Vol. 25, No.49 Week of December 06, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

On the hydrogen highway

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Alberta and Saskatchewan eye future as hydrogen powers; Canada moves to net-zero

Gary Park

for Petroleum News

Alberta and Saskatchewan are quietly making strides towards capturing a slice of the anticipated multi-billion dollar a year global hydrogen market.

Of Canada’s combined gas output of 16.6 billion cubic feet per day - making it the fourth largest gas producer in the world - Alberta contributes 71% 11.8 bcf/d, while Saskatchewan adds a modest 2% or 332 million cubic feet per day, leaving British Columbia to cover the remaining 27% or 4.48 bcf/d.

As of now it’s the two Prairie provinces that are viewing hydrogen as a key plank in their natural gas strategies, joining Australia, China, Germany, Saudi Arabia, South Korea and the United Kingdom.

They are eager to exploit the potential of hydrogen, which produces water vapor rather than carbon dioxide when it combusts in combination with oxygen, to reduce their CO2 emissions.

If they can made headway on the commercial front, Alberta and Saskatchewan may eventually find a way out of their current reliance on oil, especially heavy crude, and respond to the prod they received earlier in November from newly announced Canadian government legislation that mandates net-zero carbon emissions by 2050 which will include rolling five year targets starting in 2025.

Alberta’s Industrial Heartland

In Alberta, an industrial corridor known as the Industrial Heartland north of Edmonton has the potential to become Canada’s first hydrogen production hub by taking a “leadership role in the transition to a net-zero hydrogen economy” said a report issued by University of Calgary researchers and the Transition Accelerator, a think-tank funded by several family foundations and governments.

The report, which estimates the domestic and international hydrogen markets have the potential to be worth C$100 billion a year or more, said the potential in Alberta is mirrored by five hydrogen facilities in the Edmonton region that produce hydrogen.

Transition Chief Executive Officer Dan Wicklum said a hydrogen-based energy system could enable countries around the world to set and meet net-zero carbon targets.

Alberta’s Associate Minister of Natural Gas Dale Nally said multiple projects in Western Canada could drive the growth of hydrogen, including two approved pipelines that are designed to connect natural gas fields with LNG export ventures that could be repurposed to export hydrogen.

He said the resulting jobs and royalties “could be a game changer for Albertans.”

The Alberta vision involves taking a portion of the province’s natural gas (made of CH4, four hydrogens and one carbon) and stripping out the one carbon, leaving an emissions free energy fuel.

The challenge then is to ensure the carbon element never enters the atmosphere to become an active greenhouse gas.

That can be achieved by sequestering the gas as CO2 in deep underground reservoirs or caverns or using the carbon as an input in another industrial process.

Saskatchewan leads in carbon capture

Saskatchewan is already a world leader in the commercial capture and storage of carbon, by extracting hydrogen from abandoned oil wells and by repurposing oil fields to produce close to zero-emissions fuel.

Proton Technologies Chief Executive Officer Grant Strem said that oil will always be needed as a chemical feedstock, but “as an energy product I think it will be priced out of the market in the five to 10 years.”

He said vast underground energy reserves have uniquely positioned Canada to become a global leader in clean energy production through his company’s carbon traction process.

Saskatchewan is also making an initial hydrogen move through a pilot project that could supply “10% of the world’s energy needs in the form of exported hydrogen by 2040,” Strem said.

Question on Proton technology

Taking a more cautious view, the Alberta-based think tank Pembina Institute said that although promising, the Proton technology has yet to be fully tested.

“To be validated as a zero-carbon technology, the (Proton method) would have to go through a full life-cycle assessment of environmental and social benefits and risk,” said Pembina senior fossil fuels analyst Benjamin Israel.

That injection of realism aside, Alberta is pinning its hopes of winning over skeptical investors through the use of low-carbon hydrogen and hydrogen-derived fuels along with International Energy Agency support for other technologies to reach net-zero emission goals such as electrification of heating and transport, bi-energy and carbon capture.

Positive hydrogen view

Even Alberta Premier Jason Kenney, who is tough to move off his long-held positions, has been more subtle in his views of hydrogen’s potential.

He told members of his governing United Conservative Party that Alberta must “find a way forward for our industry where we won’t stick our head in the ground and pretend that the aspirations behind (the Paris climate-change agreement) are not hugely influential in how capital is allocated and how market access decisions are made.”

The next national step will be the appointment of a 15-member panel to advise the federal government on the best ways to reach the net-zero goal in 2050.

Earlier this year the administration of Prime Minister Justin Trudeau set the ball rolling by calling on resource companies to provide “credible” net-zero plans as part of their applications to build new projects.

But it has yet to be established how committed Trudeau is achieving net-zero after decades of Canada failing to meet climate targets, including missing its 2012 target under the Kyoto Accord by more than 100 million metric tons and looking at an even greater deficit by the end of this year.

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