The last issue of ERQ included two excellent articles that analyze the use of hydrogen in Canada’s attempt to reduce greenhouse gas emissions. The first was titled “Is Hydrogen the Silver Bullet”^[1] outlined various government commitments by the Canadian government, the provinces of British Columbia and Alberta, the United States, Europe and the UK. The article also outlined the regulatory challenges and included a commentary on green hydrogen by a Research Director at Siemens.

The second article addressed the British Columbia program to reduce regulatory barriers to hydrogen investment.^[2] This article concerns the announcement by the Alberta government on November 5, 2021 of the new Alberta hydrogen roadmap.^[3] The roadmap builds on the previously announced 2020 Alberta Recovery Plan^[4] and Natural Gas Vision and Strategy^[5] and follows the government of Canada’s hydrogen strategy^[6] announced in December of last year.

Alberta has joined a growing number of international countries and companies that have announced strategies to benefit from the hydrogen economy or have already made investments since 2019. For Alberta, the hydrogen economy has been called a $100B opportunity and the roadmap shows why hydrogen holds significant promise for the Alberta economy.

Alberta is the largest producer of hydrogen in Canada and has been producing hydrogen for more than 50 years. While hydrogen gas is already being produced and utilized as an energy carrier and feedstock, it is mostly used in industrial settings and has a higher carbon intensity. The promise is to produce hydrogen gas using low- or zero-emission sources, enabling hydrogen to drive deep decarbonization efforts across all sectors of the economy. This would position Alberta as a leader in Canada’s push to net zero and attract investment into the Alberta economy that has been reluctant to invest in other carbon-intensive fuels. The roadmap signals that ambition for Alberta and allows the industry to develop hydrogen in a more coordinated way.

THE ALBERTA ROADMAP

The roadmap focuses on “clean” hydrogen and avoids the distinction between low-emission and zero-emission (or “green”) hydrogen. In that sense the roadmap is technology neutral and envisions low- or zero-emission sources of hydrogen as both contributing to the decarbonization strategy. Hydrogen can be produced from many different sources. Hydrogen made from natural gas, for example, will result in carbon emissions. But, as long as you abate those emissions by using, for example, carbon capture utilization and storage (CCUS), progress is made in reducing carbon emissions.

Alberta is ideally situated to produce hydrogen from fossil fuels. It has a low-cost natural gas feedstock and can build on its existing expertise and infrastructure. Additionally, Alberta has proven CCUS expertise with the QUEST and CCS Project at the Shell Scotford Refinery and the Alberta Carbon Trunk Line, a 240-km pipeline that can transport 15 million tonnes of carbon dioxide annually, ultimately injecting the carbon in old oil and gas reservoirs. Both of these projects use proven technology that can be scaled up.

Alberta has shovel-ready economic solutions that can meet the immediate need to decarbonize as soon as possible. Additionally, operating and capital costs for hydrogen production from natural gas are significantly less as compared to hydrogen production from renewable sources through electrolysis. Alberta’s roadmap mentions various uses for hydrogen including heating, transport, power generation and energy storage, industrial processing and exports. Building local demand depends on the establishment of hydrogen hubs. Hubs are essentially regions where users of hydrogen are co-located, whether in the transportation, industrial or energy markets. Hubs make infrastructure investments more cost effective and Alberta has already announced two hubs in the Edmonton and Medicine Hat regions. In total, six such hubs or collaborative industrial clusters have been identified in the province.

The roadmap signals that while some technologies in the hydrogen value chain are mature, some will require further investment, innovation and scale-up. Some simple projects are already moving forward. For example, hydrogen blending in the natural gas supply stream is the subject of an ATCO trial in the Fort Saskatchewan area. We can anticipate more projects like these — perhaps on a larger scale. Additionally, Alberta has started to invest in heavy-duty electric trucks powered by hydrogen fuel cells. The project envisions further investment in a distribution network for vehicle fueling.

The roadmap to a large-scale and low-carbon hydrogen industry is predicated on hydrocarbon fuel being uneconomic for the end-user. Neither target hydrogen production prices or carbon pricing mechanisms are mentioned in the strategy so this aspect of the pathway is unclear.

CONCLUSION

Alberta’s hydrogen roadmap is the latest, and strongest, signal of its ambition to become a leading clean energy provider domestically and on a world stage. It aims to capitalize on its existing resources and expertise, and the roadmap provides a path forward to support the coordinated development of a clean, innovative hydrogen industry that will benefit Albertans and establish Alberta as a major global player in the hydrogen economy.

* Bob Heggie is the Chief Executive of the Alberta Utilities Commission.

1. Jay Lalach et al, “Is Hydrogen the Silver Bullet” (2021) 9:3 Energy Regulation Q 8.
2. Eric Bremermann, Glenn Zacher & Daniel Gralnick, “British Columbia Reduces Regulatory Barriers to Hydrgen Investment” (2021) 9:3 Energy Regulation Q 19.
3. Alberta, Ministry of Energy, Alberta Hydrogen Road Map, (Edmonton: Government of Alberta, 4 November 2021), online (pdf): <open.alberta.ca/dataset/d7749512-25dc-43a5-86f1-e8b5aaec7db4/resource/538a7827-9d13-4b06-9d1d-d52b851c8a2a/download/energy-alberta-hydrogen-roadmap-2021.pdf>.
4. Alberta, Ministry of Treasury Board and Finance, Alberta’s Recovery Plan, (Edmonton: Government of Alberta, 29 June 2020), online (pdf): <open.alberta.ca/dataset/27b15abd-0f96-4e6b-8ea5-8b0b4f2ec797/resource/0f6a4f8d-44d0-44a4-81e0-7bdfcb06f4b1/download/tbf-albertas-recovery-plan-2020.pdf>.
5. Alberta, Ministry of Energy, Getting Alberta back to work: natural gas vision and strategy, (Edmonton, Government of Alberta, 6 October 2020), online (pdf): <open.alberta.ca/dataset/988ed6c1-1f17-40b4-ac15-ce5460ba19e2/resource/a7846ac0-a43b-465a-99a5-a5db172286ae/download/energy-getting-alberta-back-to-work-natural-gas-vi sion-and-strategy-2020.pdf>.
6. Natural Resources Canada, Hydrogen Strategy for Canada, (Ottawa: Government of Canada, December 2020), online (pdf ): <www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/environment/hydrogen/NRCan_Hydrogen-Strategy-Canada-na-en-v3.pdf>.