Alberta bullish on hydrogen strategy that relies heavily on carbon capture technology

Province wants to export hydrogen by 2030

The Alberta government wants the province to become a hydrogen powerhouse by 2030, piggybacking on the natural gas industry to export hydrogen.

The Alberta Hydrogen Roadmap, released Friday, depends heavily on the use of carbon capture, utilization and storage (CCUS) in its early stages to reduce greenhouse gas emissions and aim for Canada’s net-zero goals.

The approach also banks on the federal government helping to fund some of the pricey up-front costs of scaling up CCUS, Premier Jason Kenney said in a news conference Friday.

“Hydrogen gives the world an exciting new tool to build a stronger, more reliable low-emission energy future,” Kenney said. “And Alberta is uniquely positioned to become a dominant global player in this burgeoning new technology.”

The report paints a picture of a future where hydrogen is integrated into the province’s electricity and heating systems, fuels the trucking sector and public transit, used in industrial processes, and exported internationally.

Although the strategy cites $30 billion in capital investment by 2030 as a goal, the government made no specific funding commitments. It points to existing policies, such as the province’s lower corporate tax rate, a petrochemical incentives program and loan guarantees for Indigenous-run corporations as carrots to dangle for investors.

Kenney says the plan will be a key driver of economic recovery, create thousands of jobs and position the province to “write a new chapter in Alberta’s rich story as a global energy supplier.”

The report does note the technology to transport hydrogen long distances cheaply and efficiently is still under development.

The strategy lists an annual greenhouse gas emissions reduction of 14 megatonnes per year by 2030 by integrating hydrogen into industrial processes.

In 2019, Alberta emitted nearly 276 megatonnes of greenhouse gases, half of which came from oil and gas.

The report says Alberta would have to rely at first on more emissions-intensive processes of hydrogen production, using natural gas. In time, it could generate more so-called “green” hydrogen using renewable energy to split water molecules.

‘Green’ hydrogen challenges

Some environmentalists are skeptical of hydrogen produced from natural gas, which is called blue or grey hydrogen, depending how it’s made.

Even if the resulting carbon dioxide byproduct is pumped and stored underground, capturing all those emissions is difficult. And the upstream production of the natural gas can be problematic, resulting in leaks of methane, which is a much more potent greenhouse gas than carbon dioxide.

Nina Lothian, Pembina Institute director responsible for fossil fuels, says Alberta’s hydrogen strategy is promising, but should emphasize the methods of production with the lowest emissions intensities.

Developing better technology with lower environmental footprints will require public funding to help offset the business risks, she said.

Lothian said Alberta also needs a more comprehensive climate plan that sets provincial emissions targets and creates more local demand for hydrogen, rather than relying on export markets.

Although hydrogen produced from natural gas is more emissions intensive, University of Alberta mechanical engineering Prof. Amit Kumar says investing in blue hydrogen would bring the province closer to making green hydrogen production viable. Transportation and storage methods can be re-used no matter how the gas is produced, he said.

For now, the production costs of green hydrogen are much higher than using natural gas, he said.

NDP energy critic Kathleen Ganley said the United Conservative Party government was sluggish to embrace hydrogen, and that could have already sent investors looking elsewhere.