A Hydrogen powered future

By Bruce Lantz

Will hydrogen be the next big thing in the search for emissions control in the battle against climate change? Or will it be just another missed opportunity?

With world leaders fresh from the COP 26 United Nations Climate Summit in Glasgow, Scotland in early November talking about the need to fight climate change with reduced carbon emissions worldwide, opportunities exist for new methodologies to take a place among traditional fuel sources such as oil and natural gas. Among those candidates is hydrogen.

And both Canada and the United States are looking at ways to capitalize on it, even though right now there are only two facilities in the world producing hydrogen at commercial scale.

Some see hydrogen gas as the clean fuel of the future – generated from water and returning to water when it is oxidized. Hydrogen-powered fuel cells are increasingly being seen as “pollution-free” sources of energy and are now being used in some buses and cars.

Hydrogen is found in water, oil and natural gas, with 95% of it currently produced from fossil fuels. The current goal is to develop clean production from water electrolysis using renewable energies – “green” hydrogen. It offers exceptional energy density – 4.1 times more than coal, 2.8 times more than gasoline, and 2.4 times more than natural gas – and is the best ally of renewable energies as it can energy in the long term for use later. Of great significance in the climate change battle, it emits neither greenhouse gases nor pollutants when it comes from renewable resources. And, used in electromobility, it has the advantage of being very quiet and filling up with hydrogen takes only a few minutes compared to several hours for its battery equivalent.

But much will depend on what type of hydrogen government is willing to support. Hydrogen produced from natural gas using a thermal process is described as “grey” and offers little climate benefit. When carbon capture and sequestration technology is used, the hydrogen is considered to be “blue” as emissions are reduced, while “green” hydrogen made from water using electrolysis powered by renewable energy offers the greatest climate benefit.

“Not all hydrogen is created equally and hydrogen is only as clean as the sources used to generate it,” said Environmental Defence spokeswoman Julia Levin. “So what we’re seeing is natural gas and oil companies looking to fossil fuel-derived hydrogen in a desperate attempt to find new markets for their products.”

But much will depend on the willingness of government to support hydrogen projects, such as that planned by two oil patch leaders for a hydrogen facility in Alberta. Suncor Energy Inc. (TSX:SU) and ATCO Ltd. (TSX:ACO.X) announced last spring that they are partnering on on a facility near Edmonton, AB that could produce more than 300,000 tonnes of hydrogen per year. Most of the hydrogen would be used at Suncor’s Edmonton refinery and in ATCO’s natural gas system, reducing CO2 emissions in Alberta by more than two million tonnes a year, equivalent to taking 450,000 cars off the road. A final investment decision is expected in 2024 and the facility could be operational by 2028.

“Not all hydrogen is created equally and hydrogen is only as clean as the sources used to generate it,” said Environmental Defence spokeswoman Julia Levin. “So what we’re seeing is natural gas and oil companies looking to fossil fuel-derived hydrogen in a desperate attempt to find new markets for their products.”

The ATCO-Suncor facility would produce blue hydrogen, although the companies call it “clean” because 90% of emissions would be captured.

Despite a cost expected to reach into the billions of dollars, the companies say they aren’t seeking direct government funding but, rather, regulatory and fiscal policy measures from both the federal and provincial governments to ensure it can be profitable. Those measures would include the availability of carbon sequestration rights, emissions reduction compliance credits, regulations allowing the blending of hydrogen into natural gas, and investment tax credits for carbon capture utilization and storage.

“We’re hoping that this will accelerate the consultation between the province, federal government and industry,” ATCO CEO Nancy Southern told CBC.

The oilsands are responsible for about 11% of Canada’s total emissions, and other oil and gas production makes up another 11 per cent.

With Alberta acknowledged as the largest hydrogen producer in Canada, the technology, expertise and resources already exist there for it to become a global supplier of clean, low-cost hydrogen, used for heating, electricity generation and energy storage, transportation fuel, in industry including heavy oil upgrading and oil refining, and for export markets.

“With a worldwide market estimated to be worth over C$2.5 trillion a year by 2050, hydrogen can be the next great energy export that fuels jobs, investment and economic opportunity across the province,” the Alberta government said in a news release explaining its ‘Hydrogen Roadmap’ project seen as part of the province’s recovery plan.

“As Canada’s largest hydrogen producer we have a number of production methods available to help meet demand within Alberta and around the world. Our natural gas reserves, when combined with carbon capture, utilization and storage, provide a way to quickly scale hydrogen production. We also have the capability to produce hydrogen using renewable electricity or emerging technologies like natural gas decomposition (and) reduce our carbon emissions by integrating clean hydrogen across our economy.”

Public-private partnerships and government-to-government relationships, including with Indigenous governments, are essential to advance the hydrogen economy, signal investors and raise public awareness and understanding, the release said.

The Alberta government has already committed to spend $131 million on carbon capture projects to help cut emissions. Premier Jason Kenney announced earlier in November that seven projects will receive up to $100 million, while another $31 million is earmarked for other carbon capture utilization and storage (CCUS) projects by the end of this year.

The seven identified so far are Advantage Energy’s Glacier Gas Plant Carbon Capture and Storage and Waste Heat Recovery in Hythe; Ember Resources’ Ember Engine Emissions Reduction Program at multiple sites in east and central Alberta; Imperial Oil’s Kearl ConDex Full Scale Oil Sands Mine installations in Fort McMurray; NuVista Energy’s Wembley Cogeneration and Waste Heat Recovery Project in Wembley; Strathcona Resources’ Lindbergh T70 Cogeneration Expansion in Elk Point; TC Energy’s Turney Valley Generating Station in Turner Valley; and, Tidewater Midstream’s BRC Integrated Steam Methane Reforming Project in Cynthia.

CCUS technology is seen as key to Alberta’s Hydrogen Roadmap which aims to make the province a hydrogen powerhouse within the decade. The policy depends heavily on the use of carbon capture to reach Canada’s net zero goal. The federal government wants to become a global leader in hydrogen use as part of its effort to  cut carbon emissions from coast to coast. Kenney has met with federal Finance Minister Chrystia Freeland to ask the federal government to deliver on its promise to provide an investment tax credit for capital invested in CCUS projects in 2022. “We need the government of Canada to come to the table in a big way,” he said.

In late 2020 the federal government released its Hydrogen Strategy for Canada, which is designed to leverage the nation’s energy industry, tech sector, and growing renewable energy resources to become one of the top three clean hydrogen producers in the world. Ottawa has established a $1.5-billion Low-Carbon and Zero-Emissions Fuels Fund but experts say that is likely insufficient and is less than other countries such as Germany and France have earmarked for growing their domestic hydrogen sectors.

“The seven successful projects we have selected so far are game-changers for cutting emissions in Alberta,” Kenney said at a news conference, noting they will cut about 2.9 million tonnes of emissions by 2030 and create an estimated 2,200 jobs. “They are incredible initiatives based on homegrown Alberta ingenuity and leading edge technology.”

The U.S. is ready to invest heavily in hydrogen. “One of the important ways to achieve net-zero carbon emissions is to find innovative approaches to create clean sources of energy like hydrogen,” said U.S. Secretary of Energy Jennifer Granholm in a recent announcement of funding several $2-million grants for clean-hydrogen projects.

Clean hydrogen production could generate up to US$130 billion annually in revenues while lowering greenhouse gases by 120 million metric tons of carbon each year, according to a simulation generated by Energy Policy Solutions and quoted in a report by the University of Houston.

But, as in Canada, there’s concern at the thought of hydrogen created using emissions-producing fossil fuels, and a push for using water to make hydrogen. Currently, the report said, the U.S. produces and consumes about 10 million metric tons of hydrogen annually but less than 1% of it comes from green hydrogen. And while fossil-based hydrogen costs about US$1.80 per kilogram to make, green hydrogen costs between US$3 and US$6.55 for the same volume.

That won’t always be a limitation, as the technology is advancing and U.S. President Joe Biden’s administration has an initiative to reduce the cost of clean hydrogen by 80% within a decade. Projects being funded by the Department of Energy involved creative ways of using coal, biomass and waste plastic blends to generate clean hydrogen.