KXL dead, hydrogen lives
 Click here to go to the full PDF version of this issue, with any maps, photos or other artwork that appears in
some of the articles.
TC, Alberta concede Keystone XL defeat; Alberta launches transition to hydrogen
Gary Park for Petroleum News
TC Energy’s Keystone XL project was officially interred on June 9, taking C$1.3 billion in Alberta taxpayers’ money with it when it terminated any hopes of achieving completion of the 1,200-mile crude bitumen pipeline.
The Alberta government confirmed what many viewed as inevitable when it announced a joint agreement with TC Energy to exit the project, although both parties held out some hopes of recouping their investments.
Energy Minister Sonya Savage said ending the relationship with TC Energy, which could also have resulted in the company drawing down up to C$6 billion in Alberta loan guarantees if construction of the U.S. leg had proceeded, was “in the best interest of Albertans under current conditions.”
She said her department continues to examine its legal options to secure compensation following President Joe Biden’s cancellation of a presidential permit which underpinned the regulatory approvals for KXL. TC Energy is also weighing its court prospects.
Alberta Premier Jason Kenney said his government’s attempt to recover its losses could end in a lawsuit under the North American free-trade agreement as early as July.
He said U.S. President Joe Biden gave no defensible reasons for scrapping KXL, nor did he offer the proponents a chance to make fresh submissions, which Kenney said violates the basic principles of administrative fairness and law.
Although NAFTA has been replaced with the United States-Mexico-Canada trade pact, its provisions allowing investors to sue any one of the three governments remain in place until mid-2023.
Kenney also pointed out that a lawsuit has been filed by 23 Republican-led states along the pipeline route, challenging Biden’s executive order on KXL.
He also said Alberta will continue to work with U.S. partners to find ways to meet American energy needs.
A Montana federal court judge said earlier in June that a KXL lawsuit launched by Indigenous and environmental groups - who are challenging presidential authority to issue cross-border permits for pipelines - can still proceed.
He said that although Biden revoked the 2019 permit issued by President Donald Trump, there is always the possibility that Trump or some other future president “can issue unilaterally another permit” for KXL.
SUBHED:
Blue hydrogen
The timing of the latest, most telling action to end the 13-year saga of KXL could not have happened at a worse time for the Alberta government, occurring on the same day that the Kenney government took bold steps to participate in energy transition to cleaner fuels.
In a rare show of solidarity with Prime Minister Justin Trudeau’s administration, Kenney unveiled a plan he said could turn Alberta into a hub for advancing Western Canada’s hydrogen sector and for lowering the province’s industrial greenhouse gas emissions.
The plan involves a C$1.3 billion facility to develop the first phase of a new complex that is scheduled to come on stream near Edmonton in 2024.
That blue hydrogen plant would capture and store 95% of its carbon emissions, reducing its carbon intensity to a level the company said would be “close to zero,” the proponents said.
Output would eventually provide enough liquid hydrogen to fuel every transit agency across Canada, they claimed.
“This is just a beginning … with projects like these Alberta would secure its future as a powerhouse in clean energy production,” Kenney said.
The joint provincial and federal plans to develop blue hydrogen production would utilize natural gas and carbon capture and storage - two key elements of Alberta’s strategy to lower the impact of its fossil fuel production. Green hydrogen, which is more strongly advocated by environmental groups, is produced from renewable sources and has no emissions.
Initial Alberta investment Alberta has committed to an initial investment of C$15 million. The Canadian government gave no information about possible tax incentives or investments it would offer.
Spearheading the project is U.S.-based Air Products, whose Chief Executive Officer Seifi Ghasemi said his company is working on three other projects in Canada but declined to be more specific about locations or operating details.
The Philadelphia-based company is already operating three hydrogen production facilities in Alberta and one in Ontario.
“I hope this will be the beginning of many, many more projects that we will do,” Ghasemi said, adding that to underscore the seriousness of the Air Products plans for Canada the company’s ventures stretch over 10, 20 and 30 years “so we can’t in the middle change our mind and move somewhere else.”
Ghasemi delivered a special bouquet to Alberta, saying “we are proud to expand our presence in this dynamic region, where we have found a vision for decarbonization that mirrors our core values.”
Oil Sands Pathways Net Zero On the same day, the six largest oil sands producers unveiled the Oil Sands Pathways Net Zero initiative to wipe out carbon emissions from their operations by 2050.
The alliance of Suncor Energy, Canadian Natural Resources, Cenovus Energy, Imperial Oil and MEG Energy said it envisages measures to achieve net-zero greenhouse gas emissions by 2050 and steps to lay pipelines from the oil sands centers of Fort McMurray and Cold Lake to a hub for capturing and storing their carbon output.
The companies said the Pathways initiative “will require significant investments by both industry and governments to advance the research and development of new and emerging technologies.”
The alliance partners represent about 90% of total oil sands output and generate about 68 million metric tons of emissions annually.
Their collective plan is to lower overall emissions by at least 31 million metric tons over the next nine years and another 25 million metric tons a decade later, with hopes of applying new technologies to reach its ultimate goal.
The alliance estimates it will cost about C$1.5 billion a year over 30 years to achieve its emissions reduction target.
The initiative follows a 2012 decision by most producers in the oil sands sector to establish the Canadian Oil Sands Innovation Alliance, which has since spent C$1.4 billion on environmental technology.
| 