Oilpatch heavyweights put Canada’s hydrogen ambitions to the test

Oilpatch heavyweights put Canada's hydrogen ambitions to the test

The federal authorities has made no secret about its lofty objective of turning into a worldwide chief in hydrogen as a part of its said effort to scale back dangerous carbon emissions from coast-to-coast. 

A pair of oilpatch heavyweights are actually proposing a mission that can check Ottawa’s urge for food for it.

Suncor Power and ATCO introduced Tuesday they’re partnering collectively on plans for a facility within the Edmonton space that would produce greater than 300,000 tonnes per yr of hydrogen.

Nearly all of the hydrogen could be used at Suncor’s Edmonton refinery and in ATCO’s pure gasoline system. By utilizing carbon seize and storage know-how, the businesses say the mission would scale back CO2 emissions in Alberta by greater than two million tonnes per yr, equal to taking 450,000 automobiles per yr off the street.

‘Crucial’ authorities position

At this level, the proposed facility is in its infancy. For the thought to change into a actuality each firms acknowledge there’s want for presidency help.

Suncor and ATCO say they don’t seem to be asking for direct public funding, however as an alternative an inventory of regulatory and financial coverage measures to make sure any such mission could be worthwhile from each the provincial and federal authorities.

These measures embrace the “availability of carbon sequestration rights, emissions discount compliance credit, rules to permit hydrogen mixing into pure gasoline, and funding tax credit for carbon seize utilization and storage.” 

These are described as “important” to the monetary viability of the mission. 

“We’re hoping that this can speed up the session between the province, federal authorities and trade,” mentioned ATCO chief govt Nancy Southern in an interview.

Contemplating the mission continues to be in its infancy, there isn’t a estimated value, though, in an interview, Suncor chief govt Mark Little mentioned will probably be a couple of billion {dollars}.

“It is a totally different kind of mission from what we have seen up to now, nevertheless it’s one of many causes we’re serving it up now in order that we will work by means of it however we absolutely anticipate to achieve success in coping with all of the challenges to do one thing new and totally different,” he mentioned.

“And massive,” added Southern.

The oilsands produce about 11 per cent of Canada’s whole emissions. (Kyle Bakx/CBC)

The businesses wish to particularly qualify for the Alberta authorities’s petrochemicals incentive program and the federal authorities’s not too long ago introduced funding tax credit score for brand spanking new carbon seize amenities.

“I’m completely happy to see firms reply our name for daring initiatives that may exhibit Canadians’ experience, drive, and spirit to construct a world-leading hydrogen trade. Working with trade on decarbonization is a key a part of our dedication to fulfill our formidable local weather targets whereas creating alternatives for all Canadians,” mentioned Francois-Phillippe Champagne, minister of innovation, science and trade, in a press release.

In Alberta, ATCO has already obtained $2.eight million towards a pilot mission to mix hydrogen into the pure gasoline system to scale back emissions from house heating.

Specialists say hydrogen might assist scale back emissions within the transportation trade. (Eric Piermont/AFP through Getty Photographs)

Negotiations start

On the floor, the proposed mission looks like a logical match for Ottawa because it intersects many federal priorities comparable to selling greenhouse gasoline reductions, spurring the development of extra carbon seize and storage initiatives, and stimulating financial development throughout the transition to lower-emitting sources of power.

Negotiations on the proposed hydrogen facility will begin, as the businesses additionally start engineering and different growth work. A ultimate funding resolution is predicted in 2024 with the ability operational by 2028, on the earliest.

The federal authorities has created a $1.5-billion Low-carbon and Zero-emissions Fuels Fund, however consultants have mentioned that’s probably inadequate and falls under what different nations have dedicated to rising their home hydrogen sectors, comparable to France and Germany.

The federal authorities launched the Hydrogen Technique for Canada in December, which aspires to leverage the nation’s power trade, tech sector, and rising renewable power sources to change into one of many world’s high three producers of fresh hydrogen.

Hydrogen can be utilized to scale back emissions in giant industrial initiatives and for long-haul transportation comparable to marine transport, freight vehicles and trains.

The technique might assist Canada attain its net-zero emissions targets, whereas additionally producing 350,000 high-paying jobs, based on the federal authorities.

The proposal by ATCO and Suncor is a optimistic growth from the oilpatch, mentioned Chris Severson-Baker, with the Pembina Institute, an environmental suppose tank.

“We would wish many extra initiatives like this to attain the form of ranges of discount from the oil and gasoline sector that is wanted, however it’s vital,” he mentioned.

The oilsands are accountable for about 11 per cent of the nation’s whole emissions, based on 2018 information from the federal authorities, and different oil and pure gasoline manufacturing makes up one other 11 per cent.

WATCH | What does ‘clear’ hydrogen imply?

ATCO CEO Nancy Southern and Suncor CEO Mark Little on the environmental impression of manufacturing hydrogen. 1:34

Gray, blue and inexperienced

The federal authorities’s eventual stage of help for this mission will even sign what kind of hydrogen Ottawa needs.

“Not all hydrogen is created equally and hydrogen is simply as clear because the sources used to generate it,” mentioned Julia Levin, with Environmental Defence.

“So what we’re seeing is pure gasoline and oil firms seeking to fossil fuel-derived hydrogen in a determined try to seek out new markets for his or her merchandise.”

When hydrogen is produced from pure gasoline utilizing a thermal course of, it is described as “gray” and typically presents little to no local weather profit. 

When carbon seize and sequestration know-how is used, the hydrogen is taken into account to be “blue” as emissions are diminished.

“Inexperienced” hydrogen, comprised of water utilizing electrolysis powered by renewable power, presents the best local weather profit.

The ability proposed by ATCO and Suncor could be blue hydrogen, though the businesses name it “clear” hydrogen as a result of 90 per cent of emissions could be captured.

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