The Canadian province of Alberta already has six blue hydrogen-related projects in the planning stage, with an estimated total capital investment of more than C$14bn ($10.8bn).

But environmental groups such as Friends of the Earth and Greenpeace have joined promotors of green hydrogen such as Australian mining billionaire Andrew Forrest in opposing blue hydrogen development.

Hydrogen Economist interviewed Dale Nally, Alberta’s associate minister of natural gas and electricity, to learn more about the reasons for the province’s early success in attracting blue hydrogen-related projects, as well as the potential for a backlash.

Alberta has already lined up a large slate of world-scale blue hydrogen-related production projects, including many for export. What are the major reasons the province is off to such a quick and strong start?

Nally: This province has many natural advantages in the production of clean hydrogen, including enormous and cost-competitive natural gas resources; our growing renewables sector; well-developed infrastructure to start introducing hydrogen into our energy system; existing energy sector expertise; and a capacity for carbon capture, utilisation and storage. In addition to having the lowest tax rate in Canada—and one of the lowest in North America—as well as our constant push to reduce unnecessary red tape, we are also one of the most business-friendly environments for companies to invest in.

C$14bn – Alberta’s investment in hydrogen projects

These factors, alongside clear policy direction from this government with our natural gas strategy and vision and hydrogen roadmap, coupled with critical programmes such as the Alberta Petrochemicals Incentive Program, have made us a natural place for clean hydrogen investments.

While we have seen enormous initial interest in natural gas-fed hydrogen, it is important to note Alberta is completely technology-agnostic as to how hydrogen is produced here, and we absolutely welcome investment in electrolytic hydrogen projects as well as other methods of clean hydrogen production.

What do you see as the most likely export markets for Alberta’s blue hydrogen-related products, and in what timeframe should we see first exports?

Nally: We are moving quickly and expect to see the first exports in the near future. Under Alberta’s hydrogen roadmap, we identified two possible scenarios for exports by 2030: an incremental one, where these exports are mostly reliant on carriers such as ammonia, with plans for expanded exports to come, and a transformational scenario, where as much as 1mn t/yr of piped gaseous hydrogen and 1mn t/yr of ammonia are exported to target markets.

Our aim is obviously to see this transformative scenario become reality. We have already seen interest from companies wishing to import Albertan hydrogen products, primarily in Japan and South Korea. These potential ammonia exports have benefits in that they can be moved by existing rail and shipping infrastructure, so Alberta could theoretically begin exporting these clean energy products as soon as projects are complete and complementary infrastructure at ports is developed.

Other target export markets include the US, in particular western coastal states such as California, as well as other Canadian provinces.

Do you believe the early success of blue hydrogen in places such as Alberta could lead to a substantial backlash, much as your province saw against the oil sands once their development picked up early this century?

Nally: The purpose of clean hydrogen is to reduce carbon emissions. Consequently, we are focused on the overall emissions related to any form of hydrogen production, not on the type of production itself. To that end, we are working with national and international organisations to establish clear standards for the measurement and evaluation of carbon emissions associated with hydrogen production. We believe our natural gas-based production, when paired with carbon capture, can be extremely competitive—not just in terms of cost, which will be among the lowest in the world, but in terms of absolute carbon emissions.

For example, the Air Products hydrogen production plant announced last year aims to capture 95pc of carbon emissions associated with its autothermal reforming hydrogen production process. This will be a global example of efficient and effective hydrogen production that contributes enormously to reducing emissions. As projects such as these come online, and the world sees Alberta’s production can assist with global decarbonisation efforts, we expect concerns about specific production pathways to matter less and the focus to remain on emission intensity.

“We are moving quickly and expect to see the first exports in the near future”

At the end of day, our government supports a fact- and science-based approach to carbon intensity of production. To this end, we absolutely support the development of pan-Canadian and global carbon intensity thresholds that are grounded in science and not ideology.

In addition, Alberta has the potential for almost emissions-free hydrogen production using our growing renewable energy sector, especially in the power generation and storage sector. While early investments may be focused primarily on natural gas-fed production, Alberta’s hydrogen roadmap is technology-neutral and, again, focused primarily on emissions intensity above all else.

What do you think developers of blue hydrogen projects should do to counter this potential threat?

Nally: The development of credible and science-based carbon intensity thresholds and metrics will be absolutely critical as deployment markets and trade develop. As Canadian and global carbon intensity benchmarks and guarantee-of-origin schemes are proposed and developed, Alberta needs to be at the table and actively inform their development with data grounded in robust analysis and science. The fact that natural gas hydrogen projects are being considered and invested in by the private sector is a good indication that the global market will be looking at all sources of clean hydrogen production—not taking an exclusive approach to any one method.

---

Author: Vincent Lauerman