Hydrogen happy Hat encouraged by roadmap

By COLLIN GALLANT on November 6, 2021.

cgallant@medicinehatnews.com@CollinGallant

The province will look to develop local hydrogen fuel markets and apply existing grant programs to new private sector plants that produce the clean-burning fuel as part of a “Hydrogen Roadmap” to develop what cabinet officials called Alberta’s next great opportunity.

Premier Jason Kenney and the associate minister of natural gas and electricity, Dale Nally, outlined the long-awaited document in a press conference on Friday.

The report is bullish on the potential economic gain from the sector, outlines and lists actions to encourage production hubs in the province and make it easier for municipalities to explore hydrogen use in vehicles or utility service, but lays out no new funds.

The City of Medicine Hat announced its own plans to study and capitalize on the emerging sector which observers say is a key strategy to reduce carbon emissions and, potentially, is a major economic opportunity.

“We’re very encouraged that the province supports the direction, and they are the type of things that we’d like to explore,” said Eric Van Enk, the interim managing director and Invest MH, the office heading up the economic development work.

“We do believe that there will likely be more funding coming, from either the province or Ottawa … We’re trying to align with the federal and provincial strategies.”

Alberta will update legislation and regulations to allow hydrogen blending with natural gas to increase initial uptake of the fuel. It will also lobby Ottawa to increasingly support carbon capture with tax incentives for the technology, retrofits and investments required to meet environmental obligations and avoid carbon pricing when natural gas is the feedstock. Alberta will also discuss export corridor strategy with British Columbia.

Closest to Medicine Hat, many of the items align with local efforts announced by Invest MH this summer, or in recent utility committee meetings.

Currently, the City of Fort Saskatchewan and Atco are studying blending the fuel into natural gas supplies for home heating.

Similarly, hydrogen could make up a portion of the natural gas used to fuel the city’s electric power plant. Officials in the local utility division said last month any concentration of the clean-burning fuel would reduce the cost of emissions charge under the provincial government’s TIER standard.

They stated shielding customers from increasing carbon tax rates will be a priority for the department going forward.

Invest MH has said the city’s fleet, fuelling stations and general operations could also be employed to create an initial hydrogen marketplace in southeast Alberta.

Partners in the Hydrogen Hub study, which also discusses a potential regional carbon storage hub, include major chemical producers Methanex and CF Industries.

Methane and ammonia are both considered key materials for export that could be used as transport mediums. Both are made up largely of hydrogen that could be split off once at a final export destination.

CF Industries, which this week announced $285 million of carbon-capture upgrades at two U.S. plants, has said its major Medicine facility is a key entry point to the Pacific trade arena.

The local study will be complete in the first quarter of 2022, said Van Enk.

“Ultimately we’re paving the way for a number of actionable items that would be ready right away,” he said, stating there hasn’t been any expenditures

The city has applied for federal grant funding to study the feasibility of a regional carbon-capture facility, and has applied for related geological rights from the province.

In the provincial report, Medicine Hat is listed as one of six potential hydrogen hubs in the province, similar to the layout of potential petrochemical cluster development from a five-year-old diversification program.

The province will also now include hydrogen development in the grant program designed to spur new chemical plants, but would only apply to projects that breakdown natural gas to create hydrogen. Those would require carbon capture and sequestration to ultimately lower the carbon footprint.

That is so-called “blue hydrogen,” while hydrogen produced from separating water with electrolysis with renewable energy is called “green hydrogen.”

“We’re agnostic about the colour,” said Nally.

Kenney reasserted his government’s position that the province’s natural gas reserves will make it a key player in the global trade and a substantial production centre in the short to mid-term.

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