Thank you for your question. It's a very intriguing one.
You're right, there are different hydrogen production streams. In Quebec, the most natural stream is hydroelectricity, which turns water into hydrogen and oxygen. This process is called electrolysis.
Hydrogen can also be produced by hydrocarbon fracturing. This is actually the most widely used method in the world. In fact, 95% of hydrogen is produced this way. It involves choosing a hydrocarbon, either natural gas or oil, and putting it into chemical reactors to extract the hydrogen and then obtain CO2.
What do they do with the CO2? If the CO2 gets released into the atmosphere, it's called grey hydrogen. If they try to capture and sequester it underground, it's called blue hydrogen.
The CFA Institute, a U.S. institute for economic and financial analysis research funded by the Rockefeller Foundation, recently released a fascinating report. It very clearly shows that, economically speaking, hydrogen is not profitable, especially with oil as heavy as the oil sands type. It's true, producing oil from oil sands requires a lot of energy. So it's how much energy you put in versus how much you take out. Once you produce the oil, you need to start another phase to separate the oil and extract hydrogen. The CO2 must also be sequestered. So you lose energy at every stage. These energy losses make for a very low energy return on investment, or EROI. At that point, you have to ask yourself if you really need to do it.
In addition, recent studies show that we currently have very little work being done to ensure that there are no long-term risks to sequestering CO2 underground. CO2 is not neutral. When moisture is present, it can bond with water vapour and form weak acid, that is, carbonic acid. In the long run, this acid can affect the caverns or spaces in which it will be sequestered, or the saline aquifers. We have absolutely no information on what will happen in the long run.
The energy return on investment would at least require a complete study of the process. That is currently not being done, and it's very unfortunate.