This column is an opinion from Dan Zilnik, the president of AFARA, a firm that specializes in the math, science and economics of sustainability.
Last week, Premier Jason Kenney unveiled the province's new natural gas strategy, and detailed how the Alberta government will continue to be an avid and vocal supporter of natural gas expansion.
Canada is the fourth largest producer of natural gas in the world, with Alberta leading in Canada, so it makes sense to have a "made in Alberta" natural gas strategy.
Interestingly, the word hydrogen is used 44 times in this natural gas strategy; so maybe this is more a natural gases (plural) strategy. But hasn't Canada been down this hydrogen highway before?
Many Canadians lost their shirts, and their homes, when hydrogen stock market darling Ballard Power lost nearly 90 per cent of its value in a year (in the early 2000s). Those Canadians might be asking, "What is different this time round?" And the answer is … everything, including the colour of the hydrogen.
The hydrogen economy, Take 1
In the late 1990s and early 2000s, Canada was a global leader in the hydrogen economy, with a scheme to replace gas-guzzling, fossil-fuelled engines with clean-burning, hydrogen fuel cells. This vision was grand, innovative and ultimately a bust.
To work, the concept needs an extensive network of pipelines moving hydrogen around the country as well as fuelling locations to put hydrogen in fuel tanks, where the hydrogen then mixes with oxygen in a fuel cell to create electricity to power the cars' motors.
Cynics point to the efficiency loss in this process when compared with an electric car, but more challenging is that this fuel cell scheme is an all or nothing chicken-and-egg dilemma.
To run hydrogen fuel cell vehicles across the country, you need many hydrogen recharging stations. If there is nowhere to refuel a car, why own one, and if there are no cars around, why build refuelling stations? Chicken, meet egg.
So, it is understandable to ask why the hydrogen economy will work this time. The answer is that the Alberta hydrogen economy has little or nothing to do with fuel cells. It is based on a different innovation to create "blue hydrogen."
Blue hydrogen contingent on carbon capture
The Alberta vision is to take a portion of Alberta's abundant natural gas (made of CH4, four hydrogens and one carbon), and strip out that one carbon. Now you have an emissions free, high energy fuel: "blue hydrogen." Of course, all hydrogen has no colour.
The trick with this blue hydrogen economy is to ensure that the carbon stripped out of the natural gas never enters the atmosphere to become an active greenhouse gas. This means either forever sequestering the carbon as CO2 in deep underground reservoirs or caverns, or using the carbon as an input into another industrial process; this is the technology innovation called carbon capture usage and storage (CCUS).
So, let's be clear, the blue hydrogen vision is completely different from the fuel cell vision, but is completely contingent on CCUS.
While Alberta's vision of a blue hydrogen economy is not the fuel cell scheme from two decades ago, is it better?
The good and the bad of blue hydrogen
Fortunately, the blue hydrogen economy is not a chicken-and-egg problem; there is existing infrastructure and there are markets.
Most processes that use natural gas, such as gas-fired electric plants, can take up to 20 per cent hydrogen in the gas mix today without requiring retrofits and new equipment.
As well, there are multiple industrial processes that need hydrogen, and many of those processes are stationary and centralized together in industrial zones, like the industrial heartland northeast of Edmonton.
So Alberta and Canada can de-risk the hydrogen opportunity step by step, instead of the all-or-nothing proposition of the fuel cell economy.
Also, the opportunity is huge; recent analysis shows that 27 per cent of Canada's primary energy demand can be met by blue hydrogen by 2050, making blue hydrogen a big part of reaching our climate goals.
The challenge is that you need geology on your side.
Storing CO2 safely and permanently means that you need multiple storage sites deep underground. Thankfully, in Alberta we have just that.
Since late 2015, Shell has captured and stored over five million tonnes of CO2 safely two kilometres underground at its refinery near Fort Saskatchewan. We are also seeing the emergence of CO2 conversion technologies that use the carbon to make things like concrete and cement, carbon tubes and coating and even, believe it or not, premium vodka.
Carbon storage is proven under certain geological conditions, carbon conversion is emerging and promising. But you cannot replace geology, and not everywhere in Canada is suited for carbon storage.
Maybe the biggest issue is the cost of carbon capture itself, needed for carbon storage and carbon conversion.
At the natural gas strategy announcement, ATCO chair and CEO Nancy Southern summed it up well when she noted that "cracking the carbon capture nut on a commercial level" is the major hurdle to Alberta scaling up the production of hydrogen that can be used as a clean energy source.
The blue hydrogen economy is likely to be a big emissions win and a big economic win, and it has little to do with the hydrogen economy of the 1990s and 2000s. But while it's exciting, success will take effort and is not inevitable. Job 1 is to continue to bring down the cost of carbon capture.
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