How Will Blue Hydrogen Affect Alberta’s Energy Industry?
As countries start to emerge from the COVID-19 crisis and the question of how to re-start ailing economies becomes more urgent, one solution being touted is the development of an aggressive strategy into the profitable hydrogen industry – and with that the commercialization of blue hydrogen as a low-carbon energy source.
Many governments are developing hydrogen strategies as a means of cutting CO2 emissions to meet climate goals, however in light of the global pandemic, the emerging hydrogen industry is being considered a viable economic solution for many countries.
“The carbon content of hydrogen will be the new currency,” predicts Jorgo Chatzimarkakis from Hydrogen Europe.
Canada is well-positioned to benefit from growing international demand for hydrogen and fuel cells. The Canadian government is planning to reveal a comprehensive national strategy for hydrogen by the end of summer 2020. Blue hydrogen will become Canada’s a zero-emission energy fuel that can be used for transportation, heating or chemical energy. It can also be used to both generate and store electricity.
“We are seeking to identify opportunities for clean hydrogen production, while also identifying export market growth potential for Canadian clean hydrogen, as well as hydrogen and fuel-cell technologies and services.” in a statement from Natural Resources Canada on June 7th.
As countries weigh various future energy market scenarios required to meet the Paris Climate Agreement’s long-term temperature goals, blue hydrogen is emerging as one of the most viable energy methods because it emits only water vapour when combusted. Which again bodes well for Canada due to our vast natural gas supply, the major component in the production of blue hydrocarbon.
“If you want a hydrogen economy, the main and most efficient place to get that is through natural gas,” said Tristan Goodman, president of the Explorers and Producers Association in Canada.
What is Blue Hydrogen?
Hydrogen is the most abundant element in the universe, but it does not occur naturally. Almost all of the hydrogen currently produced worldwide is called ‘grey hydrogen’. Production currently takes place via Steam Methane Reforming (SMR). High pressure steam (H2O) reacts with natural gas (CH4) resulting in hydrogen (H2) and the greenhouse gas CO2.
The term ‘blue hydrogen’ or ‘low carbon hydrogen’ is used when the CO2 released in the production of grey hydrogen is largely (80-90%) captured and stored. This is also called CCS: Carbon Capture & Storage.
“The production of early, large-scale quantities of low-carbon hydrogen from natural gas with CCS will be essential for a decarbonized industrial sector,” said Graeme Sweeney, chairman of the Zero Emissions Platform (ZEP), the EU’s official advisor on CCS, in the European Parliament in January 2020.
How Will Albertans Benefit from the Hydrogen Economy?
Alberta can make carbon-free hydrogen at a lower cost than almost any place in the world. This is especially the case for blue hydrogen as Canada is ranked as the second lowest cost producer (next to Russia) in the Asia-Pacific region.
The Alberta government is hoping to lead the country’s production of blue hydrogen, as Canada’s largest producer of both hydrogen and natural gas, it already has some important building blocks in place.
“Alberta has a huge competitive advantage, as we are already one of the world’s largest hydrogen producers and we can make hydrogen for about half the cost of diesel fuel,” says Dan Wicklum, President and CEO of The Transition Accelerator, a national organization
The goal of Alberta’s hydrogen plan is to establish “a very aggressive and profitable hydrogen industry”, according to Dale Nally, Alberta’s associate minister of natural gas.
Important building blocks for achieving this goal is Alberta’s Industrial Heartland Hydrogen Task Force, established in May, and the completion of the Alberta Carbon Trunk Line (ACTL) completed in June. The Industrial Heartland, located near Edmonton, is Canada’s largest hydrocarbon processing centre, and connected to oilfields in central Alberta by the ACTL, the largest CO2 pipeline in the world.
“By building on the existing knowledge and skillset of Albertans, we can attract new investment to our natural gas sector, create jobs, achieve environmental objectives, and grow Alberta’s economy,” says Dale Nally. “I look forward to seeing this Task Force help our province to become a competitive supplier of low-emission and affordable hydrogen for Canada and the world.”
The province’s hydrogen development plan, which is also meant to reduce Alberta’s greenhouse gas emissions and diversify its economy, is to be released as part of a larger blueprint for the future of the province’s gas and petrochemical industries.
Blue Hydrogen Globally
Production capacity of blue hydrogen is expected to grow significantly over the next decade. By 2028, blue hydrogen production should reach about 3.3 million metric tons per year, up from its current capacity 0.6 million mt/yr, according to data from Platts Analytics’ Hydrogen Market Monitor.
Several of the world’s largest automakers, including Toyota, Honda, and Hyundai, have indicated that they see fuel cells as a vital zero-emissions technology and have launched, or will soon launch, various new fuel cell vehicles — all of which will ideally be powered by renewable hydrogen.
Globally, Canada is the fourth largest producer and sixth largest exporter of natural gas. Canadian marketable resources of natural gas can sustain current production levels for up to 300 years. With that, Alberta is positioned lead the hydrocarbon transition to a Net-Zero Canada – a win for Albertans and a win for all of Canada.
“The opportunity that hydrogen presents to Alberta and Canada can’t be understated,” said Graeme Feltham, ATCO vice-president of customer experience and initiatives.
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