There is growing momentum towards moving to a low carbon future throughout the world and Premier Jason Kenney sees great potential for blue hydrogen for the Province of Alberta in connection with this future.

The Hydrogen Economy Abroad

Hydrogen is quickly emerging as a leading source of clean fuel in the global economy. In 2019, as part of a multi-year initiative, Japan received the world's first shipment of foreign-origin liquid hydrogen from the port of Dar es Salaam in Brunei. This was a critical first step in Japan's long-term hydrogen strategy, announced in 2017, which sets discrete economic targets and calls for increased investment in hydrogen infrastructure, technological advancements, and the development of a hydrogen supply chain with trade partners around the globe. Japan has laid out a plan for the coming decade to import 300,000 tonnes per year of hydrogen for fuel, signaling a clear transition to a hydrogen powered economy.

Japan is not alone in its hydrogen strategy. Since its announcement in 2017, other jurisdictions around the world have begun setting their own targets for a hydrogen transition. For example, the EU's European Green Deal proposes to invest EUR $1 trillion over the next decade to develop hydrogen infrastructure and production systems. These investments aim to support a hydrogen powered economy as part of the EU's push towards carbon neutrality by 2050.

What are Canada and Alberta's Plans for Hydrogen?

At the Federal level, the Government of Canada has taken action domestically and abroad. In 2019, Canada announced a plan to meet net-zero carbon emissions by 2050. In 2020, Canada released a strengthened climate plan that highlights hydrogen as an exciting economic transformation opportunity. Looking abroad, Canada entered an agreement with Germany in March of 2021 to collaborate in developing low-carbon energy policy, trade, and innovation. While the agreement remains in its nascency, it demonstrates Canada's potential to become a global exporter of green hydrogen to European markets as they scale up hydrogen infrastructure and industrial reliance on cleaner fuels.

In Alberta, the Provincial Government announced a plan in 2020 to become a global supplier of clean natural gas and related products, including hydrogen. As part of Alberta's 'Natural Gas Vision and Strategy', Alberta aims to deploy large-scale hydrogen production with carbon capture and storage throughout the provincial economy by 2030, and to become a global exporter of clean hydrogen by 2040. 

Canada already produces green, grey, and blue hydrogen (each variant is categorized according to its method of production and emissions impact). However, blue hydrogen offers the most growth potential for Alberta due to the abundant supply of natural gas in Alberta, underground reservoirs or storage basins in the Western Canadian Sedimentary Basin, and its existing natural gas infrastructure. 

Alberta's plan involves taking a portion of the Province's natural gas (made of CH4, four hydrogens and one carbon), and extracting the lone carbon. The carbon stripped out in this process is then sequestered as CO2 in deep underground reservoirs or caverns, or used as an input in other industrial processes. In short, the carbon never enters the atmosphere-the signature characteristic that makes this "blue hydrogen". This results in nearly pure hydrogen and mitigates the environmental impact of CO2 being released into the atmosphere.

Alberta already has the resource potential and geologic characteristics to capitalize on this transition. In addition to abundant natural gas supply and underground reservoirs or storage basins to capture the CO2, there are already viable domestic markets for hydrogen. First, there are multiple industrial processes that require hydrogen as input. Second, many industrial processes, such as gas-fired electric plants, are fueled by natural gas, and can take certain levels of hydrogen in the gas mix without requiring retrofits. Lastly, even where modifications to existing infrastructure will be required, retrofitting or enhancing portions of Alberta's vast natural gas infrastructure for hydrogen will be much more cost effective than creating an entirely new infrastructure system.

Developing a national system to support widespread hydrogen usage will be a large undertaking. In order to fulfill Alberta's Natural Gas Vision and Strategy, public and private sector support is essential. Alberta will also need significant funding, political support, and regulatory backing to implement its vision. A future widespread hydrogen network would need to encompass production, transport, export, and retail fueling. However, Alberta's advantage is undeniable.

Looking Forward

In order to realize the Province of Alberta's and the Government of Canada's ambitious low carbon future, midstream and downstream companies will need to upgrade or retrofit their existing infrastructure to serve consumers with reliable, safe, and cost competitive low carbon energy choices. One of the key challenges to this low carbon future and the blue hydrogen economy in Alberta will be obtaining sufficient funding for this infrastructure update. It will likely require finding ways to de-risk private sector investment with public support in this emerging market.

Despite these challenges, Alberta's advantageous conditions make it a natural fit for the blue hydrogen economy. As the role of hydrogen continues to expand in the local and global supply chain, Alberta is poised to seize on exciting opportunities in this emerging sector. Time will tell if Canadian regulatory and market incentives follow this global trend.

The author would like to acknowledge the support and assistance of Sebastian Maturana, articling student at law.

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