Barron's Recs $APD for Hydrogen

1) $APD is an Oligopoly play in the hydrogen economy. Barron’s recommends buying shares this weekend (and charts to follow in this short thread.)

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Yes, most definitely, I will be playing $HYDR big time on any break/close above $19.75 horizontal.

That article helped seals this trade for next week if I get the breakout.…

About a quarter of Air Products’ sales come from hydrogen and a hydrogen-carbon monoxide mix, says J.P. Morgan, but hydrogen’s importance to the company’s top and bottom lines is likely to grow.

Air Products is spending nearly $10 billion on three projects that will use low-carbon methods to produce hydrogen. Dayen projects that it will make $3.50 a share from the element in 2026, when its two largest projects are expected to make their debuts. That will represent about half the company’s expected earnings growth between this year and then.

Hydrogen is a critical element in reducing carbon emissions because it solves a problem that solar panels and wind turbines don’t. It’s combustible, so it can power engines and replace the fossil-fuel gas used for heat in manufacturing. It can also be transported through pipelines and across oceans. In February, the first-ever international shipment of liquefied hydrogen traveled from Australia to Japan. Daryl Wilson, executive director of the Hydrogen Council, likened it to the first shipment of U.S. oil to Europe in 1869.

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There are two methods for making hydrogen that are more environmentally friendly, and these will be the main growth drivers for the industry. One is to build a process for capturing and storing carbon directly into the hydrogen-production process, creating what is known as blue hydrogen. If done correctly, less than 5% of carbon dioxide should escape. Air Products is building two facilities in Louisiana and Alberta, Canada, to make blue hydrogen.

Green hydrogen, made by separating the carbon and oxygen molecules in water, is even more environmentally friendly as long as it is powered by renewable electricity. Through a joint venture, Air Products is building a green hydrogen plant in Saudi Arabia that is expected to open in 2026.

Hydrogen was always expected to be part of the clean-energy future, but the timeline has generally been measured in decades. The clock is ticking a lot faster now, and Air Products will be a key beneficiary.

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Blue hydrogen can be made from coal but by far most comes from natural gas. Carbon dioxide is produced and must be collected and stored.

Scrubbers that collect carbon dioxide exist but releasing the carbon dioxide for use requires energy.

Most scrubbed carbon dioxide is injected into oil wells to increase production. You wonder how much escapes from those oil wells with the oil.

Hydrogen is a clean fuel but not an energy source. When made from dirty energy, the long tailpipe argument applies.

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Paul, I hope you are having a good weekend. I enjoy your commentary on the Pandemic and PA boards. That compliment out of the way, I agree with what you say here to a point.

MIT Technology Report from last year talks about blue and green hydrogen as “old school” methods of producing hydrogen. Within the next ten years, I expect giant breakthroughs in two energies:

Hydrogen production that is clean and reproducible anywhere


Nuclear Fusion we can harness for energy use.

Even Elon Musk announced a week ago that Tesla is now working on an EV/H2 hybrid semi-truck.

Quantum computing and A/I predictive power are forging new thinking, testing, and use of existing technologies amped up by the ability of supercomputing to speed up technological shifts.

Of the three books I am reading right now, the one standout is by Mo Gawdat and titled “Scary Smart.” Mo is the former Chief Business Officer for Google (X), and the byline for “Scary Smart” is “The Future of Artificial Intelligence and How You Can Save Our World.”

Mo’s premise is that humans must pay attention to what input we give as data to A/I at this watershed moment (he completed this book in late 2021.)

We must focus on solving the common global problems and cast a mean eye on shutting down errant A/I, which develops itself to terrorize humanity.

I’ll not belabor here some of his examples of errant A/I, which Microsoft, Google, etc., already shut down last year. But I am surprised he did not talk early on in this book about the problems of Tesla’s so-called FSD, which compounds mistakes more than solutions.

I wonder if Mo has seen the recent videos from March 2022 on Twitter, showing Tesla test cars in California running up and down roads with all kinds of radar and lidar instruments attached to the vehicles?

Collecting data using technologies Musk has dissed hard in the past certainly is a duplcitous way to feed Musk’s FSD skunkworks better data to make FSD safer. (I’m only a 1/4 of the way through this book, and this weekend I decided to start from Chapter 1 again and start writing notes. It’s also possible Gawdat takes on Musk’s FSD in the 3/4 I have not read.)

I was starting to warm up to Musk for his help sent to Ukraine. However, seeing how Musk is developing FSD with “lie-dar” (what Musk calls lidar in public) for data gathering on test cars, I want to scream in this hypocrite’s face. (There is no way I’d ever get inside a Tesla Robo-Taxi - not that there is even one in existence.) musk is setting back autonomous driving by a decade with every FSD wreck we see on Twitter, which only uses onboard cameras with Tesla’s processing.

I moved off-topic here. Getting back to hydrogen: I am watching the South Koreans and the Japanese. But especially the South Koreans. What Hyundai is doing behind the scenes on the H2 front will blow minds in the next three years. I visit Hyundai PR about once every quarter to see how far they’ve advanced H2 cars and infrastructure with the South Korean government. I believe California will observe South Korea and become the most prominent US booster of this nascent industry. Hydrogen fuels, for too long, have been a playground for fraudsters in North America. I like the South Korean approach of using a Manhattan Project approach to get the technology off the ground.

The solution for “clean” H2 production is at our fingertips. Lawrence Livermore Labs, DARPA, MIT, Stanford, University of Arkansas, and other physics labs and R&D incubators are on the hunt to solve this problem, and I hope we’ll get there by 2030. I certainly think H2 breakthroughs will appear no later than 2040. But I hope for a solution in the next eight years.

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Anybody foolish enough to pay $12,000 for this hot mess software is going to be waiting for a looooooooong time for their Tesla to turn into a working robotaxi which prints money.

Forgot the link:

I certainly think H2 breakthroughs will appear no later than 2040. But I hope for a solution in the next eight years.

I hope you are correct, but the bottom line is consumers have to be willing to pay more if they want to meet these objectives. At least until the new technologies develop.

A friend in engineering keeps saying clean hydrogen will be expensive compared to natural gas. I saw a recent report saying double.

If electricity becomes dirt cheap much is possible. As to nuclear, I think opponents will make it very expensive (which they did after Three Mile Island). As to fusion, they have been promising 30 more years since the H bomb. What 1953? The estimates are always until current staff has retired.

We keep hearing that electrolysis hydrogen will get cheaper as the equipment gets improved and mass produced. Same argument for wind and solar. Did that happen? Depends on who you ask. Seems like tariffs on materials from China were a negative.

You can have clean air if you are willing to pay for it. Get out your checkbook. It won’t be cheap. It won’t be free.