Clearing the Air about this author’s views:
Before getting into the technical meat of today’s topic, some in the reading audience might recall or have painted the author (ie. me) as the greenhouse gas denying, Oil & Gas loving, alternative-energy-hating crackpot that has written all sorts of negative things about hydrogen.
To that I say, firstly “thank you for remembering me” – it’s good to have a burgeoning readership – and secondly, please suspend the knee-jerk black and white judgement and consider the qualifications of my statements.
The Canadian Energy Industry has, over the past 100 years, become a world-recognized leader in many fossil fuel technologies and human capital. It took support from government, industry and society at large to get behind this to make it happen. For industry to get on board with something like this and consequently for society to benefit from the jobs, revenues / royalties, it must make true economic sense, and not just government-funded faux economic sense – because one thing that is truly is unsustainable is faux economics. IF GOVERNMENT AND INDUSTRY ARE NOT IN ALIGNMENT, DISASTER (OR AT LEAST FAILURE) WILL ENSUE. Oil and Gas historically met all of the criteria for economic and societal development, growth and universal benefit. To toss that into the wind for one nuevo feel-good idea after another, is a tragedy. In this author’s opinion, while hydrogen development is probably better than a lot of other ideas that have been “invested” in by the Canadian government, it is not the solution nor anywhere near a replacement for fossil fuels; therefore, a misappropriation of funds (IMHO).
Recall bio-energy whether through algae farms or corn-based ethanol and all of your tax dollars spent on that – where did that get us? Higher prices for corn – lol. Recall the solar farm in Medicine Hat, Alberta.
“There was no shortage of fanfare during the opening of the Medicine Hat solar thermal project when it opened in 2014 but there was no brass band playing as crews demolished the project for scrap…”
Even today, as this is being written, Quebec Premier has announced that he’s banning the extraction of fossil fuels, a move applauded by environmental groups (source: https://www.nationalobserver.com/2021/10/19/news/environmental-groups-applaud-quebecs-ban-fossil-fuel-exploration). Of course the more than 6,000 common consumer products made from petroleum have not been banned and for that, Quebec allows Oil or other petroleum products to be shipped up the St Lawrence Seaway (source: https://www.ranken-energy.com/index.php/products-made-from-petroleum/).
So before we all jump on the “down with oil” bandwagon and throw our proverbial eggs in the Hydrogen or Green or … (insert flavor of the month) … basket, we should really think things through.
So, is Hydrogen another Algae Farm in the making or does it have merit? Why, if the author is so anti-hydrogen, is he getting involved in it at all?
Hydrogen has a niche role to play (see my former post in Energy Now Magazine “What Where Why and How Hydrogen”) or send me a request and I’ll gladly email you a copy. Not only does it have a niche role to play, more importantly for this reading audience, that niche can best be served by Western Canada or for that matter, any well-developed Oil & Gas Market connected to population centers. Also, very importantly, the existing Oil and Gas service providers are the best-suited to assist in the new energy niches that are being introduced (in this case “Hydrogen”) because they understand the technical issues, the regulatory issues, as well as the social and financial aspects. Without alignment with these providers, this will be another government boondoggle.
So, in summary, Hydrogen will not be the panacea that its being made out to be BUT it will have a niche role, Western Canada is well positioned to service that niche AND more specifically the existing service providers are best set up to be major players in this new market.
By the way, regarding the label of this author being an “oil and gas loving” crackpot (I prefer the term “enthusiast” but will concede either) – you betcha! Guilty as charged.
Hydrogen Today and Tomorrow
- Hydrogen today is dangerous, cannot be transported or stored safely, doesn’t have industry-wide ready-for-use adoption nor does it have a lot of the technical bugs worked out. It isn’t green in itself and is a terrible fuel to burn. It simply cannot and never will be able to support the literally thousands of associated day-to-day products society relies upon (which will always be the role of oil & gas); Hydrogen will never be the magic energy solution!
- Hydrogen tomorrow will likely be transported in a safer manner, will have more end-users (like functional hydrogen fuel cells) and will have a lot of the technical bugs worked out. It will never be green in itself because hydrogen is not a source of power but rather a mode of energy transfer from another, originating source. There are certain applications however, for which hydrogen lends itself to being very supportive of green energy development. It may have some combustion applications (when some bugs are worked out; primarily the very high NOx emissions) but will more likely find its best application as feedstock to fuel cells. It will most likely play a small role in the energy mix / solution.
Note: Japanese firms and even GE have glommed on to the challenge/niche vis-à-vis hydrogen combustion and high NOx associated with this process and they’ve been making great progress. So, while this author sees fuel cells as the primary winning niche for hydrogen, power gen may also come into the mix (one of many sources: https://www.ge.com/gas-power/future-of-energy/hydrogen-fueled-gas-turbines)
Whether the hype settles down and reality kicks in or not, my role as the rep for one of many energy service providers in Western Canada , is to simply provide energy systems solutions for clients.
Well, hydrogen development fits the bill so personal misgivings about hydrogen’s oversell aside, I need to get involved. In fact, I would argue that someone with a skeptical slant like mine would be best-suited to tackle the challenge of hydrogen development for practical usage because I have an entire agenda of practical issues I see as necessary to overcome before hydrogen can truly play a role as a valid member in the energy arsenal.
To this end, I’ve paired up with Acero’s Lead Process Engineer and Alberta H2’s President (Richard Enns: yes one person, two roles) to ensure that our Hydrogen endeavor is founded on the hard science by Richard and proven to be sound by withstanding my constant attempts to find cracks in the concepts. In fact, I’ve become the lab assistant / handyman for Alberta H2’s offsite hydrogen generation and test facility.
…back to the topic…
The Main Course – Hydrogen on a Silver Platter:
The above preamble was important, not only to clear the air about my role, but also to help to discern this paper from all of the bandwagon rah rah rahing going on about hydrogen.
Hydrogen’s role in the future is not a slam dunk and we’d be foolish to put all of our eggs in this one basket, especially with the abundance of fossil fuels surrounding us however, as it so happens, Canada’s energy infrastructure and technical understanding of energy (in multiple forms) sets us up as a potential top tier for hydrogen conversion, transport, and utilization.
How / why?
The primary forms of hydrogen generation are “Electrolysis” and “Steam Methane Reforming” (and if you want to add, “Auto Reforming”). Steam Methane Reforming (SMR) and Auto Reforming (AR), utilize steam, methane, heat and pressure to generate hydrogen.
Steam Methane Reforming
As it so happens, Canada has ample steam, methane, heat and pressure and it has these conveniently situated underground in many instances – like at many of the heavy oil SAGD facilities for example. The added bonus of being underground affords the opportunity to leave the carbon footprint largely or fully underground. Proton Technologies in Saskatchewan for example, is today, applying this technique. Other locations in Western Canada probably are taking advantage of already-spent infrastructure costs as well, or soon will be, because it is a natural transition for some of these former Oil and Gas facilities and this takes advantage of the very extensive sunk costs.
It is important to highlight, that without the ability to readily deal with the CO2 that is generated during the SMR (and/or AR) process, this solution is in fact, not a solution at all (if the goal is to provide low carbon energy).
In fact, through the SMR process, per 1 million standard cubic feet of hydrogen generated, 13 metric tonnes of CO2 are generated. (source: https://www.forbes.com/sites/rrapier/2020/06/06/estimating-the-carbon-footprint-of-hydrogen-production/?sh=25d326ba24bd).
Even classic “Electrolysis”, when delved into further, is very well suited to the Western Canadian environment. Electrolysis requires:
- an energy source
- water (typically “fresh water” has been preferred)
As it happens, most of the existing wellsites in Western Canada have water and natural gas (or associated gas) and a cleared, typically leveled area of land no less than 100m x 100m (and often more).
More specifically, there are over 100,000 operating wells today and approximately 100,000 “zombie” wells (neither active nor capped) in Western Canada. The “zombie” wells especially, pose a problem vis-à-vis exposure of oil or gas to the surface and to the atmosphere.
(Zombie wells source: https://www.nytimes.com/2020/10/30/climate/oil-wells-leak-canada.html.)
Combine the above with the ever-tightening environmental constraints in Canada – to the point where many of these facilities are simply being discontinued or abandoned before their natural economic due dates – and we’ve got…
… an opportunity.
Yes, ‘from adversity comes greatness’ or at least an opportunity – lol.
In Western Canada, the stars have aligned (for better or for worse) such that the dilemma being faced by energy providers is:
Shutdown the facility (and pay a hefty discontinuation expense)
Find a way to generate energy with a low carbon footprint.
So what is the opportunity?
Western Canada has approximately a trillion dollars in sunk costs in wellsites, pipelines and infrastructure that are operating today. Since we can’t take advantage of the abandoned, historical assets, let’s just focus on the existing assets, including, those that are in what’s called, the “zombie” status. There are approximately 200,000 wells in operation in Western Canada today and about half are in zombie status.
The sunk costs for all these wells include the capital spent to search for hydrocarbon zones and then drill wells, provide roads and electrical grid to those wells, clear the sites and add equipment; most of which can still be utilized or taken advantage of to this day.
Source for drill & complete well costs: (https://www.dailyoilbulletin.com/article/2017/6/15/predicted-costs-drilling-and-completing-well-cardi/) – this article identifies an average well drill and complete cost of around $2.5 million per well.
If we add to the cost of well drilling and completion, the costs for facility and pipeline equipment design & installation, infrastructure development (power and roads)… estimating another $1 million in associated facility and pipeline costs per well (very rough estimate) plus another say $1 million for roads and power… 4.5 million x 200,000 = 900 billion. While this is a very high level ballpark figure, the costs that have been expended are clearly significant!
If we were to compare the practical hurdles to hydrogen deployment from either SMR sites or Electrolysis sites, in Canada versus other typical green-focused nations (think Europe), Canada has a distinct advantage. Our locations to practically generate hydrogen already exist and in many cases, the manner in which the hydrogen can be transported also exists. This could include any combination of the following:
- utilizing an already-existing power grid to a site so that the incoming power (from a green power source like wind or solar) is used to electrolyze water at that site and generate hydrogen
- using existing pipeline infrastructure to ship either pure or blended (with natural gas) hydrogen
- using existing formations and salt caverns to store vast volumes of hydrogen (in the same manner that natural gas is being stored today)
- setting up solar panels and / or wind turbines on an existing wellsite / facility and generating hydrogen (via electrolysis) and sending it down the pipelines that already exist from that facility OR
- using the compression capabilities at facilities to compress hydrogen, then (if no pipelines exist) store it in shipping tube bundles and trucking it out (this would require a more developed market, but this should come over time – especially if hydrogen fueling stations become something of the norm)
- using geothermal gradients to create power and then hydrogen directly from “hot” wells. Little known fact, Western Canada (Whitecourt area in particular) has some very promising geothermal zones with many wells that have already been drilled and completed in those zones (source – Terrapin Report: https://nadc.ca/media/17718/town-of-whitecourt.pdf
- Additional Complimentary Upsides:There are a number of complimentary upsides related to harnessing the opportunities around the existing infrastructure of Oil & Gas facilities in a low carbon era. Some of the associated complimentary upsides include:
- Lithium and other rare mineral extraction schemes from existing wellsites (especially where water is already being taken to surface for electrolysis usage)
- Water treatment using electrolysis
- Off-peak power storage / on-peak power usageThese other opportunities and/or the topics presented above can be explored more intimately in future write-up or if you prefer, simply contact Acero Engineering Inc. or its sister company Alberta H2 for more details or to support you with some technical advice / services. Chats and even technical submissions are free!
Execution – Putting It All Together:
So we have the resource, we have the infrastructure already half-solved (with the aforementioned sunk costs), we have the financial (to some extent) and human capital. The regulatory framework (like methane emission limits and carbon taxes / fees) is still a bit in flux, but starting to take shape.
How to execute?
For producers, I would suggest that they contact their engineering service providers such as Acero Engineering Inc. (shameless plug) as those are the people that have been intimately involved in dealing with the issues of energy transfer, carbon capture, emissions, etc. as part of their daily bread and butter service offering.
For more specific, technical support related to Hydrogen generation, I would suggest contacting companies like Alberta H2 whose sole focus is “all things hydrogen” (shameless plug #2).
For entrepreneurs, I would suggest tapping into the frenzy around everything hydrogen right now, but also, recruit as part of your team, an engineering service provider such as Alberta H2 or Acero Engineering Inc. (shameless plug #3) to help navigate the technical complexity of the undertaking.
Note: Alberta H2, with support from Acero Engineering, has been experimenting on a dynamic application of the Hoffman Apparatus where the electrolyte is circulating. This lends itself to some of the above and other upsides (too secret to mention here, yet – lol).
In addition to this, Alberta H2 has been investigating alternate electrodes and/or the manner in which electrodes are currently being employed – as this is a high-cost component to many electrolysis units.
As well, Alberta H2 has been looking at ways to package mini-hydrogen capture units in order to take advantage of the many systems that currently exist in which hydrogen is simply being vented to atmosphere.
For more info on any of these ideas, please contact Alberta H2 president, Richard Enns or Acero Engineering CEO, Mark Kuppe.
Thank you for reading.