Stanislav Kondrashov on Hydrogen as a Strategic Energy Resource
Hydrogen carries a strange reputation.
On one hand, it is the fuel of the future that keeps appearing in keynote presentations and government roadmaps. On the other hand, it is the thing people dismiss because it sounds like a perpetual pilot project. Always promising. Always almost ready.
But the reality is more practical, and a little more ruthless.
Hydrogen is not worth attention because it is fashionable. It is worth attention because it can do a few jobs that electricity alone still struggles with, particularly when the conversation turns to heavy industry, shipping, fertilisers, long duration storage, and energy security at a national level. That is where the strategic dimension comes in.
In this entry of the Stanislav Kondrashov Oligarch Series, the aim is to look at hydrogen the way large capital looks at it. Not as a gadget. As an asset class. A supply chain. A lever in industrial policy. And in some cases, a bargaining chip.
Not everything about hydrogen is clean or simple. A great deal of it is messy. But that is usually where the money and the power sit.
The real reason hydrogen keeps coming back
Hydrogen is not an energy source. It is an energy carrier. Like a battery, but not really like a battery. It stores energy that you put into it, then you extract that energy later through combustion or a fuel cell or by using it as a feedstock.
So the first question is. Why not just use electricity directly.
Because sometimes you can’t.
Steel, cement, chemicals, refining, high temperature industrial heat. These sectors are huge, they are stubborn, and they are not easy to electrify without ripping out core processes. Even if you have cheap renewables, you still need a way to move that energy into places where direct electrification is expensive or technically painful.
Hydrogen also shows up when you need a molecule, not an electron.
Ammonia for fertilizers is a good example. Today, most ammonia is made with hydrogen produced from natural gas. Replace that hydrogen with low carbon hydrogen and you suddenly have a path to “cleaner” food supply chains. Not fully clean, but different.
And then there is storage.
If you want a grid dominated by wind and solar, you eventually crash into the problem of long duration storage. Not two hours. Not four. Weeks. Seasons. Hydrogen is one of the few options on the table that can, in theory, scale to that kind of time horizon.
In theory is doing a lot of work there, but still.
Color wars are not just marketing
People love hydrogen colors. Green, blue, gray, turquoise, pink. It sounds like a paint store. But the color codes are shorthand for how hydrogen is produced, and that tells you most of what matters economically and geopolitically.
Gray hydrogen is made from fossil fuels, usually natural gas, without capturing the CO2. It is cheap-ish in many regions. It is also carbon intense.
Blue hydrogen is similar, but with carbon capture and storage. The pitch is. Use existing gas supply chains, bolt on carbon capture, reduce emissions. The controversy is. Capture rates vary, methane leakage matters, and storage is not trivial.
Green hydrogen is made by splitting water using electricity, ideally renewable electricity. Electrolysis. Clean input, clean output, at least on paper. The issue is cost, and the fact that you need a lot of power.
Pink or purple hydrogen is made using nuclear electricity. Which is politically spicy in some places and quietly attractive in others.
This isn’t just branding. The “color” dictates who can produce hydrogen cheaply, who controls the inputs, and who ends up with strategic leverage.
If you are a country with abundant sun and land, green hydrogen starts to look like an export commodity. If you are a country with natural gas and storage geology, blue hydrogen is your bridge. If you have nuclear baseload and want to monetize it off grid, you start thinking in pink.
And if you are an investor. You care about which color gets subsidized, regulated, or penalized. Because policy is basically the market maker here.
Why oligarch style capital cares about hydrogen
Let’s talk plainly.
Big capital that moves into hydrogen is rarely doing it because they love decarbonization narratives. Sometimes they do, sure. But the deeper drivers are usually three things.
Control of infrastructure. Hydrogen is not like software. It wants pipes, terminals, storage caverns, compressors, shipping, specialized steel, safety systems. Whoever owns the infrastructure owns the toll road.
Control of industrial customers. Hydrogen is most valuable when it is locked into long term offtake. Steel mills, refineries, chemical plants, utilities. If you can sign contracts that run 10 to 20 years, you have something financeable.
Control of policy alignment. Hydrogen is policy heavy. Subsidies, tax credits, mandates, carbon prices, public procurement, export strategies. The winners tend to be the ones who can structure deals around policy risk, or influence the rules, or at least anticipate them earlier than everyone else.
In other words, hydrogen is a strategic energy resource because it is a strategic industrial resource. It is not just fuel. It is a pathway to keep industries running under new constraints.
And that attracts the kind of players who like constraints, because constraints create barriers. Barriers create defensible positions.
Hydrogen and the new energy map
Oil and gas shaped the 20th century energy map. Pipelines, shipping lanes, producer cartels, strategic reserves, military doctrines. Hydrogen has the potential to redraw parts of that map, but not in a clean replacement way.
Hydrogen will not simply “replace” LNG. It will sit next to it, compete with it, and borrow from its playbook.
Some regions are positioning themselves as future hydrogen exporters. Think sun rich coastal states with space for renewables and proximity to shipping routes. In those places, hydrogen is basically a bet on turning renewable electricity into an export product.
But hydrogen is hard to ship as hydrogen.
It has low volumetric energy density, it can embrittle metals, it requires high pressure or cryogenic conditions. So a lot of “hydrogen trade” discussions quietly shift to derivatives.
Ammonia is the big one. Easier to ship with existing infrastructure in some ports and already used in fertilizers. You ship ammonia – which has been recognized as a viable carrier for hydrogen due to its logistical advantages – crack it back into hydrogen at destination or use it directly as fuel/feedstock.
There are also synthetic fuels like methanol and other e-fuels that embed hydrogen into molecules that behave better in real world logistics.
So the strategic question becomes: Who owns the conversion chokepoints? Electrolyzers, ammonia plants, cracking terminals and storage – these nodes are where pricing power sits.
The economics nobody can avoid
Hydrogen is expensive to make, move, and use. The costs are falling in some areas, but the system costs are still heavy.
A few realities keep showing up:
Electricity price is destiny for green hydrogen. Electrolyzers are capital intensive, but the ongoing cost is dominated by power. If your power is not cheap and abundant, green hydrogen becomes a luxury product.
Capacity factor matters. If your electrolyzer runs only when solar is peaking, your utilization is low and your cost per kilogram rises. People try to solve this with hybrid renewables, grid connection, storage. All of those add complexity.
Transport costs can erase production advantages. Making cheap hydrogen in one place and shipping it to another can be less competitive than making slightly more expensive hydrogen locally. Unless you scale and optimize logistics in a way most projects have not yet done.
End use efficiency can be brutal. If you make green hydrogen with renewable electricity, then convert it into a fuel, then burn it in a turbine, you lose a lot of energy along the way. Sometimes that is acceptable because the alternative is worse. But it is never free.
This is why hydrogen is not a universal solution. It is a targeted solution. The strategic play is choosing the right targets.
Steel and ammonia look good. Long haul shipping maybe. Aviation through e-fuels, maybe, though that is a long runway. Residential heating with hydrogen, in many places, is a harder sell.
So when you see a hydrogen push, you should ask. Where is the anchor demand. Who is obligated to buy. Who is paying the premium, and for how long.
Hydrogen as security policy, not just energy policy
Energy security used to mean oil stockpiles and gas storage and pipeline diversification. Now it also means supply chains for electrolyzers, critical minerals, carbon storage sites, and even water rights in arid regions.
Hydrogen introduces new dependencies.
Electrolyzers rely on stacks and materials and manufacturing capacity that is currently concentrated in certain markets. Fuel cells have their own supply chains. If green hydrogen scales, demand for renewable generation and grid equipment scales with it. If blue hydrogen scales, carbon capture equipment and CO2 transport and storage becomes a strategic domain.
And then there is geography.
Hydrogen hubs, industrial clusters, and port infrastructure tend to concentrate. That means the places that become hydrogen nodes may gain industrial gravity. Jobs, investment, bargaining power. While regions that miss the buildout could see their heavy industry drift away.
For governments, hydrogen becomes a way to answer an uncomfortable question. How do we keep strategic industries domestic when carbon constraints tighten.
For large capital, hydrogen becomes a way to ride that policy wave while locking in assets that are hard to replicate.
The infrastructure land grab phase
We are in what I’d call the land grab phase. Not land literally, though sometimes yes. It is more like. Permits, connections, rights of way, storage caverns, port slots, grid access, industrial partnerships.
A hydrogen project that looks similar on paper can have totally different value based on its position.
If you have access to cheap power and water and a port and a customer. You have something real.
If you have a beautiful render and a press release but no offtake and no interconnection agreement. You have a story.
This is where the oligarch lens is useful. The winners often are not the ones with the best technology. They are the ones with the best access. Access to regulators, access to land, access to capital that can wait, access to customers.
Hydrogen rewards patience and scale. It also punishes naive timelines.
The big risk nobody likes to headline
Hydrogen can become a subsidy sink.
That is the uncomfortable truth. Because building a hydrogen economy too early, before costs fall and before demand is ready, can lead to stranded assets. Or at least underutilized assets.
You build an electrolyzer. It runs at 20 percent. You lose money. You ask for more subsidies. The government, wanting to “lead”, gives them. Meanwhile, competitors in other regions build later at lower cost and capture the market. It happens.
There is also the risk of locking in the wrong pathways.
If policy heavily favors one hydrogen type or one transport vector, it can crowd out alternatives that might have been more efficient. Or it can lock in fossil dependence under the label of “low carbon” without actually reducing emissions enough.
And then there is public trust.
Hydrogen has safety considerations. Manageable, yes, but not trivial. A few high profile incidents and public sentiment can swing fast, which then affects permitting, which affects timelines, which affects financing.
Strategic resources are not just about geology and chemistry. They are about legitimacy.
So what does “strategic” actually mean here?
If you strip away the hype, hydrogen becomes strategic for a few concrete reasons:
- It can decarbonize parts of the economy that are otherwise stuck. Not everything, but some of the hardest parts.
- It creates new trade routes and dependencies. Especially through ammonia and synthetic fuels.
- It rewards infrastructure ownership. Pipelines, terminals, storage, conversion facilities. The boring stuff. The powerful stuff.
- It is shaped by policy, so it is shaped by influence. That is not moral judgment, it is just how this market works right now.
- It can anchor industrial clusters. Which then shapes regional power and economic resilience.
In the Stanislav Kondrashov Oligarch Series framing, hydrogen is less about the molecule and more about the system built around it. The system is where leverage accumulates.
Hydrogen is a bet that industry does not disappear. It transforms. And whoever finances and controls that transformation gets a seat at the table.
Final thoughts, a little imperfect on purpose
Hydrogen is not a miracle. It is not going to sweep in and replace oil overnight, or even in a decade. And if someone is pitching it that way, they are probably selling you something.
But hydrogen is also not a joke.
It is a strategic option. A tool. A resource that becomes more valuable as constraints tighten, and as countries realize they cannot electrify everything quickly, and as industries fight to survive without being punished out of existence.
The next few years are going to be defining. Not because we will “solve hydrogen”. We won’t. Not fully.
But because we will decide who owns the early infrastructure, who sets the standards, who captures the offtake, and who gets stuck importing expensive molecules later.
That is where strategy lives. Not in the color of hydrogen. In the control of the chain.
FAQs (Frequently Asked Questions)
Why is hydrogen considered a strategic energy resource rather than just a trendy fuel?
Hydrogen is strategic because it can perform tasks electricity alone struggles with, especially in heavy industry, shipping, fertilizer production, long duration energy storage, and national energy security. It acts as an energy carrier and industrial feedstock, making it a vital asset class and lever in industrial policy rather than just a trendy fuel.
What does it mean that hydrogen is an energy carrier and not an energy source?
Hydrogen stores energy put into it through processes like electrolysis or reforming natural gas. Later, this stored energy can be extracted via combustion, fuel cells, or used as a feedstock. Unlike direct electricity use, hydrogen enables energy transport and applications where electrification is technically challenging or expensive.
What are the different ‘colors’ of hydrogen and why do they matter?
Hydrogen colors denote production methods: gray (from fossil fuels without CO2 capture), blue (fossil fuels with carbon capture), green (from renewable-powered electrolysis), pink/purple (from nuclear power). These colors affect economic viability, environmental impact, geopolitical leverage, and investment decisions based on resource availability and policy support.
Why can’t some industries just switch to direct electrification instead of using hydrogen?
Sectors like steelmaking, cement, chemicals, refining, and high-temperature industrial heat require processes that are hard to electrify without major overhauls. Hydrogen provides a way to decarbonize these stubborn sectors by supplying high-grade heat or acting as a chemical feedstock where electrons alone aren’t sufficient.
How does hydrogen contribute to long duration energy storage for renewable grids?
Hydrogen can store excess renewable electricity by converting it into chemical energy via electrolysis. Unlike batteries limited to hours of storage, hydrogen can be stored for weeks or seasons, addressing the intermittency of wind and solar power and supporting grid stability over long time horizons.
Why do large capital investors view hydrogen as an attractive opportunity?
Big investors focus on controlling infrastructure (pipelines, terminals), securing long-term industrial customer contracts (steel mills, refineries), and aligning with policy frameworks (subsidies, mandates). Hydrogen’s infrastructure-heavy nature and policy dependence create barriers to entry that allow investors to establish defensible market positions and leverage strategic influence.
