Addressing the International Hydrogen Economy Conference in Broome earlier this month, Shell Development Australia General Manager - Joint Venture Operations and Exploration, David Johnson, said worldwide research and development activity in hydrogen and renewable energy technologies was currently very strong.

"Expenditure on research and development programs in the area of hydrogen energy research has been growing steadily for some years, with programs currently underway in the United States, Japan, the EU, Canada, Iceland, Italy, the UK, Singapore and Australia," he said.

Johnson said Australia's advanced energy infrastructure, vast natural gas reserves and expertise in gas processing, production and export would stand it in excellent stead to participate in any future transition to a hydrogen-based economy.

"With our world-class reserves of natural gas, we may even be better placed than the United States to develop a true hydrogen economy within the next 2-3 decades," Johnson said.

"Hydrogen could also be perfectly suited to provide the step-change for Australia to overcome its increasing dependence on imported crude oil as the country's self-sufficient position in liquids production is forecast to be steadily eroded over the next decade," he added.

One of Shell's two energy scenarios for the future sees hydrogen fuel cell technology playing a decisive role in the evolution of the global energy matrix, winning broad public acceptance and becoming widely adopted within a decade - much sooner than expected.

Under this scenario, fuel cells would account for 25% of new vehicle sales in OECD countries by 2020, with technological breakthroughs in the development of more efficient fuel cells and advances in hydrogen storage technology leading to the establishment of an extensive hydrogen infrastructure from 2040.

"China leads the way, with its huge and growing vehicle use and dependence on imported oil prompting it to use advanced hydrocarbon technologies - such as its massive LNG import industry - as a direct bridge to a hydrogen economy," Johnson said.

China also plays a key role in the second scenario, which envisages a transition in which incremental improvements in the internal combustion engine and the rise of hybrid cars delivers the required reduction in carbon emissions over the next 20-30 years.

"Under this scenario, natural gas represents the other key component of the changing energy mix over the next 20 years, with gas consumption soaring because of its economic and environmental advantages," he said.

"Of course, from an Australian perspective, we have already seen the beginnings of this process with the recent award of China's first LNG contract, the A$25 billion Guangdong contract, to Australia's North West Shelf Venture," Johnson added.

Both of Shell's scenarios identify natural gas as playing a vital role as a 'bridging fuel' over the next two decades.

Johnson said Shell has spent more than US$100 million in hydrogen development since 1999. In 2001, it announced plans to commit up to US$1 billion over five years to hydrogen and other renewable energy research, development, and commercial applications.

Shell, which is a leading player in hydrogen research and development with a number of joint venture projects underway worldwide - was interested in leading the development of this technology because of its potential to address a range of pressing global issues.

"As the world's energy system enters one of its most dramatic periods of change and upheaval since the industrial revolution, an energy economy based on hydrogen could resolve a host of pressing global issues such as security of energy supplies, air pollution and greenhouse gas emissions," Johnson said.

Rapidly accelerating urbanisation in the developing world and the spread of electrification on a massive scale are key factors contributing to a forecast 70% increase in carbon emissions by 2030 and worsening air pollution and health issues in the 'mega-cities' of the future.

Hydrogen has been recognised as a potential fuel of the future for decades, but is currently almost exclusively used as a feedstock or as an intermediate or specialty chemical.

The current focus of research and development is on hydrogen fuel cell technology. A fuel cell is an electrochemical energy conversion device, 2-3 times more efficient than an internal combustion engine in converting fuel to power. It produces electricity and heat using fuel and oxygen in the air, with water as the only emission.

Johnson said the National Hydrogen Study currently underway in Australia would provide an opportunity to establish Australia firmly on the global hydrogen map.

"As a global leader in hydrogen, Shell is keen to work closely with both State and Federal Governments on progressing Australia's path to a hydrogen economy, and to making an informed and useful contribution to the National Hydrogen Study," he added.