For investors: how close are scientists to creating alternatives to oil?

Investment news, USA. American scientists have recently announced to the world a sensational piece of news, which was at once picked up by leading news agencies: an effective and, more importantly, cheap way of generating hydrogen from water has been developed. Fuel received as a result of experiments may well be used for everyday energy needs.

The main point of the breakthrough, made by a group of specialists under the guidance of a professor of Massachusetts Institute of Technology (MIT) Daniel Nocera, is that being exposed to sun rays, immersed into water and covered with a special cobalt and phosphates solution artificial silicone “sheet” favours generating hydrogen from water. Hydrogen is the source of energy as such:
• conducted research. Experiments on breaking water molecules have been conducted earlier, but they were very labour-consuming and costly, plus absolutely pure water was required for this. At the same time Nocera claims that he can “make” hydrogen quickly, cheaply, and from any quality water. In other words, invented by his team installation can operate at any private household.
• trialsample. However, scientists, as they personally admit, still need to update their device for some time in order to make it more compact (at least to make it of the size of a refrigerator) and improve the mechanism of waste gases disposal.
• prototype. Till 2012 at latest, inventors promise to create the prototype of a device, which will be able to provide a private house with a daily volume of power by means of 1.5 water bottles of any quality.
• investmentsindevelopment. Headed by Daniel Nocera, company SunCatalytix has already received 4 million dollars as a part of financing from ARPA-E (Advanced Research Projects Agency-Energy) of US Department of Energy. It has also found a very beneficial contract with Indian industrial consortium Tata Group.

For investors: is there any progress in research?

If to trust reports of the scientists, as analytics of US and Canada Community of Forex Academy and Masterforex-V stock exchange trade admit, there certainly is progress. One year ago, in May 2010, the research group of professor Nocera announced more moderate success:
1. Results of scientists’ experiments. In the article published in American magazine “Proceedings of the National Academy of Sciences” inventors reported the results of experiments.
2. Striking breakthroughs. First of all, they managed to find water catalyst on the basis of molybdenum. It is a cheaper metal than platinum, which was earlier used for similar purposes. However, scientists claimed to continue looking for a new, more cost-effective material for water transformation into hydrogen. The reaction of water decomposition with emission of oxygen and pure hydrogen could only be achieved by electricity.
3. Scientists’ needs. One year ago, for improvement of their device, the group of professor Nocera needed:
- to increase power of similar catalysts;
- to make them work on ordinary water without applying additional chemical components as electrolytes;
- to combine them in one device with solar elements.
Judging from today’s reports, all this was achieved.

Hydrogen as fuel

The idea of using extracted from water hydrogen as fuel appeared quite long ago. It was then considered fantastic and not taken seriously. “One day water will be used as fuel; hydrogen and oxygen, which it is composed of, will be used together and separately and will serve as  inexhaustible source of light and heat,” wrote in 1874 Jules Verne in his “Mysterious Island”:
• utopian idea. Some time passed, and this idea was no longer perceived as utopian. In 20^th century scientists knew how to gain hydrogen from water, but this procedure was extremely expensive and demanded industrial  capacity;
• production cost of generating hydrogen. Many ways of generating hydrogen are known to science, but all of them were expensive, energy-consuming, inefficient, and the gained product had extremely high production cost. Plus, there always existed problems of ecological character, as the devastating influence of gases liberated in the process of hydrogen formation on ozone field of the Earth could not be stopped.
• expensive production. Producing hydrogen fuel for cars is currently four times more expensive than producing petrol. However, despite this, everybody understands that hydrogen remains the most perspective fuel amid limited reserves of traditional sources of energy (coal, oil, and gas).
• research. Due to existing expensiveness, many countries actively conduct research in the sphere of hydrogen energy. During last three decades governmental and private organizations in the USA have spent more than 15 billion dollars on research in this sphere. Japan has a special program, scheduled till 2020, which received the funding of 4 billion dollars. The EU is going to spend 5 billion dollars for such purposes;
• investments in research. Some corporations devote incredible sums of money for conducting research in this sphere. In this reference such industrial giants are to be mentioned: Shell, Siemens, Ford, General Electric, General Motors, Toyota, Honda Motor, Mazda, DaimlerChrysler, BMW, British Petroleum, Hydro Electrolysers, and Airbus.
• developments. Projects on creating automobile transport running on hydrogen fuel and, consequently, hydrogen stations are being developed. Almost every large corporation in the world automobile industry already has a developed model of car running on hydrogen fuel. The only thing, which restrains them from mass production, is hydrogen expensiveness.

Investments in hydrogen energy

1. European Union. At Belgian university Ghent scientists are working out the possibility of generating power from industrial waste by using hydrogen oxidation reaction.
2. China. A device is created, which allows generating hydrogen from acetates – salts of acetic acid.
3. USA. Scientists of University of Pennsylvania have found microbic elements, which can generate hydrogen from biomass 4 times more rapidly than during ordinary fermentation. American Brookhaven National Laboratory conducts experiments on generating hydrogen from glucose with the help of bacteria.
Scientific experiments with hydrogen are actively conducted in Russia, Canada, Japan, and the countries of Western Europe.

What is the importance of alternative fuel?

As professor Nocera said, his device will be able to help 3 billion people, who are in the need of energy, to satisfy their needs. This first of all concerns citizens of so-called developed countries, whose energy consumption amounts to the majority spent on the planet:
• oil problem. USA currently is the world’s largest oil consumer, and at the same time its largest importer. At the same time, 43% of oil products are used as fuel for cars;
• unpromising forecasts. American Petroleum Institute forecasts that 95% of “black gold” sources available in the world will be exhausted within next 56 years, remaining 5% will be exhausted in about 88 years. Therefore, mankind has about 30 years to find alternative sources of energy.
• hydrogen as a solutionof the world’s energy problem. Hydrogen is suggested as ideal fuel: it is widely used, rather easy to generate, store, and transport. Hydrogen is able to emit three times more energy than the same number of petrol, being at the same time equally explosive.

If the experiment with creating cheap hydrogen is successful, this may mean the start of new technological era. However, focusing on the new type of fuel, according to experts’ assessment, will not happen at once. Initially, fully hydrogen cars will be characterized by rather high production cost. For a long time so-called “hybrid” transport will prevail at the market. In other words, this is the transport, which combines traditional petrol and electric engines.

What oil prices to expect in the nearest future? Analytics of the Chair of In-depth Study of TradeSystem of Masterforex-V admit that on Friday oil prices dropped after Central bank of South Korea made a decision on increasing the base rate by 0.25%, up to 3.25%. Participants of bids fear slowing down economic growth amid tightening monetary politics and, consequently, reduction of “black gold” demand, as shown by the bids’ data. Prices of transactions with oil futures amounted to:
- Light Sweet (WTI) - $99.33 (-$1.47)
- Brent - $118.30 (-$1.27).
Moreover, fears have escalated at the markets concerning the fact that Central Bank of PRC can also raise its rates in order to resist the increasing growth of consumer prices, which, according to analytics, could prove to be the highest in May since July 2008 – 5.5% on an annual basis.
In its turn, on Thursday ECB, keeping the base rate at the level of 1.25%, raised its forecast on inflation in Euro zone for the current year to 2.5-2.7% and lowered for the next to 1.1-2.3%.

From hearsay, Saudi Arabia has increased its oil supply to oil refinery in Asia and plans to increase oil recovery in July up to 10 billion barrels daily. “this means that OPEC no longer limits oil recovery, and Saudi Arabia suggests more oil to the clients in Asia. This is to put prices under pressure,” admitted analytics of Masterforex-V.

The current price of the barrel of oil is traded flatly within Daily level, by leaving which the following course of events will be shown: either breaking local maximum level and continuing the long-term bullish trend in the form of strong с(С) wave; or forming bearish correctional FZR of Daily level, where MF sloping channel will serve as a support level into the area of 91.12.

 

 

The Editorial Board of “Market Leader” magazine, jointly with experts of Masterforex-V Academy, holds a questionnaire in the traders’ forum: in your opinion, can artificial hydrogen in the nearest future as fuel become a total substitute of oil?
• yes, research is conducted very rapidly, and it will inevitably soon lead to positive result;
• yes, but not soon;
• no, generating it in the required amount is yet to be studied for a long time;
• no, oil monopolies will not allow this to happen;
• no, all this story with hydrogen is a mere fraud.

 

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