NATURAL RESOURCES
The Hydrogen Story
By Marissa Dimmell
Across Western Canada’s energy sector, sustainability is on the minds – and in the business plans – of more and more companies. Hydrogen has emerged as key to helping the federal government achieve its target of net zero carbon emissions by 2050. The West’s abundant access to affordable natural gas and the geological features required for carbon sequestration position the region to become a global leader in blue hydrogen production.
Concrete investment is starting to follow. Industry heavyweights Suncor Energy and ATCO have announced plans for a facility that will produce more than 300,000 tonnes of hydrogen per year and that would enable a reduction of carbon dioxide emissions in Alberta by more than two million tonnes per year. And Air Products and Chemicals, Inc., an American company, has announced plans to build a $1.3-billion hydrogen facility in Edmonton, with a goal of opening in 2024. But building major hydrogen facilities isn’t cheap: substantial financial and regulatory support is needed from both provincial and federal governments to turn these projects into a reality.
Using hydrogen for energy is by no means new. Its long and impressive history includes fueling the first internal combustion engines as well as the rockets that carried man to the moon. Its future role in helping decarbonize energy systems is equally, if not more, exciting.
Burnaby’s Ballard Power Systems:
A Hydrogen Fuel Cell Pioneer
In 1979 in Burnaby, BC, Geoffrey Ballard, Keith Prater and Paul Howard founded Ballard Power Systems. Their mission was to conduct research and development of high-energy lithium batteries. Four years into their work, a research breakthrough led to the development of proton exchange membrane (PEM) fuel cells, a pioneering technology that soon became the company’s primary focus. In the years that followed, Ballard Power Systems established itself as a global leader in the PEM industry, with its hydrogen fuel cell technology leading the way in the development of zero-emission fuel cell technologies for ships, transit buses, trains and cars. As of 2020, fuel cell electric vehicles powered by Ballard had driven over 50 million kilometers—enough to circle the globe 1,250 times. And the company continues to innovate; in its newest venture, Ballard launched a high-performance fuel cell module for marine applications known as FCwave™.
Hydrogen to decarbonize the future
As the world seeks new ways of decarbonizing transportation and industry, governments across the world are betting on hydrogen to play a critical role. Hydrogen offers a non-emitting fuel alternative for sectors where electrification is not a viable solution, including freight transportation, resource extraction, power generation, manufacturing and the production of steel and cement—among others. And Western Canada is well positioned to be a supplier of hydrogen, both for domestic uses and for export.
HOW IS HYDROGEN PRODUCED?
Hydrogen is a naturally occurring element that is found in substances such as water, methane and propane. Currently, hydrogen is extracted from two main sources: natural gas and coal, with extraction from water also starting to grow. The different processes of hydrogen extraction are commonly categorized by color to indicate their environmental impact.
Blue/grey: The dominant source of global hydrogen production—both globally and in Canada–is from natural gas, using a process called Steam Methane Reforming. As this method of hydrogen production produces carbon emissions, it is often coupled with carbon capture and sequestration technologies (CCS). When carbon capture is applied, the hydrogen is termed “blue”; with no carbon capture, it is “grey”.
Green/pink: Electrolysis, the process whereby electricity is used to separate water into hydrogen and oxygen, is another means of hydrogen generation. When renewable electricity is used for the power source and no carbon emissions are released into the atmosphere, the product is termed “green.” Pink means that electrolysis is powered by nuclear energy.
Brown: Hydrogen can be sourced from coal when combined with water and heated at high temperatures. This is termed “brown”.
But there’s a problem with using the terminology of colours: it masks the real problem, which is lifecycle carbon intensity. Colours are used as a proxy for these emissions, but they aren’t the same thing. All the colours of process result in some level of emissions, as well as having other environmental impacts (such as water use, which is heavy for all types of hydrogen production)—and there is a wide range of emissions possible under each of the colours. As Canada moves to meet its commitment to reduce GHG emissions by 30% below 2005 levels by 2030, hydrogen will likely have to be part of the mix. But planning will have to recognize a range of factors that include emissions, cost, efficiency and geography. Nonetheless, blue hydrogen is presenting itself as a key energy alternative, one that shows promise of becoming a Western Canadian strength.
As the leading producer of hydrogen in Canada already—accounting for 76% of the national hydrogen production—the Western provinces are positioned to start making large—and cheap–quantities of hydrogen in the near future. The region’s abundance of natural gas will make it the second cheapest supplier of “blue” hydrogen (that is, hydrogen made from natural gas, with the carbon emissions sequestered) in the world, just behind Russia. Ample solar, wind and hydro resources across all four Western provinces also provide a non-emitting energy resource for producing hydrogen from water using electrolysis (“green” hydrogen).
Western Canada also offers other substantial advantages for commercial-scale hydrogen production. For one, the unique geology of the Western Canadian Sedimentary Basin that extends across Manitoba, Saskatchewan, and Alberta—especially the region’s depleted oil and gas reservoirs—is ideal for CO2 storage—and there are not many places in the world that have similar geology. The West’s transferable experience in fossil fuels is another key competitive advantage, including a workforce with transferrable skills, expertise in developing and managing large-scale energy projects, an established regulatory framework, and infrastructure assets that can be adapted for new uses.
From a Western perspective, the growth of the hydrogen sector in the region offers another critical advantage—a lifeline for the fossil fuel industry. A retooling of the West’s fossil fuel industry is forecast to yield a $100 billion-per-year market in hydrogen-based energy, an opportunity to diversify Western Canada’s natural gas markets.
Looking forward
In December 2020, the Government of Canada published its Hydrogen Strategy for Canada, a strategy that sets the ambitious goal of positioning Canada as a leading exporter of hydrogen by 2050. As close to 20 countries across the world now work to implement their respective hydrogen strategies, Canada has a potentially enormous opportunity ahead – if it can get all the pieces in place, in a timely way.
But if Western Canada is going to come out on top, addressing key obstacles will be critical. For all the competitive advantages Western Canada brings to the table, the fact remains that getting the hydrogen to export markets is the rate-limiting factor for the region, and stems from both political and logistical challenges. The Transition Accelerator is working to set up hydrogen hubs across the country to make low-cost hydrogen, and in turn connect the hubs to create a pan-Canadian hydrogen economy. And importantly, they are already testing long distance freight trucks to run on hydrogen.
Robust hydrogen transportation networks and export facilities will need to be established. Depending on the nature of the project, the building of new infrastructure to support the sector may also require lengthy regulatory review and approval process. As much as Western Canada brings expertise to this side of project management from its experience in fossil fuels, new standards for transparent monitoring, verification and certification process may need to be implemented. There are also financial obstacles that are critical to getting these projects off the ground, especially when it comes to the cost prohibitive nature of retrofitting existing infrastructure to meet the hydrogen sector’s needs. In the end, the West’s best bet might be in attracting industries that would use the hydrogen it seeks to produce- rather than shipping it elsewhere.