Discussing the city utility division's five-year outlook, director Brad Maynes, left, said a potential carbon capture project is moving forward. The committee meeting on Thursday afternoon also heard the so-called "energy transition" will require action on a number of fronts.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
Medicine Hat has made an official request to participate in creation of carbon capture hubs throughout Alberta, council’s utility and infrastructure committee heard Thursday.
City administrators say formal participation will be laid out next month after the Alberta government unveils an awaited hydrogen production strategy.
First announced in August, the city utility and Invest MH office would lead an effort to sequester carbon and attract hydrogen production – which can require CO2 capture and storage – to the city.
The statement was part of an overview of utility and energy division operations, including a laundry list of potential changes which the Gas City’s utility department may have to grapple with over the next five to seven years.
“We’ve never seen the pace of change that we’re seeing today,” said Brad Maynes, director of the division, specifically of interest in hydrogen. Production of the non-emitting fuel can require carbon capture, but Maynes later added that increased carbon pricing would hit utility users and hurt existing industry and new industrial investment.
“Rules can change and they will,” he said. “It will be our job to do everything to mitigate that effect on our utility, industry and homeowners.”
The city’s “hydrogen hub” strategy group includes Methanex and CF Industries interests in the city, along with the AECO gas storage hub at CFB Suffield and other businesses and government agencies.
Committee chair Phil Turnbull says all industry will seek to lower costs and Medicine Hat should be able to offer large customers renewable energy, if that leads to lower carbon tax exposure.
“It’s not fairy tales and rainbows, as some people have put it – it’s the future,” said. “We need to be at the starting line.”
Outgoing council committee member Jamie McIntosh says the report outlines new stability in the division, especially in petroleum production.
“I’ve seen such a transformation from eight years ago and our oil and gas challenges to today, which is such a monumental step forward,” he said. “People really don’t realize how much things have changed.”
From about 4,500 wells in 2015, when Maynes was hired, the city will have 800 operating wells by the end of the year, mostly in the city’s Northwest Field. That is after divestitures, and from 100 employees six years ago there are now only 20 in the department.
Maynes said even as natural gas prices hover at $5 in current market, the “vast majority” of the closed wells would be “marginally economic” at that price.
In power, the Unit 17 generation unit will come online next year when Maynes believes grid prices will be high due to the lost production of retiring coal plants.
The next generator, said Maynes, could be a solar field or duel fuel hydrogen-gas turbine, depending on a number of factors.
Once economical, he said, hydrogen could also be blended into home heating fuel.
A major challenge however, will be a need to upgrade the city’s power distribution grid to accommodate electric vehicle charging.
