Hydrogen is a key area of growth in the Natural Gas Vision and Strategy plan announced last fall by Associate Minister of Natural Gas, Dale Nally, and a potential private-sector initiative may further expand the industry.
“This is a great example of the type of investment needed for Alberta to realize the economic and environmental potential of the hydrogen economy,” said Nally in an email.
On May 11, Suncor and ATCO announced they are collaborating on early-stage design and engineering for a possible clean-hydrogen project near Fort Saskatchewan at ATCO’s Heartland Energy Centre.
Suncor would be responsible for the construction and operation of the hydrogen production and CO2-sequestration facilities, while ATCO would construct and operate the pipeline and hydrogen-storage facilities.
The project would produce around 300,000 tonnes of clean hydrogen per year, said a press release about the project, and 90 per cent of the emissions from the production process would be captured.
Of the hydrogen produced, around 65 per cent would be used at the Suncor Edmonton Refinery in the refining process. The use of this hydrogen in the refining process has the potential to cut emissions at the refinery down by 60 per cent.
Nally said hydrogen has a strong potential to reduce emissions.
“This is particularly the case in emissions-intense sectors of the economy, such as heavy industrial processes and heavy-duty transportation. We firmly believe that hydrogen will be a major component of a clean, integrated future energy system,” he stated.
The project would also add 20 per cent of the produced hydrogen to the natural-gas grid. It is estimated that CO2 emissions could be reduced by two million tonnes per year. Or as the press released stated, it would be the equivalent of taking 450,000 cars per year off the road.
Alberta has always been a responsible producer of energy products, said Nally. Hydrogen represents an opportunity for Alberta to retain that leadership.
“We have some of the highest environmental, social, and governance standards of all oil-producing regions, and Alberta-based energy companies have been leaders in reducing emissions and addressing environmental challenges,” said Nally.
The project still faces some challenges. ATCO and Suncor are working with the government on regulator certainty and there are questions about fiscal support before the project can move to a sanctioning decision.
“A clean-energy future is a shared national priority, and a transformational project like this one will require extraordinary collaboration with all levels of governments,” said Nancy Southern, chair and CEO at ATCO, in a press release.
The press release stated that investment tax credits for carbon capture and storage are critical to the economic viability of the project.
The companies are also working with the government on carbon-sequestration rights, emissions-reduction compliance credits, and ensuring there are regulations in place to allow hydrogen blending into natural gas.
A sanction decision is expected to be made in 2024. The facility could potentially be operational in 2028.
Nally said they have recently completed consultations on a hydrogen roadmap, which will look at other future possible supports for hydrogen projects across the province.
