Hydrogen does not exist in usable form in nature. It must be extracted from chemical compounds — primarily water and natural gas — through processes that themselves require substantial energy input. This is what makes hydrogen an energy carrier rather than a primary energy source. You do not extract energy from hydrogen the way you extract it from coal or crude oil. You use energy to create hydrogen, store energy in its chemical bonds, and recover that energy later at the point of use. The net result is always a loss. The question is how large the loss is and what emissions it carries.
The GAO’s April 2026 technology assessment maps the major hydrogen production pathways in current and near-term use. Understanding the differences between them matters both for cost analysis and for any honest accounting of hydrogen’s environmental profile.
Natural Gas Reforming
Approximately 95 percent of hydrogen produced in the United States comes from natural gas. The two dominant methods are steam methane reforming and autothermal reforming. Steam methane reforming uses superheated steam in a heat-absorbing reaction to extract hydrogen from methane. Autothermal reforming burns methane in a low-oxygen environment in a heat-producing process. Both generate carbon dioxide as a byproduct. Both rely on existing natural gas pipeline infrastructure, which is the primary reason they dominate: the feedstock delivery system already exists at scale.
The cost advantage of natural gas reforming is significant. It produces hydrogen more cheaply than any current alternative. That advantage, however, comes with an emissions liability. Carbon dioxide produced during reforming is typically vented unless carbon capture, utilization, and storage systems are added downstream — an additional cost that narrows the economic gap between reforming and lower-carbon alternatives.
Methane Pyrolysis
Methane pyrolysis uses heat to thermally decompose methane in the absence of oxygen. The outputs are hydrogen and solid carbon — no carbon dioxide. This is the key differentiator. The absence of a carbon dioxide emission stream avoids the need for carbon capture infrastructure. Solid carbon, the coproduct, has commercial value: it is used in tire manufacturing and can be upgraded to graphene and other high-value carbon materials, which may offset production costs and make pyrolysis cost-competitive with reforming.
The technology is less mature than steam reforming but is advancing. The GAO report identifies it as a production pathway with meaningful near-term potential, particularly because its economics improve when solid carbon revenues are factored in and because it repurposes much of the oil and gas sector’s existing technical knowledge base.
Low-Temperature Electrolysis
Electrolysis splits water molecules to separate hydrogen from oxygen using electricity. Low-temperature electrolysis — the more commercially mature of the two electrolytic methods — uses established supply chains and known manufacturing processes. It produces no carbon dioxide at the point of production. Its emissions profile depends entirely on the electricity source: electrolysis powered by renewable energy is effectively zero-carbon; electrolysis powered by the average U.S. grid is not.
The cost disadvantage is significant. Electricity is more expensive than natural gas as an input, and electrolysis currently accounts for roughly 1 percent of U.S. hydrogen production. DOE’s Hydrogen Shot initiative targets a cost reduction to $1 per kilogram of low-carbon hydrogen by 2031, an 80 percent reduction from 2021 levels. Whether that target is achievable depends on continued reductions in renewable electricity costs and electrolyzer manufacturing costs — neither of which is guaranteed.
High-Temperature Electrolysis
High-temperature electrolysis splits superheated steam using solid ceramic barriers to filter hydrogen. It is less technologically mature than low-temperature electrolysis but achieves higher electrical efficiency and can recycle heat from industrial processes operating at high temperatures. This makes it particularly attractive for collocation with nuclear plants or industrial facilities with significant waste heat. The ceramic barriers in high-temperature electrolyzers depend on rare earth elements and critical minerals with constrained global supply chains — a materials risk that does not affect lower-temperature systems.
Geologic Hydrogen
The GAO report highlights geologic hydrogen as an emerging and potentially transformative production pathway. Hydrogen gas forms naturally underground through interactions between groundwater and iron-rich minerals, accumulating in certain geological formations. The U.S. Geological Survey is actively mapping U.S. regions likely to contain these resources. One study cited in the report estimates that two percent of global subsurface hydrogen resources could contain more energy than all proven natural gas reserves on Earth.
If geologic hydrogen can be extracted at commercial scale, it would represent a low-cost, low-carbon production source that bypasses the energy input costs associated with reforming or electrolysis. The technology is not yet proven at commercial scale, and detection and extraction of subsurface hydrogen deposits present significant technical challenges. But the USGS mapping effort and growing interest from the oil and gas sector — which has directly applicable technical expertise — suggest this pathway will receive increasing attention over the next decade.
The Efficiency Reality
Regardless of production method, hydrogen as an energy carrier involves unavoidable losses. The GAO report documents that electricity transmitted directly through the grid retains approximately 95 percent of its original energy content at the point of end use. Hydrogen produced by electrolysis, stored, and used in a fuel cell retains approximately 40 percent. That 55-percentage-point gap is the fundamental efficiency cost of using hydrogen as a storage medium rather than transmitting electricity directly. In applications where direct electricity transmission is feasible, hydrogen cannot compete on efficiency grounds. Its advantages emerge in applications where direct transmission is impractical: long-duration storage, heavy-duty transportation, aviation, or remote power generation.