May 15, 2024

The technology that will drive transportation is the big question for policy folks.

Will it be:

• direct electricity
• hydrogen fuel cell
• lithium batteries
• other salt batteries
• direct charge or swap
• ammonia
• gas hybrid

Depending on the mode of transport, many businesses would have us believe the answer is going to change.

What is hidden behind the conversation about the technology and the debate about the last step product, is where the energy will come from. The last step product is really just a conversation about efficiency of storage and transport of the energy that will be created by renewable or nuclear electricity generation.

Efficiency of transport and storage is what drives the cost of energy because of our continued limited capacity to generate non-emitting electricity and that we do not use electricity only where it is produced.

Hydrogen, ammonia, lithium/salt cells, bio ethanol are all just a storage for energy that has come from electricity.

The continued problem with hydrogen is that it is extremely inefficient to create, store, and transport. Even with the new technology recently released (not at scale) in Australia where hydrogen is produced at 95% efficiency, storing the stuff is so expensive that it still cannot compete on a cost basis compared to just using electricity directly.

The gas needs to be cryogenically cooled/compressed, and stored in tanks that it basically seeps out of. Transportation of hydrogen is extremely tricky, for rather obvious reasons.

This is why almost all electrolyzer companies are operating at a loss. It is also why almost all hydrogen is still produced using natural gas, meaning that it is not just a not green fuel, it is a less green fuel than just burning natural gas directly.

This is not to say that hydrogen will not be part of our energy storage solution. The reality is that ammonia is probably the only way that we are going to be able to power our large container ships. Ammonia is generally produced from hydrogen. Unfortunately, we also need ammonia for producing food fertilizer so it will continue to compete with that need along with direct energy use.

Hydrogen at the point is a niche product that will likely just be an intermediary with ammonia for grid-scale energy storage and shipping uses.

Salt batteries—including lithium—are the favoured here. Even at low efficiency, they are easy to produce (and we know how to produce and transport them) and easy to charge. It is also easier to string some distribution wires than it is to build a hydrogen transport and storage facility.

In China, battery technology is farther ahead than the West. Not in technical capacity, but is use cases. The country is already using electric heavy duty trucks in ports and behind the gate activity in mines and refineries. It is using swappable batteries in large and smaller vehicles, allowing very fast "refuelling".

The data collected in these nationally organized trials of different battery use technologies is the real win. It allows companies to figure out which technologies work in real industrial situations and which are the best cost effective alternatives to fossil fuels.

This real world research of implementing already existing solution is something that the West seems incapable of figuring out how to do.

There are some industrial research programs looking at this, but capitalist countries think that market indicators and threats of regulation are enough to get capital to invest in solutions. This is a great process if you want a tonne of small businesses to trial tech, but it is not a very good way of making a transition away from fossil fuels at scale.

And, that is just trucking.

The industrial space is extremely large and we have not been able to move almost any of it towards new technology. The reason is that large industry is slow and evolutionary in application of technology. The costs of testing out brand new infrastructure is extremely high if the companies do not know already that it will be profitable. This is why real productivity gains are so hard to get in established capitalist countries.

Allowing the market to fiddle with different alternatives is not going to get us to where we need to go. State intervention is necessary in the research, development, and implementation of new production systems. Some countries are doing this and getting ahead in real-world implementation. Canada? Not so much.

The risk is that, for capital, there will never be a good time to update infrastructure here until after the rest of the world has established the best solutions elsewhere and already won the competition for investment.