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Alberta looks to diversify energy industry with geothermal, hydrogen
Gary Park for Petroleum News
The Alberta government has set its sights on the New Energy Age by promising geothermal regulations this fall and targeting global hydrogen exports by 2040 to resuscitate its natural gas industry.
Geothermal technology - which is well advanced in the United States, Indonesia, the Philippines, Turkey, New Zealand and Iceland - harnesses natural heat energy generated beneath the Earth’s crust, with heat pumps extracting steam or hot water to surface level.
Three types of geothermal power currently process the energy source - dry steam power, flash steam power stations and binary cycle power stations.
The constant and predictable availability of geothermal power, along with its relatively low cost and small carbon footprint make it an attractive power source as part of the green energy transition.
Energy Minister Sonya Savage said geothermal legislation will ensure Alberta has the regulatory and investment climate to make it competitive with other jurisdictions.
The government said geothermal presents a way to repurpose inactive oil and gas wells for heat and power production, aided by the fact that oil rigs are flexible enough to be used in geothermal drilling, boosted by Alberta’s geothermal-friendly geology.
But Savage emphasized that a geothermal policy does not mean oil and gas is fading fast, noting that energy forecasts have fossil fuels continuing to dominate the world energy mix for 30 years.
She said that developing Alberta’s full geothermal potential also “feeds into the narrative that Alberta is taking greenhouse emissions reduction seriously.”
Savage said a guiding set of regulations will offer investors a predictable regime instead of current approvals on a case-by-case basis.
Bailey Schwarz, a lead engineer at Alberta-based Eavor Technologies, said it is rewarding to see that drilling technologies “designed for the more traditional energy sector might find a home in a green and clean solution.”
Energy Futures, a partnership of government, industry and academia, has been working on advancing geothermal production in Western Canada for five years.
Juli Rohl, a geologist with Energy Futures, said the partnership is working on a project to understand how an Alberta First Nation can repurpose inactive gas wells to heat a greenhouse and help provide economic and food security for its community.
Hydrogen export more distant The export goals for hydrogen are more distant, but much grander than geothermal, although the initial steps are limited to building a string of 20 small-scale projects and investments of C$58 million.
Beyond that plan, the Alberta government hopes to reduce carbon emissions by 1 million metric tons a year, or the equivalent of removing 750,000 cars from the road.
“Unlocking innovation across our natural gas sector will create jobs while helping the industry become more efficient,” said Associate Minister of Natural Gas Dale Nally.
He said that by 2050 Alberta estimates hydrogen could be a US$3.5 trillion global industry, but the Hydrogen Council, a global corporate group, has lowered its sights to US$2.5 billion over the same period.
Alberta Premier Jason Kenney said Calgary-based utility Atco plans to build a pilot project that will convert natural gas and hydrogen into a source of home heating.
Within a decade, he said Alberta could have at least two large LNG projects exporting energy, be a continental leader for plastics recycling and host large-scale hydrogen production facilities, creating tens of thousands of jobs in the process
“A lot of this is just getting government out of the way, speeding up approvals and creating investor certainty,” he said. “Most of what we’re talking about actually won’t cost the taxpayers a dime.”
Atco Chief Executive Officer Nancy Southern said the immediate challenge involves scaling up commercial hydrogen production and delivering natural gas from carbon capture - a process she said is “still five to six years away.”
“We do have to crack the carbon capture nut on a commercial level. But we’re very, very close,” she said.
NDP also looking at hydrogen The New Democratic Party, soundly defeated by Kenney’s United Conservative Party in 2019, is exploring the feasibility of a hydrogen pipeline costing about C$350 million as part of a plan to grow the province’s participation in the energy source.
NDP leader Rachel Notley rolled out 11 proposals including government loan guarantees for pipeline infrastructure, production hubs and commercial applications, as well as royalty credits to attract large hydrogen projects.
That includes the creation of a task force to build a case for exporting hydrogen to markets in South Korea, Japan and California.
Notley said the NDP aims at taking advantage of a “generational economic shift” by producing what is known as blue hydrogen - using natural gas and existing carbon capture and storage facilities - to start exports in 2040.
She said the Kenney government’s plan is too vague and fails to offer any industry incentives, unlike Australia and Germany.
A spokesman welcomed “ideas from others,” but said it was hard not to note that Notley, while she was premier from 2015 to 2019, “did nothing” on the development of hydrogen.
- GARY PARK
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