As the race for the US presidency winds down, the strong possibility of Biden US presidency brings a focus on renewables. There seems no doubt that the race to replace hydrocarbons in the US will intensify under Biden. The differentiation of hydrogen from green, blue, and gray sources becomes significant as Biden’s policies have a strong focus on green hydrogen. The Biden plan to build a clean energy future includes using renewables to produce carbon-free hydrogen at a lower cost than hydrogen from shale gas through innovation in technologies like next-generation, less expensive electrolyzers. For the push to “Build Back Better” hydrogen may be the next big thing but should it be sourced without hydrocarbons?
The race to replace hydrocarbons in the US and Europe seems to be dominated by ideologies to eliminate not only hydrocarbons but also transfer the wealth they create for certain nations around the world. But to save the planet, do we truly have to abandon hydrocarbons?
Proponents of hydrogen in North America are increasingly finding affordable technologies to decarbonize hydrocarbons and use them as a source of hydrogen – decarbonizing gray and blue hydrogen. To discuss the advantages of “non- green hydrogen” and the involvement of hydrocarbons, a comparison of the types and sources of hydrogen is useful. We also have to ask why hydrogen has become an important focus as an environmentally friendly fuel and why it is the focus of intense discussion by environment zealots and hydrocarbon champions alike.
Hydrogen is creating a heightened buzz because it does not emit carbon when it’s used as a fuel. It can store energy or provide power to vehicles and homes. It can be transported as a gas or liquid. When hydrogen releases energy, it only leaves behind water vapour. But currently, hydrogen production does release carbon dioxide under traditional methods. That is not stopping the enthusiastic pursuit of hydrogen by the global transportation industry as both startups and established automakers: Nikola, Hyundai, Toyota, and Daimler pursue hydrogen fuel cell technology and are promising to deliver hydrogen-powered semi-trucks.
Looking at the types of hydrogen begins with gray hydrogen, which is derived from hydrocarbons. US petrochemical companies already produce hydrogen as a byproduct in propane processes, in ethane cracking, or while making chlorine but those petrochemical companies are now exploring new revenue possibilities. US Petrochemical companies want to be more involved with the emerging hydrogen market. For example, Westlake Chemical produces a fair amount of gray hydrogen during the ethane cracking process as a byproduct of the ethylene it produces. The cracking process yields a fair amount of gray hydrogen that they currently use as fuel. Westlake also produces smaller volumes of hydrogen when making chlorine. There is increasing interest in using hydrogen at a higher value and not just as fuel in their processes. Albert Chao CEO of Westlake Chemical Corp. said during the second quarter earnings discussion on Aug. 7th, “We are all ears, and we want to enter into the hydrogen economy, and we have a way to supply with today’s production without adding any more capacities.”
The petrochemical process that produces hydrogen as a byproduct of propane is propane dehydrogenation (PDH): something that Albertans may be familiar with if they have followed the plans and construction that is underway for Inter Pipeline’s Heartland Petrochemical Complex -to be completed in 2021. The New Alberta Petrochemicals Incentive, announced Oct 30th, will be an important incentive program, intended to strengthen Alberta’s value proposition for large-scale petrochemical investment with the possibility to increase related hydrogen production. The province is in recently announced talks with a Saudi firm to build another $5-billion petrochemical plant in Alberta.
Looking at PDH in the US for an example- Enterprise Products PDH produces hydrogen at Mont Belvieu Texas. In 2018, Enterprise helped Air Products add 40 million standard cubic feet per day to its Gulf Coast system which provides over 1.4 billion standard cubic feet of hydrogen per day to refinery and petrochemicals customers with 22 Air Products’ hydrogen facilities feeding a 600-mile pipeline and they are ready for an increasing gray hydrogen market.
Turning to the second type of hydrogen- blue hydrogen- it is also produced from fossil fuels but involves some type of carbon capture. Alberta has great opportunities to develop large-scale blue hydrogen projects in Alberta’s Industrial Heartland which is Canada’s largest hydrocarbon processing center. The Industrial Heartland is connected to substantial carbon capture and storage capacity via Wolf Midstream’s Alberta Carbon Trunk Line (ACTL), the largest CO2 pipeline in the world. It was completed in June 2020 and is connected to carbon sequestering and EOR opportunities in the oilfields in central Alberta. ACTL is expected to capture and sequester up to 1.8 megatonnes (Mt) of CO2 each year, the equivalent of taking 339,000 cars off the road, with the long-term potential of up to 15 Mt of CO2 annually. Alberta’s Industrial Heartland Hydrogen Task Force is working on initiatives to harness this resource. In another Alberta blue hydrogen project under development, ATCO Ltd. will receive $2.8 million in provincial funding for a $5.7 million project to be built next year in Alberta that will blend hydrogen into natural gas streams distributed for home heating in Fort Saskatchewan. The plan is to use blue hydrogen, which is derived from natural gas which O&G Execs are saying is currently the cheapest way to generate hydrogen.
The third type of hydrogen and the one that has captured the focus of idealists is green hydrogen. Green hydrogen uses electricity from “zero-carbon” sources of electricity -perhaps a solar power plant or from wind power farms – which is used in electrolysis- running an electric current through water to produce hydrogen. However, it is a misidentification to say that solar power plants and wind power farms are actually zero-carbon sources of electricity. In addition, green hydrogen is expensive to produce. A report by the energy research group Pembina Institute earlier this year noted that blue hydrogen can be produced at a cost of $1.85 per kilogram at the higher end, compared to as much as $5 or more per kilogram for green hydrogen. Other industry insiders say the cost can actually be as high as $20 per kilogram.
EPAC President Tristan Goodman has been quoted as saying, “If you want a hydrogen economy, the main and most efficient place to get that is through natural gas.” He also noted that when blue hydrogen production is combined with a carbon sequestration facility, the fuel source can have zero net emissions.
Green hydrogen has become a buzzword in Europe (and the focus of anti-O&G lobbyists) On July 8th of this year, the European Commission published a report on hydrogen strategy for a climate-neutral Europe for the European Parliament in which they called for a focus on exclusively green hydrogen. Has sourcing exclusively green hydrogen become a “green energy fixation” as anti-oil lobbyists seek a fossil-fuel-free paradise?
Another question comes to mind as we contemplate using freshwater as a source of energy on a worldwide scale. Water in some areas is a limited resource and in fact, we currently have a global water crisis according to Jay Famiglietti, a hydrologist and Senior Water Scientist at the NASA Jet Propulsion Laboratory as quoted in a 2017 interview on the website ideastream.org.
“I think the global water crisis is far worse than most people imagine because it includes both the water quality and water quantity components, and when you put those two together, I’m sorry to say it’s almost an unsolvable problem.” says Famiglietti.
This issue is close to Canadians as we are home to the Great Lakes which make up about 20% of the freshwater supply in volume, in the world. Canadians are familiar with an old idea that never seems to entirely go away- the proposal to pipe Great Lakes water to parched cities in the American Southwest. This concept is being proposed once again by Jay Famiglietti himself who sees large-scale Great Lakes water diversions as a future solution in the same article.
“There’s a giant bullseye that can be seen from space that’s sitting above the Great Lakes: it’s a target-area in a sense for the rest of the country. Because there’s so much freshwater… 50 years from now there might actually be a pipeline that brings water from the Great Lakes to Phoenix.”
There is currently a bi-national agreement that involves the Canadian provinces on the Great Lakes -Ontario and Quebec- and eight US states surrounding the Great Lakes preventing such a diversion project, but the need for water to produce essential energy could disrupt that agreement.
In areas where fresh water is plentiful, societies depend on that plenty to provide the necessities of life- food production for example that is exported to feed areas without the ability to produce adequate food supply. As we contemplate diverting huge amounts of fresh water to satisfy the world’s insatiable thirst for energy, will we be creating water scarcity in some areas? Water itself is a necessity of life. Will this focus by Europe and other countries create global mass production of green hydrogen by electrolysis and will this create water shortages or perhaps divert water away from agriculture and create water insufficiency in areas? Green hydrogen as a global replacement of hydrocarbons has disconnects that threaten to create greater problems. It has the potential to be problematic.
Recently, Pembina Institute deputy executive director Simon Dwyer stated;
“Further research and development will help Canada determine to what extent blue and green hydrogen should be developed as contributing pathways to net-zero emissions as we build a more sustainable economy for Canadians. Hydrogen created from renewable energy or natural gas with carbon capture and storage can play an important role in decarbonizing Canada’s energy systems especially in hard to decarbonize sectors.”
It seems there is real value and a real need for recognition of the positive environmental and economic impact of gray and blue hydrogen in Canada to truly transform the energy sector rather than a narrow and impractical focus on transition off hydrocarbons. Returning to a discussion of some Canadian companies and their notable breakthrough initiatives with hydrogen it’s important to note that ATCO Canada has an important blue-green hydrogen project in Australia. ATCO’s Clean Energy Innovation Hub is a testing bed for hybrid energy solutions and it integrates natural gas, solar PV, battery storage, and hydrogen production. With the support of the Australian Renewable Energy Agency, ATCO is investing $3.3 million in the project. Here in Canada, Air Liquid has installed the world’s largest electrolyzer plant to create hydrogen from water, ready for commercial operation by the end of 2020 located in Becancour, QC.
As always, in discussions of hydrocarbons, energy, and emergent technologies, new Alberta technologies are always at the forefront. This is the case of the breakthrough from one Calgary-based startup Proton Technologies. Grant Strem, Chairman, CEO and co-Founder of Proton says they have found a way to avoid emissions altogether and produce hydrogen at a fraction of the current costs. Proton has patented a method of oxidizing an oil resource and using a palladium alloy filter in the wellbore that traps carbon emissions in place while allowing pure hydrogen to flow to the surface. He sees the challenge of sourcing green hydrogen from freshwater electrolysis as problematic.
“One of the issues with electrolysis globally is you need a source of fresh water and if it comes from a desalinization plant then there’s a hypersaline brine that’s pushed back into the ocean that spreads across the bottom of the sea floor and kills everything that’s not adapted to deal with it. So large scale electrolysis to generate hydrogen must be done realistically, proximal to large sources of freshwater, otherwise, it does cause problems. One of the benefits of our HEE process is that we can use any type of water and most of the hydrogen that we collect from our process comes from saline non-potable water that’s already in an oil field formation. “
Dr. Ian Gates, professor of chemical and petroleum engineering at the University of Calgary is also a co-founder of Proton Technologies describes the Hygienic Earth Energy process or HEE as converting the oil and the water in the reservoir to hydrogen – leaving the carbon dioxides in the ground and only producing hydrogen to the surface. He says the process produces a clean energy source from hydrocarbon reservoirs and can change the entire basis for energy around the globe.
“If you can have a clean source of hydrogen from any petroleum reservoir, then many petroleum reservoirs could now produce hydrogen for the world. That means that this issue of carbon dioxide emissions from transportation fuels, from the burning of (hydrocarbon) fuels, vanishes.“
According to Dr. Gates, HEE is also immensely affordable because it will produce hydrogen from existing petroleum systems. For example, he says that for countries that have huge coal reserves and cannot afford an investment in other sources of energy, this may be a way to get the energy out of coal with no carbon dioxide to the surface and no sulphur or other pollutants to the surface – just pure hydrogen. He says this process is equally safe for oil and heavy oil as well. According to Dr. Gates…
“On a planetary scale, we have immense amounts of these (hydrocarbon resources) but now they can be clean if we produce them as hydrogen. In my view, adding value with HEE is saving money and making money as well as saving lives and saving the environment. I’m quite driven to pursue this process, especially when you think about what future generations need with respect to a clean climate and clean water.”
When you consider the urgent need globally for affordable energy, Proton Technologies’ HEE process may be the affordability breakthrough needed to produce our abundant hydrocarbon energy resources without the carbon dioxide burden or abuse of water resources.
Maureen McCall is an energy professional who writes on issues affecting the energy industry.