Hydrogen is now being drilled like oil: why companies are seeking 'white' fuel underground
Hydrogen is usually produced at plants — from natural gas or water. But a new energy sector follows entirely different logic: companies are searching for gas that has already been formed naturally inside the Earth. To do this, they conduct geophysical exploration and drill wells almost exactly as they would for oil and natural gas.
In August, drilling of another well, Lawson 3, began in the Canadian province of Saskatchewan. Its mission is to help understand the size and structure of an underground accumulation of naturally occurring hydrogen discovered earlier. MAX Power is not building a hydrogen plant there yet and has not announced commercial production; it is trying to determine whether the natural reservoir can supply enough gas for a commercial project.
This difference — between finding hydrogen and proving it can be produced profitably — is currently defining the entire new industry.
What is white hydrogen
Natural, or geological, hydrogen is molecular hydrogen H₂ that naturally forms and accumulates underground. It is also called white hydrogen, and sometimes golden hydrogen. There is no unified official "color" system for hydrogen.
The main difference from conventional fuel production methods is that this hydrogen does not need to be produced first.
So-called gray hydrogen is currently produced mainly from natural gas, generating carbon dioxide. Green hydrogen is produced by water electrolysis using renewable electricity — this option can have a significantly lower carbon footprint but requires large amounts of electricity and expensive equipment.
If producible hydrogen already exists in a geological reservoir, the concept becomes theoretically closer to the gas industry: find a deposit, drill a well, bring the gas to the surface, purify it, and deliver it to the consumer.
Where subterranean hydrogen comes from in the first place
Scientists know of several natural processes capable of continuously or periodically generating H₂.
One of the most studied involves reactions of water with iron-rich rocks. Under certain geological conditions, iron oxidizes, releasing hydrogen from water molecules. This process is of particular interest to geologists studying so-called ultramafic rocks.
Another mechanism is radiolysis: natural radioactive decay in the Earth's crust can split water molecules, forming hydrogen.
However, gas formation alone is not enough. For a deposit to form, hydrogen must migrate through rocks, enter a suitable reservoir, and not escape to the surface. Therefore, researchers look simultaneously for a gas source, migration pathways, porous reservoir rocks, and geological structures capable of trapping hydrogen.
Why it wasn't found earlier
At first glance, it seems odd that the oil and gas industry has drilled millions of wells, yet talk of large natural hydrogen reserves began only recently.
The U.S. Geological Survey (USGS) explains this quite simply: oil explorers in most cases were looking in the wrong places and for the wrong things.
Geological conditions favorable for hydrogen formation do not necessarily coincide with areas of oil and gas fields. Moreover, during conventional drilling, hydrogen was long not a target gas, so it might not have been measured with appropriate instruments.
The situation began to change after hydrogen was discovered in diverse geological settings — from Mali and Albania to North America and Australia. According to USGS, by the end of 2023 more than 40 companies were searching for geologic hydrogen — roughly four times more than in 2020.
Canada is now testing whether a discovery can become a deposit
One of the most prominent experiments is underway in Saskatchewan.
In late 2025, MAX Power drilled the Lawson well specifically to search for natural hydrogen. Subsequent tests confirmed free gas flow to the surface. In certain core samples, hydrogen concentration reached 28.6%, and in tests through casing, laboratories obtained values ranging from about 16.8% to 19.1%.
In July 2026, the company began drilling additional wells to understand how extensive the system is. On August 5, Lawson 3 started, located about 1.2 km from the first well.
The current goal is far more mundane than loud talk about a "new energy source": geologists need to determine the reservoir size, gas concentration, pressure, flow sustainability, and how the well will behave under long-term production.
Only after flow rate, pressure, and reservoir characteristic tests will it become clear whether the discovery can move from geological finding to commercial production.
In Kansas, one check has already shown how large the risk is
A telling example came from the United States in August.
HyTerra is also searching for natural hydrogen and helium in Kansas. This summer, it conducted a 14-day production test of the McCoy-1 well to check whether the discovered reservoir could sustain a stable gas flow.
The result was far less impressive than the initial geological indications. Gas flow amounted to about 0.1 million standard cubic feet per day, and preliminary analysis showed low gas saturation of the tested interval. The company decided not to test the second planned zone for now and to review its future program.
This is an important detail for the whole story of white hydrogen: the presence of H₂ in rocks does not make a well economically viable.
One natural source has been supplying energy for over a decade
The most famous operating example of natural hydrogen is near the village of Bourakébougou in Mali.
Gas there was accidentally discovered back in 1987 while drilling a water well. It later turned out that the reservoir contained high-concentration hydrogen. Since 2012, the gas has been used to generate electricity for the community.
Studies of this deposit revealed an unusual feature: over years of operation, pressure has not declined as would be expected from an ordinary gas reservoir. Scientists suggest that the system is gradually replenished with new hydrogen.
However, this result cannot be transferred to other deposits. In a 2026 study, scientists showed that in some rock types, natural hydrogen generation occurs quite slowly, and accumulation of large volumes can take thousands or even tens of thousands of years.
Moreover, Bourakébougou remains a relatively small project. It proves that natural hydrogen can be obtained from a well and used for energy, but it does not prove the existence of a huge global industry capable of quickly replacing natural gas.
Why the rush for white hydrogen has begun anyway
The potential economics looks enticing. With a successful deposit, a company would not need to consume natural gas as a feedstock or use huge amounts of electricity for water electrolysis.
Main costs shift toward exploration, drilling, gas purification, compression, and transportation.
A techno-economic study published in 2026 based on favorable conditions of the Mali deposit showed that, when scaled up, natural hydrogen could theoretically approach a very low production cost. But the authors simultaneously emphasize the dependence of results on well flow rates, depth, gas concentration, and especially delivery costs.
That is why potentially cheap underground hydrogen can turn out to be expensive if a deposit yields little gas or is located far from consumers.
Today, global hydrogen demand already exceeds 100 million tons per year. Almost all of this volume is used not by vehicles but by industry — primarily oil refining and production of ammonia and other chemicals.
If geological hydrogen can be produced cheaply and with low emissions, the most obvious first buyers could be companies that already consume H₂ and would not need to create a market from scratch.
In the longer term, hydrogen is being considered for steelmaking, synthetic fuels, certain types of heavy transport, and energy storage.
How large the reserves are — still the main question
Estimates look impressive. USGS modeling suggests that the Earth's crust could potentially contain millions of millions of tons of natural hydrogen.
But this figure does not imply the existence of an equal volume of recoverable reserves. Much of the gas may be too deep, far offshore, in accumulations that are too small, or in rocks from which it cannot be economically extracted.
Therefore, white hydrogen is currently roughly where many new resource industries stand before the first major deposits appear: geologists already know the resource exists, but they do not yet know how often nature accumulates it into reserves worth developing.
Drilling in Canada, the United States, and other countries should answer precisely that question. If even some projects confirm sustained industrial flow, hydrogen could for the first time become not only a fuel that humans produce, but also a natural energy resource that is sought underground.
