The US Department of Energy (DoE) is about to unleash major investment in the hydrogen energy space, but there can only be a few winners. One stock which looks increasingly like benefitting from the program is BUY-rated small-cap Jericho Energy Ventures (TSX.V: JEV) (OTC: JROOF).
But what is the Hydrogen Hubs program and why is Jericho in such a great position?
H2Hubs: The Regional Clean Hydrogen Hubs Program
The DoE says its H2Hubs will be a central driver in helping communities across the country benefit from clean energy investments, good-paying jobs and improved energy security.
The department is set to distribute at least $7bn for the creation of six to ten regional hydrogen clusters, in a move which is expected to collectively boost hydrogen energy producers, infrastructure developers and off-takers.
The initiative has a focus on stimulating growth among both supply-side and demand-side hydrogen ventures, with the Biden Administration asserting that supporting the latter will help to “mitigate the risk of market failures and accelerate market scaling”.
But with more than 20 proposed hydrogen hubs vying for funding from the DoE, it’s hard to know who will come out of this on top when the department’s decision is announced in Fall 2023.
However, world-renowned energy analysts Rystad Energy and Hydrogen Insight have released a list of the ten proposals most likely to score some major funding from the program.
The duo’s full list is:
Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES)
HALO Hydrogen Hub
HyVelocity Hub
Appalachian Regional Clean Hydrogen Hub (ARCH2)
Northeast Regional Clean Hydrogen Hub
Midwest Alliance for Clean Hydrogen
Obsidian Pacific Northwest Hydrogen Hub
Western Inter-States Hydrogen Hub (WISHH)
Southeast Hydrogen Hub
Heartland Hydrogen Hub
But we’ve picked out the second-placed HALO Hydrogen Hub as a key one to watch here.
What is the HALO Project?
The HALO Hydrogen Hub, based in Oklahoma, Arkansas and Louisiana, is in the second spot on the list after having applied to receive as much as $1.25bn. The three states collaborating on the project are well-placed for approval based on existing infrastructure.
The trio possess a combined total of ten green and 15 blue hydrogen projects within their borders and benefits from existing CO2 transport infrastructure.
The project’s approach is to employ public-private partnerships that lead to the deployment and development of an extensive hydrogen network across the three constituent states. It would then ultimately seek to integrate this infrastructure into a national hydrogen network.
HALO has also outlined goals for the support of transformative technologies and investments that can drive lower costs and increase the adoption of hydrogen to reduce carbon and other emissions.
As such, participants in the project stem from all parts of the value chain, from feedstock to production, transportation and delivery, storage and end-use.
HALO project stakeholders include energy industry giants Shell, Baker Hughes, Halliburton, NextEra, and General Electric.
But analyst-backed small-cap outfit Jericho Energy Ventures is a key name among the companies which are well-poised to benefit from this hub receiving funding.
What is Jericho Energy Ventures?
Oklahoma-based Jericho Energy Ventures (TSX.V: JEV) (OTC: JROOF) embraces the green transition from both sides. That’s because Jericho has various joint-venture hydrocarbon properties generating cashflow which it is reinvesting in the richly valued hydrogen industry.
Of course, it's this extensive reinvestment in the hydrogen industry that has resulted in the company backing the HALO project. But what hydrogen technology does Jericho bring to the project?
Jericho’s main focus is its zero-emission boiler technology developed by its subsidiary Hydrogen Technologies, for the industrial heat and steam industry. As industrial and hard-to-abate businesses seek ways to cut emissions, Jericho’s innovative DCC™ hydrogen-fueled steam boiler offers a compelling option.
It’s this boiler technology which Jericho is hoping can play a major part in the HALO Hydrogen Hub.
Brian Williamson, CEO of JEV, explained:
"Jericho is proud to support the HALO Hydrogen Hub's goals of spurring transformative technologies and investments that will lower costs and increase adoption of hydrogen, as well as reduce carbon and other emissions.
“For HALO, our submission included the utilization of our zero-emission DCC™ in partnership with one of the largest food companies in the U.S., illustrating the potential and breadth of markets for our DCC™ and the role we expect it to play in decarbonizing the commercial and industrial heat and steam markets nationwide."
Looking at the company more broadly, something in common with Jericho’s portfolio of technologies solves critical issues in the hydrogen value chain and its portfolio also includes investments in two notable hydrogen technology businesses Supercritical Solutions and H2U Technologies.
These technologies are a stroke of luck for hard-to-abate sectors such as steel, cement, pulp and paper, food and beverages, and petrochemicals that struggle to reduce their carbon emissions. Therefore, Jericho’s unique portfolio could offer investors a ticket to ride the green wave.
