Dr Andrew Forrest
Photo by: Creamer Media
JOHANNESBURG (miningwekly.com) – Proper investment in green hydrogen generation has the potential to provide full employment and economic growth for decades to come as well as protect the planet from devastating climate change, Fortescue Future Industries and Fortescue Metals Group executive chairperson and founder Dr Andrew Forrest accentuated at the FT Hydrogen Summit.
Forrest called on the world’s energy companies to provide energy that does not harm humankind and countries to introduce simple legislation to stimulate investment in green hydrogen.
“We need to hold our energy giants to account and to give us energy that doesn’t harm us and they’re stalling on that.
“They’ve got all these fantastic excuses and I’m just saying that we have got to stop falling for it. It’s just a stalling tactic that we need to change,” said Forrest in response to Financial Times associate editor Pilita Clark.
Referring to the introduction of the Inflation Reduction Act (IRA), he said: “The IRA is working because it’s simple. If you want to serve up something complex to a banker, you’re not going to get any money.”
The IRA subsidises every kilogram of green hydrogen that is generated and countries really serious about full employment and economic growth for decades to come should model their policies on the IRA.
He described Africa has having the best natural endowment for green energy generation and remains intent on investing heavily in Africa.
But the IRA is proving extremely important for short-term business build-up and this was his response to Fortescue’s likely investment play-out.
“The play-out will be that we’ll invest billions of dollars and eventually tens of billions of dollars in the United States.
“Now, I want to do at least that in Africa, Europe and Latin America, but in the short term, we’re responsible for other people’s capital. You’ve got to go to where the returns are highest and that is the United States.
“We can’t knock the IRA. I had 45-50 minutes of vigorous debate with President Biden persuading him to take the limit off the amount of capital that they would invest into green energy. My argument was that it will pay itself back in new investment, in economic growth and in taxes every three or four years,” said Forrest, who also pointed to the advantage of ready-built US infrastructure.
“You can transport your green energy down the grid, have your electrolyser cracking facility right next door to a major consumer, the pipeline is that long.
“It’s so efficient and then you are subsidised heavily to do all that, which is not surprising because we’re getting a new industry going,” he added.
China, with its robotics and automation, is where electrolyser production could come down the cost curve significantly as it enters the era of machines making machines.
“Our future is machines making machines – machines which make electrolyers, machines which make long-distance high-density cables, solar panels which can crack hydrogen in the panel. All these technologies are emerging quickly and China is capturing that technology, putting it into machines and then getting machines to make those machines,” he said.
Clark recalled that Fortescue Future Industries last year expressed intent to produce 15-million tons a year of green hydrogen by 2030 and questioned him on how much green hydrogen the company was producing currently.
In response, Forrest said it had taken Fortescue Metals Group seven years to pay its first dividend and Fortescue Future Industries was on its first year versus seven.
“So, cut us a bit of slack,” he said, recalling the world had cut the oil industry 200 years of slack and trillions of dollars worth of subsidisation.
“They started at $1 600 a barrel relative. We’re being held to a completely different standard. Even plain and simple iron-ore projects take a few years. If we go final investment decision on several projects this year, that’s moving at lightning speed,” Forrest calculated.
On the perception that more research needed to be done on green hydrogen, Clark put it to Forrest that investment could be made in building pipelines and infrastructure from which the small hydrogen molecule could escape.
Forrest in turn drew attention to the danger of vested interests slowing down what must essentially be done very fast and drew attention to what had happened in the tobacco industry as something to be avoided.
“It took around 35 years for the accepted science that tobacco smoke causes lung cancer to become mainstream and the tobacco companies and the oil and gas companies don’t have to win any arguments, they just have to cast doubt, then they’ve won, because they’ll just continue on,” he said, emphasising that green hydrogen generation is the route to follow.