Oilsands producer Suncor Energy Inc. is partnering with utility ATCO Ltd. on a "multibillion-dollar’project to produce more than 300,000 tons of hydrogen per year.
The Calgary-based companies say the project will help Canada reach its 2050 target of net-zero greenhouse gas emissions – and aid their own GHG reduction goals – by capturing and storing more than 90% of the carbon dioxide produced from energy required to make the hydrogen.
The project would reduce Alberta’s CO2 emissions by more than two million tons per year, they said. “That’s actually one of the joys of this is that by combining the potential demand on the natural gas system with demand that we have for our refinery in Edmonton, we can actually build at world-scale,” said Suncor CEO Mark Little.
“At 300,000 tons a year of hydrogen, this is a world-scale project … I do think ultimately Canada’s actually going to be a big player in clean hydrogen globally and I think this is the first big step forward.”
There’s no capital cost estimate yet for the project but Atco chair and CEO Nancy Southern said in the joint interview with Little it will certainly be a “multibillion-dollar” facility.
The project as presented is a “positive” step by industry but it’s difficult to weigh its benefit against other choices with the available information, said Chris Severson-Baker, Alberta regional director for the Pembina Institute environmental think tank.
“We really need to find ways to reduce the emissions in a significant way on an absolute basis from oil and gas and that will either happen through carbon capture and storage like this kind of project or simply reduced production, which is inevitable if the world continues to go down this track of substituting other forms of energy for transportation fuels,” he said.
Suncor is to build and operate the hydrogen production and carbon dioxide sequestration facilities and Atco would construct and operate the associated pipeline and hydrogen storage facilities.
About 65% of the hydrogen would be used by Suncor in refining processes and cogeneration of steam and electricity, reducing emissions by up to 60 per cent at its Edmonton refinery.
Another 20% would be added to the provincial natural gas grid to reduce emissions from uses such as home and business heating. The rest will be sold to various users.
“We think there’s going to be tremendous demand from transportation, the agriculture fertilizer industry, large heavy-haul trucking,” said Southern.
“We see that there’s going to be significant demand for the additional excess 15% of the hydrogen.”
ATCO announced a CAD $6-million pilot project last year to blend about 5% hydrogen into the natural gas stream for utility customers in Fort Saskatchewan, a small city northeast of Edmonton. It was backed by CAD $2.8 million in Alberta provincial grants and is expected begin construction this year.
© 2021 The Canadian Press