A global gold rush for buried hydrogen is gaining traction, says a Bill Gates-backed startup.

• A U.S.-based startup, Koloma, backed by billionaires Bill Gates and Jeff Bezos, aims to utilize the expertise of the fossil fuel industry to drive a global rush for buried hydrogen.
• Hydrogen gas that is found in its natural form beneath Earth's surface is referred to as geologic hydrogen, sometimes known as white or gold hydrogen.
• Recently, there has been a significant increase in the number of companies looking for geologic hydrogen deposits, leading Rystad Energy analysts to describe the search as a "gold rush."

A U.S.-based clean fuel startup, Koloma, backed by Bill Gates and Jeff Bezos, aims to utilize the expertise of the hydrocarbon industry to fuel a global rush for buried hydrogen.

Geologic hydrogen, a long-overlooked resource, has the potential to play a pivotal role in the shift away from fossil fuels as buzz continues to build over its clean energy capabilities.

Hydrogen gas that is found beneath Earth's surface and is sometimes referred to as white, gold or natural hydrogen is thought to be produced through high-temperature reactions between water and iron-rich minerals.

Pete Johnson, CEO and co-founder of Koloma, stated to CNBC that geologic hydrogen is primarily focused on exploration and production.

By utilizing the expertise and service providers that have traditionally served the oil, gas, and mining industries, we can quickly put them to work in discovering carbon-free resources. By leveraging and modifying what already exists, we can mature the industry faster.

Since its inception in Denver, Colorado, Koloma has raised over $305 million, the company disclosed to CNBC.

The startup has the support of U.S. venture capital firm Khosla Ventures, Climate Pledge Fund, and Breakthrough Energy Ventures, a climate and technology fund founded by Bill Gates in 2015.

The investors of Breakthrough Energy include Ray Dalio of Bridgewater Associates, Richard Branson of Virgin Group, and Jack Ma of Alibaba.

A potential 'gamechanger'

Recently, there has been a significant increase in the number of companies looking for geologic hydrogen deposits, leading Rystad Energy analysts to describe the search as a "gold rush."

The research note published in March by the consulting firm stated that the hype surrounding the previously neglected resource is due to the belief that it could significantly impact the energy transition.

The U.S., Canada, Australia, France, Spain, Colombia, South Korea, and others are currently conducting exploratory work on low-carbon energy sources.

Johnson from Koloma's industry stated that as the industry has gained momentum and attention, there has been a greater emphasis on the "intrinsic benefits" of geologic hydrogen as a primary energy source, rather than a secondary one.

An unaltered or converted natural energy source, such as coal, oil, wind, or solar, serves as a primary energy source.

Johnson stated that geologic hydrogen should have minimal carbon emissions, a small land footprint, and minimal water usage.

Johnson stated that the untapped geologic hydrogen resources in the U.S. could significantly contribute to the country's decarbonization efforts when asked about the outlook for the rapidly emerging industry.

Johnson stated that both Russia and Ukraine were significant exporters of hydrogen-derived ammonia, which is a crucial component of modern fertilizer products. Since their conflict began, the world has become more conscious of the importance of having a domestic ammonia supply.

By utilizing geologic hydrogen resources in the U.S., we can increase our domestic ammonia production and become a net exporter, all while reducing the carbon footprint of our products.

Challenges ahead

Although hydrogen has been touted as a promising energy source for the transition, the majority of it is currently produced using fossil fuels like coal and natural gas, resulting in substantial greenhouse gas emissions.

The potential of geologic hydrogen has been gaining momentum.

Geoffrey Ellis, a research geologist at the Energy Resources Program of the U.S. Geological Survey (USGS), stated that there could be a significant amount of naturally occurring hydrogen stored in underground reservoirs globally, according to CNBC's report from earlier this year.

Just a small percentage of geologic hydrogen recovery could meet all projected demand for 200 years, according to Ellis.

Not everyone's convinced about it's clean energy potential.

A blog post published on March 14 by the Hydrogen Science Coalition, a group of academics, scientists, and engineers, stated that geologic hydrogen discoveries currently provide the world with less daily energy than a single wind turbine.

The coalition claims that the extraction process of geologic hydrogen has environmental concerns, and transportation and distribution challenges make it unlikely to be found where it is most required.

Johnson of Koloma's said that, although there are still obstacles to overcome, the company's strong capitalization enables us to tackle these challenges thoughtfully and patiently.

Koloma is fortunate to have backing from investors with diverse interests, including those who are focused on the technology and data advantages, those who see the massive potential returns of large resource discovery, and others who are enthusiastic about taking positions around cost-advantaged low-carbon derivatives that can use geologic hydrogen.

"Like any exploration business and new technology, we face challenges in unlocking geologic hydrogen's potential," he stated.