Alberta hoping to tap into promising future of hydrogen energy

EDMONTON — The Alberta government says it is getting out of the natural gas industry’s way via a new plan to bolster the sector.

Officials launched on Tuesday what they called the “natural gas vision and strategy,” which aims to see Alberta export hydrogen globally by 2040, become one of the world’s 10 largest petrochemical producers, and tap into the Asian and European markets with liquefied natural gas (LNG) projects within 10 years.

With stores of about 300 years of natural gas at current usage rates, Associate Minister of Natural Gas and Electricity Dale Nally said the plan will leave Alberta positioned as “a post-pandemic powerhouse for responsible energy production.”

The announcement was made at ATCO’s heavy equipment repair depot and natural gas site in southeast Edmonton Tuesday afternoon.

Next year, the company will build a site in Fort Saskatchewan to blend clean-burning hydrogen into its natural gas distribution system, effectively “decarbonizing heat,” CEO Nancy Southern said.

Hydrogen can be extracted from water, fossil fuels and biomass, or a combination of the two. According to the International Energy Agency, natural gas constitutes 75 per cent of 70 million tonnes of hydrogen produced around the world annually.  

The Hydrogen Council estimates hydrogen as an energy source has the potential to become a $2.5-trillion industry by 2050.

“For decades, hydrogen has been widely touted as the fuel of the future, and for some, it’s an energy panacea. For others, it’s just a pipedream – no pun intended, my pipeliners,” she joked at Tuesday’s announcement.

“But there is no doubt that hydrogen as a complementary byproduct of natural gas has a powerful role to play in the world’s future.”

The province’s plan also includes natural gas refiners converting natural gas into hydrogen, storing the resulting carbon emissions to be used for other purposes.

According to government data, Alberta already produces 66 per cent of natural gas in Canada. Just under half is consumed in the province: 17 per cent by residential and commercial customers, and 83 per cent by industrial, transportation, oil sands and electric power-generation and other industries.

Premier Jason Kenney said much of the strategy follows recommendations made by an advisory council, who reported to the NDP government in 2018 that the natural gas sector had “felt like the orphan child” while oil sands dominated energy discussions, in the premier’s words.  

“A lot of this is just government getting out of the way. Speeding up approvals, creating investor certainty,” he commented.

In addition to the focus on hydrogen, the strategy counts on capitalizing on $30 billion worth of growth in the petrochemical sector by 2030, an expected increase in global demand for natural gas by 36 per cent by 2040, creating a “circular economy” in the plastics and recycling industries, and an increased consumption of natural gas by the oil sands.

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