A Strange Horse Race

Great advances in technology have often been pioneered by small startups simultaneously working on a problem.  Venture capitalists have become very rich on the theory that they can invest in several similar startups and even if 80 percent fail, the successful 20 percent will more than justify the amounts invested.  Small investors do not have that luxury, though.  They have to pick the right horse and often logic isn’t enough for the task.

I learned that lesson early on.  In 1973 I was very interested in what were then called microcomputers, taught myself binary and later 8080 assembly language, hung around a store that had Altairs and Imsais for sale in Westminster, CA where the computer nerds gathered, and bought one of the first TRS-80’s on the market.  The two-horse race that emerged was between Radio Shack and Apple.  At the beginning both had products that were similarly capable.  But Radio Shack had a nationwide chain of stores to handle sales and provide technical support, while Apple had barely emerged from the garage.   Logic favored Radio Shack and I bought their stock, losing out on a monumental gain.

For readers not in their seventies like me, a good current example of horses breaking from the gate at the same time is the race for usable energy from fusion reactions.  Waves of MIT physics grads fan out, lease the cheapest warehouse space they can find within 100 miles of Boston, set up their tokamaks, and begin work on finding the secrets of the universe.  If they succeed, we may not even need to worry about coal, petroleum, natural gas or hydrogen.  I’ve read their websites, can figure out enough to realize that each has a somewhat unique approach, but don’t know enough physics to make an educated guess about which horse is likely to win.  For investing, that’s a pass, even with Time magazine picking some winners.

The race to find usable power from white hydrogen, aka geologic or subsurface hydrogen, is a strange one.  The horses did not leave the gate at the same time.  I know of two publicly traded corporations: HyTerra on the Australian Securities Exchange since December 2005, and Quebec Innovative Materials Corporation, traded on the Canadian Securities Exchange since April 2021.  QIMC was formed in 2018 to mine silica, and began hydrogen drilling projects in Quebec in 2024 and Nova Scotia in 2025.  The other white hydrogen ventures are in the capital raising stage, with the BBC article noting that Bill Gates is backing Mantle8, while both Gates and Jeff Bezos are supporting Koloma.
 
HyTerra is way out in front of this horse race, as it is alone in having secured thousands of acres of leases along the Nemaha Ridge in Kansas.  It’s among the few that have drilled and evaluated test wells.  But it has been a poky pony, with no revenues generated after 20 years of operation.  Its share price is at failed enterprise levels.  Mining stocks take time to develop – see two of my other holdings, LAC and PPTA, for recent examples – but 20 years is ridiculous.

Still, white hydrogen has attracted a lot of attention recently.  The BBC article of July 25 is very good, and the article in Science Daily of May 13 about the Oxford-Durham-Toronto study is still the definitive evaluation of subsurface hydrogen’s potential.
 
The best prospect for the billionaires moving into white hydrogen may not be in paying for a gaggle of geologists to go looking for new deposits, but rather to buy a company that has done the geological work and locked down the Nemaha Ridge leases.  Isn’t it interesting that HyTerra, a company comprised of geologists and petroleum industry veterans based in a suburb of Perth on the west coast of Australia, with the world open for finding hydrogen deposits and a 20-year lead in the horse race, ends up in seven counties of Kansas, halfway around the world?

In the Science Daily article, study author Chris Ballentine of the University of Oxford says essentially that the hardest part of a successful operation is finding the stuff.  Of course, he follows that by saying that only he can find the right combination, so readers should invest in his Snowfox startup.

I think he’s right about finding the stuff being the hardest part.  Once you’ve found it, getting it out, purifying it, and delivering it to customers can all be done with existing technology.  All it takes is money, whether from Gates, Bezos, a billionaire to be named later, or thousands of small investors.