Alberta must accelerate its pace to win the global race for hydrogen
March 1, 2023
By Malcolm Bruce
Malcolm Bruce is the CEO of Edmonton Global and a contributor to the Business Council of Alberta. This column is part of a discussion paper series by the business council called Missions and Moonshots, which explores how Alberta can reach its full potential in three key areas of the economy: food, health and energy.
In February, eyes around Canada were on Alberta as the epicentre for one of the most critical discussions for our nation’s energy future, at the 2023 Hydrogen Summit in Edmonton.
There is no greater time than now for Alberta to seize the almost unparalleled opportunity at our fingertips: to lead the pack on hydrogen development — if we act quickly.
While most of our economy could transition to electricity, around 30 percent of Canada’s energy consumption will be challenging to electrify. Hydrogen would be ideal for: refining oil; producing petrochemicals and fertilizers; as fuel for long-haul trucking, heavy machinery, and buses; and in high-heat manufacturing of glass, concrete, and steel.
Globally, this represents an $11 trillion to $12 trillion market by 2050. The stakes are massive. But so is the opportunity.
Many countries recognize hydrogen’s transformative potential and are incorporating it into their economic and energy strategies. Japan, South Korea, China, Germany, and California are already reaching out to Canada as a potential source of hydrogen.
Alberta is at the forefront of Canada’s hydrogen sector, already producing two-thirds of Canada’s hydrogen and scaling rapidly. Companies are choosing Alberta as the place to produce hydrogen because of the province’s competitive advantages, including an abundant supply of low-cost natural gas, existing carbon capture and storage infrastructure, and a knowledgeable workforce.
Air Products, for example, is investing $1.6 billion to build the world’s largest net-zero hydrogen energy complex, an innovative facility set to come on stream next year. Another example is ATCO, an early leader in Alberta’s hydrogen production, which in 2020 launched its project to deliver a blend of natural gas containing five percent by volume to homes and businesses in Fort Saskatchewan near Edmonton.
Alberta’s opportunity extends far beyond the production of hydrogen itself. We are the centre of Western Canada’s energy supply chain, with many companies poised to play a significant role not only in hydrogen production but also in its transportation and use.
For example, the Edmonton International Airport is exploring the use of hydrogen across airport operations, from ground service fleets to aircraft. And Canadian Pacific launched and expanded its Hydrogen Locomotive Program, which will see the world’s first hydrogen locomotive technologies.
Alberta is also beginning to attract advanced manufacturing companies, technology and AI startups, and the financial, venture capital and fintech sectors, all looking to be part of this emerging hydrogen economy.
Not only is the province creating an environment where ideas and technologies, such as hydrogen, can be tested, iterated and built out at scale, but it is, at the same time, generating significant economic impact and jobs for Albertans.
Investments in infrastructure needed
To truly take advantage of this opportunity, we need to invest in our infrastructure — including hydrogen pipelines and carbon sequestration.
Alberta is one of the world’s lowest-cost producers of clean hydrogen, perhaps second only to Russia, and there are clear reasons we may be a preferable supplier. Getting this product to domestic users — and to international markets — ultimately requires scalable transportation systems like pipelines, and Alberta’s pipeline infrastructure and expertise in pipeline technologies are unmatched. However, unlocking this resource by transporting hydrogen to international markets will take political will.
We also need to enable cooperation among all orders of government. Both the federal and Alberta governments see hydrogen as a necessary component to achieving our climate goals while being part of a multi-trillion-dollar global economic development opportunity, but there’s more that can and should be done.
Building projects of this scale takes significant time in Canada — a major disadvantage when competing with international jurisdictions that, in some cases, can move very quickly. We must act at a pace that demonstrates our commitment to addressing the climate emergency, signalling how we can be part of the solution. Right now, investors and countries lack faith that Canada can deliver on our hydrogen promise to build the infrastructure needed to get our hydrogen to international markets.
Furthermore, recent incentives put in place by the United States are eroding our competitive advantage. We must set forth a renewed approach to building our hydrogen economy. If we commit to doing this, we will ensure our energy economy thrives for generations to come.
The global race is on to adopt hydrogen technologies, with countries around the world positioning right now to become tomorrow’s hydrogen superpowers.
We need to move aggressively to take advantage of this opportunity for Canada, working with our partners to establish the country and Alberta as world leaders in clean hydrogen.
We must accelerate our pace, collaborate to build infrastructure, ensure our regulatory environment is an enabler, and be bold in placing Alberta and Canada at the forefront of this global energy transition. The time to act is now.