[co-author: Kenryo Mizutani – Articling Student]
Increasing Interest in Hydrogen in Canada and Alberta
Hydrogen has gained the attention of Canadian policy makers and industry players. Notably, the Canadian government announced in June 2020 an upcoming national hydrogen strategy, and the Government of Alberta unveiled its Natural Gas Vision and Strategy in October 2020, in which hydrogen plays an important role. Alberta’s Industrial Heartland (AIH), with its existing related infrastructure and industrial development, is well-positioned to play a foundational role in the further development of Canada’s hydrogen economy.
In our prior post, Hydrogen 101: Basics of Hydrogen Supply Chains, we explained the fundamentals of hydrogen supply chains. We also explored the national hydrogen strategies of Germany and the EU, Japan and South Korea, and Australia in a series of prior posts. As Canada and Alberta develop their respective hydrogen strategies, these posts set the stage for understanding key themes of hydrogen supply chains.
As part of Alberta’s Natural Gas Vision and Strategy, Alberta seeks to engage in large-scale hydrogen production with carbon capture, utilization, and storage (CCUS) through the deployment of various hydrogen uses within the province by 2030. By 2040, Alberta aims to export hydrogen nationally and globally. As part of our New Energy Economy Series, we commented on Alberta’s Natural Gas Vision and Strategy in a previous post.
The Natural Gas Vision and Strategy was followed by the Alberta Petrochemicals Incentive Program (APIP), an incentive program aimed to stimulate petrochemical industries, including the production of hydrogen. For full details on the APIP, please see our post, Alberta’s APIP Aiming the Province to Petrochemical Facility Leadership.
Alberta Industrial Heartland as Canada’s First Hydrogen Node
On November 16, 2020, the Transition Accelerator released its final report, Building a Transition Pathway to a Vibrant Hydrogen Economy in the Alberta Industrial Heartland (the “Report”). The Report is the culmination of the work of the Alberta Industrial Heartland Hydrogen Task Force, a multi-disciplinary group led by five municipalities forming the AIH: the City of Edmonton, the City of Fort Saskatchewan, Strathcona County, Lamont County, and Sturgeon County.
The Report outlines how to establish a hydrogen economy in Canada, recommending a focus on sub-regional hydrogen nodes. These are municipalities and specific transportation corridors with reliable supplies of low-cost hydrogen, significant consumption markets, and cost-effective means to connect the two. Each node will aim to develop economically self-sufficient local hydrogen economies, which can then be connected as national and global hydrogen sectors grow. The Report hails the AIH as a prime location for Canada’s first hydrogen node.
AIH Currently Produces Hydrogen and Has Existing Distribution and Sequestration Infrastructure
The AIH is an excellent candidate for Canada’s first hydrogen node because it currently produces about 2.25 kilotonnes of hydrogen per day, has an operating hydrogen pipeline in the ground, as well as two carbon dioxide pipelines. In addition, the companies active in existing hydrogen uses are located in proximity to one another, and the AIH region contains geological formations suitable for CCUS, which is key for most blue hydrogen production.
While the majority of hydrogen currently produced in the AIH is grey hydrogen, there are three facilities producing blue hydrogen: the Shell Scotford Refinery, the Northwest Refinery, and the Nutrien fertilizer plant. Roughly two-thirds of the produced hydrogen is currently used as feedstock for upgrading and refining bitumen/crude oil, with the other one-third is…