An innovative solution to the stalemate in Canada’s energy sector

By Mark Mann

Managing Editor, Research Money

In June, the California Air Resources Board approved the toughest clean air mandate in North America. Designed to help the state reach its greenhouse gas reduction goal of 40% below 1990 levels by 2030, the mandate requires manufacturers of commercial trucks to launch zero-emission options by 2024.

Whether the state with the world’s fifth-largest economy will succeed in phasing out cheap diesel trucks on such an ambitious timeline, this is just more writing on the wall for traditional fossil fuels. The ever-increasing legal difficulties for pipeline builders underscore the point, as evidenced by further delays on the Dakota Access Pipeline and the Keystone XL oil pipeline, as well as the cancellation of the Atlantic Coast Pipeline.

Of course, oil and gas still exert massive influence. New research by the University of Alberta’s Parkland Institute shows that the province’s post-secondary institutions are prioritizing research that will attract funding from the fossil fuel industry, to the neglect of other promising and important industries. Thankfully, the old zero-sum competition between environmentalists and the oil and gas sector — not to mention Liberals and Conservatives — is starting to look like it could become a thing of the past, at least when it comes to building a net-zero emission economy.

As R$ correspondent Mark Lowey has reported, momentum is growing rapidly to build a clean hydrogen economy in Canada, providing a “transition pathway” for the fossil fuel industry to start producing “blue hydrogen” by upgrading natural gas, while capturing and storing the carbon. Alberta’s Industrial Heartland in the Greater Edmonton area stands to join the vanguard of early adopters of zero-emission hydrogen fuel technology for heavy-duty freight transportation, alongside huge potential markets like California.

The last few weeks have offered more signals that funders and investors are optimistic about hydrogen. Among the 20 projects to recently receive funding from Emissions Reduction Alberta (ERA) through its Natural Gas Challenge, three are focused on aspects of hydrogen blending and production. Together, they were awarded more than $10 million.

The good news for hydrogen — and by extension, the natural gas industry — keeps adding up around the world: $70 million in hydrogen funding by the Australian Renewable Energy Agency (ARENA), and $64 million for 13 projects through the US Department of Energy’s Energy Efficiency and Renewable Energy Office’s (EERE’s) Hydrogen and Fuel Cell Technologies Office.

We are still in the very nascent stages of building the sort of infrastructure that would enable a full-fledged hydrogen economy, but once upon a time not so long ago, oil sands development was an innovative dream with a massive price tag.

Later this summer, we will see the first comprehensive national strategy on hydrogen in Canada, commissioned by NRCan. Alberta’s own hydrogen strategy is expected this month. A report on critical R&D gaps in the hydrogen value chain is also forthcoming. Canada’s innovators should watch closely: a market is being born, and Canadian industry is poised to help guide its first steps.