Both Canada and Alberta released clean hydrogen strategies last year with the goal of the country and province becoming major players in the emerging global industry in coming decades. The Canadian strategy is very much in step with Alberta’s, with the federal government expecting blue hydrogen to dominate production in the shorter term as green hydrogen takes longer to become competitive.

To their credit, the federal and Alberta governments appear to be quickly laying the groundwork to achieve their common goal. Over the past several weeks, two world-scale blue hydrogen projects have been proposed for Alberta. In addition, on 9 June the province’s top five oil sands producers formally announced a joint initiative to economically achieve net-zero emissions from their operations by 2050, which also has significant implications for the blue hydrogen industry in Alberta.

Mega-projects

In mid-May, oil sands heavyweight Suncor Energy and Calgary-based utility ATCO announced they were collaborating on early stage design and engineering work on a ‘multi-billion dollar’ project to produce more than 300,000t/yr of blue hydrogen. It is to be located at ATCO’s Heartland Energy Centre near Edmonton.

The beauty of the proposed project is that it largely deals with the chicken and egg problem of matching production with consumption. Suncor is planning to use 65pc of the output to reduce CO₂ emissions at its Edmonton refinery, while ATCO is hoping to blend up to 20pc of production into Alberta’s natural gas distribution system, assuming provincial regulatory approval.

"These sorts of projects are so new, and the costs so high, tax credits will be needed for at least the CCS component of the project" Powell, ATCO

Suncor and ATCO are planning to sanction construction of the project by 2024, with it coming on stream as early as 2028. But it is widely believed additional fiscal incentives will be required to move the project forward within this timeframe, while a number of regulatory hurdles remain.

“These sorts of projects are so new, and the costs so high, tax credits will be needed for at least the CCS component of the project,” James Powell, vice president of clean fuels with ATCO, tells Hydrogen Economist. “At the same time, it not yet known how the federal government will treat blue hydrogen under its upcoming Clean Fuel Standard.”

The same could be said for Pennsylvania-based Air Products and Chemicals’ proposed project, announced in early June, to build a C$1.3bn ($1.05bn) blue hydrogen plant in Edmonton. The goal is to open the 150,000t facility by 2024, based on the memorandum of understanding the company signed with the federal and Alberta governments. But the agreement is subject to further negotiations between the company and these governments for additional financial incentives, on top of the C$15mn it is to receive from the province’s emissions reduction fund.

Oil sands initiative

The ultimate goal of the Oil Sands Pathways to Net Zero initiative—made up of operators Canadian Natural Resource (CNRL), Cenovus Energy, Imperial Oil, MEG Energy, and Suncor; and accounting for about 90pc of oil sands production and working collectively with the federal and Alberta governments—is to improve the likelihood of significant amounts of long-life low-decline oil sands resource being produced well into the future.

And according to Joy Romero, vice president of technology and innovation at CNRL, blue hydrogen is to play an important role in the future reduction of emissions under this initiative, while her company is already ahead of the curve. CNRL was producing around 400,000t/yr of blue hydrogen at its Horizon oil sands facility even before the term ‘blue’ hydrogen was coined, while capturing and storing a total of 2.7mn t/yr of CO₂ from three facilities—including Horizon. “As of now, we’re assessing what’s next,” Romero tells Hydrogen Economist. “Hydrogen fuel cell-powered loaders and ultra class haul trucks are certainly under consideration, as they come onto the market and we need to replace our current fleet.”

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Author: Vincent Lauerman