Bill Gates-backed Startup Says a Global Gold Rush for Buried Hydrogen is Picking Up Momentum

Koloma, a U.S.-based startup backed by billionaires Bill Gates and Jeff Bezos, says it is leveraging its expertise in the fossil fuel industry to power a new global pursuit for buried hydrogen, which some are calling a "white gold rush."

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The startup aims to tap into geologic hydrogen, also known as white, gold, or natural hydrogen, a resource found in its natural state beneath the Earth’s surface. This hydrogen is produced through high-temperature reactions between water and iron-rich minerals underground.

A surge in interest over the past few years has prompted energy analysts at Rystad Energy to describe the global race to extract geologic hydrogen as a “white gold rush.” Koloma believes this clean fuel could play a pivotal role in the world's transition from fossil fuels to renewable energy sources.

Koloma is not alone in its pursuit of geologic hydrogen. Exploratory efforts for the low-carbon energy source are underway in countries including the U.S., Canada, Australia, France, Spain, Colombia, and South Korea. Many industry experts are hailing it as a potential game-changer for the clean energy sector.

"We can use expertise and service providers that have traditionally served the oil, gas, and mining industries and quickly put them to work in driving the discovery of carbon-free resources," said Pete Johnson, CEO and co-founder of Koloma. “Leveraging and modifying what already exists will allow us to mature the industry faster."

Leveraging Fossil Fuel Expertise for Clean Energy

The company believes that geologic hydrogen presents an opportunity to repurpose and adapt existing fossil fuel industry expertise to meet the needs of a sustainable energy future.

Based in Denver, Colorado, Koloma has raised more than $305 million since it was founded just a few years ago. Its backers include Khosla Ventures, Amazon’s Climate Pledge Fund, United Airlines, and Breakthrough Energy Ventures, a climate and technology fund established by Bill Gates in 2015. Breakthrough Energy’s investors also include notable figures such as Ray Dalio of Bridgewater Associates, Richard Branson of Virgin Group, and Jack Ma of Alibaba.

Koloma’s ability to attract investment from such prominent backers highlights the growing optimism surrounding geologic hydrogen's potential to be a primary energy source. Unlike hydrogen that is derived as a byproduct from other energy processes, geologic hydrogen is found naturally, which gives it an advantage in terms of carbon impact.

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A “White Gold Rush” for Hydrogen

Hydrogen has long been considered one of the key pillars of the global clean energy transition, offering a cleaner alternative to fossil fuels like coal, oil, and natural gas. Most hydrogen is currently produced through fossil fuels in a process that generates significant greenhouse gas emissions. However, geologic hydrogen offers a potential solution, being naturally formed beneath the Earth’s surface and capable of being extracted with a minimal environmental footprint.

A dramatic upswing in the number of companies searching for geologic hydrogen has driven what Rystad Energy has called a “white gold rush.” The consulting firm has pointed out that the excitement around geologic hydrogen stems from its potential to be a “game-changer” in reducing the carbon footprint of many industries, including manufacturing, energy production, and transportation.

Johnson stated that one of the intrinsic benefits of geologic hydrogen is that it could be tapped as a primary energy source. “Geologic hydrogen should have a very low carbon impact, but also a tiny land footprint and very low water impact," he said, adding that these factors make it particularly appealing as the world seeks to move away from fossil fuel dependence.

A Role in U.S. Decarbonization Efforts

When asked about the potential for geologic hydrogen to contribute to the decarbonization of the U.S. economy, Johnson was optimistic. He pointed out that domestic hydrogen resources could help reduce reliance on hydrogen imports and increase the country’s energy independence.

“Russia and Ukraine were both large exporters of hydrogen-derived ammonia, the building block of most modern fertilizer products," Johnson said. "Since their conflict began, the world has become more aware of the importance of a domestic ammonia supply. Geologic hydrogen resources in the U.S. will allow us to scale up our domestic ammonia production and become a net exporter, even as we dramatically reduce the carbon footprint of these products."

As Johnson explained, hydrogen-derived ammonia is a critical product in the global supply chain, particularly for agricultural and industrial uses. By scaling up domestic production of geologic hydrogen, Koloma believes the U.S. can meet both domestic and global demand while reducing carbon emissions and bolstering its position in the global energy market.

Challenges Ahead

While the potential of geologic hydrogen is exciting, there are still several challenges ahead. Geoffrey Ellis, a research geologist at the U.S. Geological Survey (USGS), told CNBC earlier this year that while there is likely a vast amount of naturally occurring hydrogen stored underground, the industry is still in its infancy. Ellis estimates that just a small percentage of geologic hydrogen recovery could be enough to supply the world’s energy demand for 200 years.

Despite this promise, Koloma acknowledges that significant roadblocks remain. “As with any exploration business and any new technology, there are still many challenges to overcome to unlock geologic hydrogen’s potential,” Johnson said. These challenges include improving the efficiency of extraction, developing the necessary infrastructure for transportation and storage, and addressing environmental concerns related to extraction processes.

However, Johnson is optimistic about the company’s ability to tackle these challenges, particularly given its financial backing. “Koloma is fortunate to have backing from diverse investors — some who are focused on the technology and data advantages we are building, others who see the massive potential returns of large resource discovery, and others who are most enthusiastic about the cost advantages of low-carbon derivative products,” Johnson said.

He added that Koloma is well-positioned to take on these challenges "the right way, thoughtfully and patiently."

The Road to a Clean Energy Future

As the world seeks to accelerate the transition from fossil fuels to clean energy, geologic hydrogen could play a significant role in meeting global energy needs. While there are still many hurdles to overcome, Koloma believes that with the right investments, technology, and expertise, geologic hydrogen can become a crucial part of the energy mix and help drive the world toward a low-carbon future.