Episode Summary
Executive Summary: Pete Johnson explains Coloma’s strategy to discover and commercialize geologic hydrogen, starting with the Midwest where rich rift geology overlaps with high ammonia demand. He argues natural hydrogen could enable low-cost, local fertilizer production and other uses, but success depends on finding sizable traps, gathering seismic data, and building infrastructure and partnerships around the resource.
Main Topics: What Coloma is and why natural hydrogen matters (Priority: 5/5): Johnson frames Coloma as an exploration company aiming to unlock geologic hydrogen, potentially the first new primary energy source since nuclear power. He explains the company’s origins, brand, and thesis that natural hydrogen could reshape energy and industry. Midwest ammonia and fertilizer market as the first beachhead (Priority: 5/5): The discussion centers on why Iowa, Kansas, and Minnesota are attractive: the mid-continent rift sits under the U.S. corn belt, where ammonia demand is highest and imported fertilizer is expensive. Local hydrogen could reduce costs and supply risk. Exploration geology, data, and trapping concepts (Priority: 5/5): Johnson details where hydrogen is likely to be found, emphasizing rifts, ophiolites, and trap structures. He describes the need for 2D/3D seismic, source-rock analysis, and large data sets to identify commercially viable accumulations. Commercialization pathways and resource sizing (Priority: 4/5): He compares use cases: large ammonia plants need very large discoveries, while smaller hydrogen accumulations may still work for distributed power generation, especially in places like the Philippines. Different field sizes map to different business models. Company evolution, capital, and exploration strategy (Priority: 4/5): Coloma evolved from a lab/testing business into a data-driven exploration platform. Johnson says the firm has raised significant capital, amassed a huge land position, and plans to explore aggressively while later selling down assets to development partners. Experience, skepticism, and the role of policy (Priority: 4/5): Johnson shares his background in clean tech, methane pyrolysis, oil and gas investing, and data-driven hydrogen work. He also warns against greenwashing and argues the industry needs solutions that can eventually compete without perpetual subsidies.
Key Arguments: Natural hydrogen is compelling because it may be a new primary energy source and can be produced without the carbon intensity of fossil-based hydrogen. The Midwest is a uniquely strong first market because geology and ammonia demand overlap, creating a local supply-and-demand match. Hydrogen is not impossible to move, but infrastructure is expensive; therefore, co-locating production with end use is often the best economics. Large-scale ammonia production needs substantial discoveries, but smaller hydrogen fields can still support distributed power or niche industrial uses. Exploration success depends far more on data, seismic imaging, and basin ranking than on drilling alone; the hard work comes before the well is drilled. The business should be judged by whether it can produce commercially flowing wells, not just by scientific curiosity or policy support. A credible clean hydrogen business must have a path to survive without perpetual tax credits or other long-term subsidies.
Data Points: Capital raised: more than $400 million - Funding from investors including Khosla Ventures, Breakthrough Energy Ventures, Amazon’s Climate Pledge Fund, Osaka Gas, and Mitsubishi Heavy Industries. Exploration rights: roughly 20 million acres - Coloma’s land position across the U.S. mid-continent, the Philippines, Australia, and Canada. Historic database size: 25 years - Proprietary subsurface hydrogen database used to guide exploration. Rock samples analyzed: 1.5 million rocks - Johnson says Coloma has sampled rocks worldwide to improve basin selection and source-rock understanding. Hydrogen pipeline infrastructure: 1,600 miles - Evidence that hydrogen can be transported, though building pipelines remains expensive. Midwest ammonia imports: 2 million tons - The Midwest imports large volumes of ammonia despite being the largest ammonia-consuming region per acre. Regional price premium: $150 per ton - Iowa, Kansas, and Minnesota pay an ammonia premium relative to Texas due to transport and supply imbalance. Hydrogen cost from natural gas: about $1.30/kg - Johnson cites U.S. natural gas-based hydrogen production economics as a benchmark. Hydrogen cost in Asia: about $2/kg - He cites higher LNG-linked hydrogen costs in Asia. Current ammonia plant scale: 500,000 to 1 million tons/year - Representative world-scale ammonia facility size used to back into hydrogen demand. Hydrogen needed for a large ammonia plant: about 100,000 tons/year - Approximate hydrogen requirement for a 500,000-ton/year ammonia facility. Commercially interesting reservoir size: ~200,000 tons - Johnson’s minimum rough reservoir size for a meaningful ammonia-oriented discovery over 20 years. Small ammonia conversion scale: 10,000 tons/year hydrogen - He notes smaller midstream-like ammonia applications may work at this scale. Philippines energy import dependence: 98% of energy imported - Used to explain why local hydrogen could be valuable for power generation there. Philippines seep example: 10 MW - He cites a hydrogen seep yielding enough energy potential for local power applications. Field-size example: 4 TCF - Johnson says one initial estimate for a drilled target may be roughly four trillion cubic feet equivalent. Exploration success probability: 10% to 20% - Typical frontier-well success odds he cites from oil and gas exploration analogs. Typical onshore well cost: ~$5 million - He contrasts onshore exploration costs with much more expensive offshore wells. Starting acreage: 200,000 acres - He says Coloma grew from about this amount to 20 million acres. Timeline to wells: about 9 months - Expected time before a faster drilling campaign begins. Drilling cadence: one well every month or two for 2-3 years - Projected exploration pace after initial seismic and permitting work.
Pivotal Quotes: "If this works out the way we think it could, it'll be a big dogleg in the way we think about energy." — Pete Johnson: Describing the significance of natural hydrogen as a potentially transformative energy source. "There’s no better place on God's earth to go find natural hydrogen that's really low cost that could actually fill up the storage facilities for ammonia-based fertilizer in the Midwest." — Pete Johnson: Explaining why the Midwest is Coloma’s initial commercial focus. "We have to achieve commercial flow from wells. That's it." — Pete Johnson: Defining the company’s ultimate success metric beyond data gathering or scientific excitement.
Implications: Natural hydrogen could become a new domestic energy and industrial feedstock, but only if explorers find large, commercial reservoirs and pair them with real demand. The Midwest fertilizer market and global energy-security markets may be the first proving grounds.