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HyTerra Plan -
Part 7 |
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Plan for powering data centers July 2026 Updates When I wrote Part 5 in
November 2025, I mentioned my idea of
encouraging data centers to locate along
the Nemaha Ridge and use HyTerra's
hydrogen to auto-generate their
requirements for electricity. I
said to put the data centers right on top
of the prime mover. I received some
odd comments about that suggestion.
Some said they didn't understand the
reason. Others said that it seemed I
was blue-skying. So I was pleased to see the
article "The AI Boom's Arctic Outpost" in
the June 22 issue of Time magazine.
It tells the story of a British data
center developer, Nscale, that is
constructing a data center in Norway right
next to a hydroelectric prime mover.
The Norway plant is not self-generating
since Norway's unique geography lent
itself to the development of hydroelectric
energy, and the region around the plant
has a spare gigawatt of unused
capacity. But Nscale is building
another plant in West Virginia alongside a
natural gas plant not connected to the
grid. This plant will
auto-generate. To me it seemed such
an obvious step that I wasn't surprised
that someone had seen it before.
Auto-generation from a nearby source of
fossil fuel is inherently more efficient
and less environmentally disruptive than
getting power off the grid. The article quotes Daniel
Shapiro, Nscale's Chief Power and Energy
Officer: "In North America, natural gas is
the only fuel that meets the scale, speed,
and reliability demands of AI
infrastructure today. Renewables
can't economically deliver 24/7
baseload." I agree with Mr. Shapiro
that his statement is true today.
It's up to HyTerra to prove that it will
not be true in the future. Somewhat
ironically, it will be HyTerra's 24/7
upload of energy to the grid that will
prove their ability to do the same for the
data centers. The Time Magazine
article is worthwhile reading for any
serious investor in HyTerra: I see the increasing
desperation of AI data center developers
as they encounter environmental objections
to their plants. In a recent podcast
interview, Kevin O'Leary, the Shark Tank
guy who has become a major data center
developer, answered questions about
community objections to the plants.
He responded calmly to most of them, but
after awhile was being pressed hard about
the noise, smells, and electrical
interruptions caused by the data
centers. He said rather plaintively,
"I really understand the concerns.
My training was as an environmental
engineer." And it's true. His
bachelor's degree was in Environmental
Studies. O'Leary seems to be someone
who would see the value of auto-generating
with a hydrogen and flare gas mix of
around 70-30. The turbines could be
located in a soundproof, climate
controlled room. The grid would
provide backup power in the event
connection to the natural hydrogen was
interrupted. The site could dispense
with the rows of diesel engine generators
currently used as backups for loss of grid
power, generators that must be started up
once a month even without grid
interruptions to make sure they are in
working order, but in doing so cause much
of the fumes and noise that communities
find objectionable. I am sorry not
to have a link for this podcast, but
didn't get it at the time and couldn't
find it later. The other recent
announcement that highlights the
desperation of data center developers is
Elon Musk's plan to put data centers into
space. I don't see how this would
work, but SpaceX's share price increased
after the announcement. Currently,
the object in space with the largest power
requirement is the US Space Station, which
has a huge solar array, part Russian but
mostly American. The array is much
larger than the payload where the
astronauts live and work and has a
generation limit of about 65
kw. Smaller data centers use
about 10 mw on a 24/7 basis, or roughly
153 times the capacity of the Space
Station's array. The newer
hyperscale data centers run 24/7 between
250 and 500 mw. Servers are heavy so Musk
will need larger rockets or smaller
payloads to get the data centers into
space. Perhaps he is counting on
TPU's to reduce both weight and
draw, and fusion reactors for power,
but these are still in early stages.
And while self-diagnosis and self-repair
have already been developed, the lack of
hands in space to handle even simple board
changes will require a greater redundancy
of parts. In time all of these
limitations except collisions with space
junk could be overcome, but the
terrestrial auto-generation model has many
advantages that will make it competitive
for decades. Plan 1. As noted before, the ability to generate electrical power from natural hydrogen 24/7 and upload it to the grid is the best proof of the necessary reliability, so the sooner HyTerra can generate revenues from selling power to the grid, the sooner the gates to AI data center revenues will open. 2. This
need to prove reliability does not
preclude some preliminary contacts to make
sure natural hydrogen is factored into
data center developers' planning.
Three important contacts would be Kevin O'
Leary, fellow Australian Josh Payne, CEO
of Nscale, and whoever is now fronting
Trump's Project Stargate. The data
center developers are not only desperate,
they are cash-rich and power-poor.
HyTerra is cash-poor and power-rich.
So maybe something can be worked out to
speed the process along. Natural gas
may be the prime mover of choice right
now, but as noted in Part 2, the cost of
natural gas will increase as shortages
develop around 2030. If political
leaders continue to play schoolyard bully
games in the Strait of Hormuz, natural gas
prices will increase even faster. All in all, I
like HyTerra's hand, but when dealing with
Project Stargate, please be sure to
present HyTerra as a fossil-fuels company,
not a renewables producer. You do
use the same methods to extract products
as fossil-fuels companies, and while I'm
not exactly sure which fossil produces
hydrogen, saying that you are a
direct-from-the-earth's-core company may
be a little too much for the Stargate
crowd to handle. Other
planning and investment issues At the very
beginning of this article, I said that
investing in HyTerra is speculative and
you shouldn't invest more than you can
afford to lose. The main reason for
this recommendation is the prepackaged
bankruptcy. It could be made to fit
HyTerra very easily. The rationale
would be that the company was incorporated
in 2005, has never generated any
substantial revenues, and the only way to
save it is to dump all the small
shareholders and start over. This
kind of thing can be done easily in the
US, particularly if a billionaire buys
HyTerra and wants to maximize profits. I don't see a
prepackaged bankruptcy happening while
Riley Kemp is CEO. He is respectful
of his shareholders and I don't know how
Australian law deals with prepackaged
bankruptcies. But some of HyTerra's
assets are held in a US subsidiary, so
there's a risk. A billionaire
can get the same results by gaining 50% of
the shares, taking the company private,
dropping all the current shareholders, and
then having a new IPO in a couple of
years. I've been on the wrong end of
both of these dodges, with TWTC and PACD,
losing substantial investments with
excellent promise. So I've learned
to keep my eyes open. The very news
that a billionaire is interested in buying
the company will generate an increase in
share price, and a small win is better
than a big loss. Here are some
other concerns that HyTerra needs to deal
with: Helium HyTerra needs
to look at the the cost of separating the
helium and transporting it to the
pipelines, but development money is in
short supply and should be devoted to
marketing natural hydrogen and other
combustible hydrocarbon gases as soon as
possible, as revenues are needed to
attract large numbers of investors. Ammonia In Part 2 I
wrote that if HyTerra's marketing
objectives were to sell hydrogen to Kansas
ammonia and fertilizer plants, they would
never make a ton of money. But as I
have researched this matter further, I've
become aware that ammonia and fertilizer
production is a huge market. Electrical
power generation should remain the #1
priority. Selling pure hydrogen to
Kansas ammonia and fertilizer plants
requires significant investment in
separation, purification and
transportation. The ultimate market
- farmers - might be better served by
competing with the ammonia producers
rather than purifying and delivering
hydrogen to them. That's a matter
than can wait to be decided until HyTerra
is generating revenues and has attracted
significant investment, but it should not
be discarded. Inert
gases My
recommendation for the upload centers
requires HyTerra to create some small
private pipeline networks to connect a set
of wells to a UPC. An issue that
should be explored is whether nitrogen and
carbon dioxide should be separated
out and discarded at the well.
If the entire output of the well is sent
to the UPC, a significant amount of
pipeline and storage space will be used up
by the inert gases. What are the
methods and costs of separating out the
inert gases? Will including inert
gases in the pipelines help protect
against the dreaded hydrogen
embrittlement? My assumption here is
that inert gases can be separated out by
the turbines. In other words,
anything that doesn't burn goes out as
exhaust. But the advantages and
disadvantages of separating out the inert
gases earlier in the process should be
considered. The same is true for the
pipeline system that delivers gases to the
data centers, but the answers here could
be different than for the upload centers. This
concludes the July 2026 updates. I
hope the ideas are useful to management
and encouraging for investors. One
of the useful takeways of the Time
magazine article is that things are
happening very fast in the AI and data
center markets. HyTerra has
tremendous opportunities, but it needs to
keep up. Last update: July 19, 2026 |