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An explosive report on one of the largest carbon capture and storage facilities in Alberta is challenging the wisdom of Canada’s hydrogen strategy.
The Quest carbon capture and storage (CCS) facility operated by Shell near Edmonton is emitting more greenhouse gases than it captures, according to a report published last week by international NGO Global Witness.
The carbon capture system used at Quest is a prime example of the type of innovation Canada is banking on to curb emissions from the hydrogen sector. Because the vast majority of hydrogen produced today is made from methane, the federal government is interested in expanding carbon capture technology to cut emissions. The findings from Global Witness are calling into question this strategy and Canada's future energy plans.
“The problem is (Ottawa is) basing the hydrogen strategy off speculative technology that the Quest project shows us doesn't work,” said Julia Levin, senior program manager for climate and energy at advocacy group Environmental Defence.
“It's not even a risky gamble, it's just the wrong choice.”
Canada is a top 10 global producer of hydrogen, but the vast majority is produced using methane (natural gas), making it a contributor to global warming.
In late 2020, Natural Resources Canada (NRCan) published its hydrogen strategy, showing it intends to grow the country’s hydrogen sector by betting big on carbon capture technology. The plan attempts to strike a balance between the oil and gas industry’s desire to find new revenue streams for its gasfields and Canada’s obligation to slash emissions under the Paris Agreement. As Canada’s National Observer has previously reported, the federal government is looking to include Big Oil in its hydrogen plans.
However, the Global Witness report indicates the technology needed to do this doesn’t always work as promised, throwing the strategy into question. The Quest CCS facility, completed in 2015, produces hydrogen to help refine bitumen at the oil major’s Scotford complex.
Shell reports the Quest plant captured 48 per cent of the facility’s emissions, preventing about five million tonnes of carbon dioxide from reaching the atmosphere. That rate is far below the 90 per cent capture rate industry lobbyists regularly tout.
However, Global Witness crunched the numbers on the project’s overall emissions, taking into account the methane pollution from extracting and transporting natural gas that Shell doesn’t report, and found the plant coughed more than 7.5 million tonnes of greenhouse gases into the atmosphere, rendering it a net-emitter. When the project’s full supply chain is factored in, Global Witness estimates the amount of carbon captured drops from 48 per cent to about 39 per cent.
Shell rejects the report’s findings.
“We disagree with the report’s conclusions and any analysis that suggests Quest is not reducing CO2 emissions is simply wrong,” said Shell spokesperson Stephen Doolan in a statement to Canada’s National Observer.
“Quest remains one of the most successful CCS projects in the world and we look forward to scaling and sharing this technology as we transition to becoming a net-zero energy business by 2050, or sooner, in step with society.”
Levin said the future of Canada’s hydrogen production will make use of either carbon capture or renewable energy because there is a well-understood recognition that hydrogen produced with unabated methane is a “carbon bomb.” She said there could be some specific uses for renewable hydrogen in sectors like steel making, but hydrogen made with fossil fuels should be rejected whole cloth.
“Fossil-derived hydrogen is just dressing up a fossil fuel as something new when it's not,” she said. “This is absolutely about oil and gas companies scrambling as the energy transition happens … and (instead) lobbying heavily for a false solution that will allow them to maintain their business as usual.”
NDP environment critic Laurel Collins said using public money to subsidize carbon capture plans, and ultimately ending up with increased emissions, is the opposite of climate leadership.
“The Liberal government has a track record of putting the interests of big corporations, and specifically the oil and gas companies, over the interests of communities and people across Canada who want to see the government take bold climate leadership,” she said.
“Profitable oil and gas companies do not need subsidies from the taxpayer to do what they should be doing already,” she added.
The Quest facility reportedly cost over US$1 billion to build, with at least US$654 million coming from government subsidies. It's part of Shell's Scotford complex, which ranks among Canada's top emitters.
A 2019 study from the International Energy Agency looking at Shell’s carbon capture system in Alberta found that using carbon capture in heavy oil processing plants is “not yet economic without considerable support in the form of government or external funding.”
In other words, carbon capture isn’t economic in the oil and gas industry without being propped up by government.
“As a means to address Canada’s obligations under the Paris Agreement, this is a poor use of taxpayer dollars,” the Global Witness report finds.
Still, both the federal and Alberta governments are betting big on carbon capture and eyeing Edmonton as a hub for hydrogen. One example is a deal with Air Products Canada, which is currently building a $1.3-billion carbon capture and hydrogen production complex it expects to be operational by 2024. In June, the federal and Alberta governments said they’d signed a memorandum of understanding with Air Products Canada to support the buildout. Ottawa is also investing over $60 million in a carbon trunk line to connect Alberta’s oilsands operations to a hub outside Edmonton.
The federal government is currently funding at least 16 separate carbon capture projects across the country.
NRCan declined an interview and did not return a request for comment by deadline.
Comments
"Hydrogen is the energy of the future, and it always will be." Hydrogen does have some unique advantages, but it has more unique liabilities. Forgetting the latter is drawing us into another boondoggle, wasting precious time to go sustainable. As usual, it makes money, but not sense.
John, can you call up, and dig into, the claims by Proton Technologies in Alberta?
Their claims are pretty extreme, that they can produce hydrogen, out of abandoned hydrocarbon wells, leave all the carbon down-hole, and sell hydrogen for low prices that would change the whole picture.
Or, they're a stock scam with nothing tangible.
I wouldn't assume the latter, save that they've been quietly advertising this capability for a couple of years, yet haven't exploded to take over the hydrogen world. Their economics - under a buck per kilogram of hydrogen - should have made them a famous Wall St. darling by now, if it were on the level.
But their web site says they're selling product, to interested early adopters, not just making claims and selling stock, so I don't know what to think.
Journalist needed here!
"A 2019 study from the International Energy Agency looking at Shell’s carbon capture system in Alberta found that using carbon capture in heavy oil processing plants is 'not yet economic without considerable support in the form of government or external funding.'
"In other words, carbon capture isn’t economic in the oil and gas industry without being propped up by government."
Emissions reduction (whether by carbon capture or other means), pollution controls, industry clean-up, and reclamation are not supposed to be economic. I.e., profitable money-making ventures. These are all standard costs of doing business. Just like capital costs, labor, maintenance, repair, licences, office supplies. Regular operational expenses all businesses are responsible for. The price companies charge for their products reflects the costs of doing business plus profit margin.
If I am not paying for Shell's pencils and paper, why am I paying for their carbon capture?
Hypothetical example: When my construction business takes a load to the dump, the company pays the cost. We do not expect the govt or taxpayers to pay. Those costs are recovered from my customers.
Until now fossil fuel producers and consumers have been using the sky as a free dump. Downloading the costs to the public purse, the environment, and future generations. Voodoo economics. Market failure. Carbon pricing aims to put a stop to that unethical practice.
Simply put a realistic price on carbon. Then it's up to fossil fuel producers and consumers to figure out how they want to respond. If carbon capture and storage makes economic sense (i.e., is cheaper than paying the carbon tax), that's what companies will do.
If the carbon price for heavy emitters is too low (which it surely is), increase it. Problem solved.
The federal and provincial governments not only shield heavy emitters from effective carbon costs, but they also subsidize carbon-cutting measures. Undermining the rationale for carbon pricing. Violating the polluter-pay principle. Leaving taxpayers on the hook for costs industry (and consumers) should be paying for.
Ottawa boasts about climate leadership, but sabotages its own carbon pricing policy.
I agree the current policy of deriving hydrogen from fossil fuels is a bad policy. It is likely being done to keep jobs in the fossil fuel industry, but I believe hydrogen has a future and will work, in fact is working on a small scale already.
If you are going to produce hydrogen you need to stipulate it must be done 100% green which is usually electrolysis. Hydrogen comes from water and when it burns it returns to water.
Hydrogen fuel production should be done using solar or wind technique like Saudi Arabia and others or water power. Of note Saudi Arabia is quickly becoming the largest producer of hydrogen in the world where they have setup large solar cell farms to power the electrolysis devices ... ideal in a desert country.
But here in North America we can also link into the numerous small waterfalls, that are out of the way, to do similar. Remember a power station dedicated to hydrogen production is much smaller since it doesn't need to connect to a grid. Toyota and Honda are pioneering hydrogen cars and each has production models you can buy now, which isn't the future but now. The problem there is very few fueling stations.
Obvious advantages to hydrogen are you fill the tank in a few minutes instead of a long charge, and the less apparent advantage is that a hydrogen car is run by an electric engine, but the electricity is produced as you run by the hydrogen. This means no plugin devices in your house which cost thousands and a there would be a significant reduction in the expansion of our electric grid, required by current all electric cars, which would save billions, if not trillions. The Star wrote an article on this a few weeks ago..
The disadvantages are we need to create a production and distribution infrastructure. The big issue there is the fueling tanks for hydrogen are quite expensive since hydrogen is more volatile. Volume may reduce the cost of the fueling stations. The cost of hydrogen is quite high though the mileage is better. The research I have read seems to indicate the price of hydrogen fuel will be comparable to gas by 2030. In my opinion we can make the price much less in large volumes.
In addition hydrogen doesn't require large lithium batteries which have disposal and sourcing issues. There is quickly evolving a shortage of lithium. I grant that companies like Toyota are working on better batteries so maybe that method will work, but long term the current electric cars we are using will see an end of life.
Initially I see hydrogen converting the airline industry, buses and large trucks, as in Germany to green with cars and industry coming in later. Overall I see hydrogen as the best long term solution. That technology has been around a long time. I learned about electrolysis in the 60's when I was in high school.
Of note there is another type of hydrogen car where there is a device in the car which is plugged into an electric source similar to an electric car charger. In about 6 minutes it will produce enough hydrogen to run a car over 450 km. This is neat but does require an expansion of the electric grid like current electric cars but doesn't require a hydrogen fueling station or any trucking infrastructure. Currently these are very expensive. Also it is difficult to find more information about them. I see both types as useful.
Hopefully someone will put a lid on another Kenny project.
This is very complicated so a few paragraphs doesn't cut it. We must count on the scientists to figure it out and good entrepreneurs to make it happen.
Thank you
You're talking like hydrogen transports itself magically. Electrons transport much more easily than hydrogen gas. The pipeline networks, trucking and so on required for transporting hydrogen would be much more expensive than the expansion of our electric grid you're so upset about. And yet it would not go the last mile to your home so you wouldn't have a home plugin but instead have to go back to gas stations. Incidentally, I didn't bother spending thousands for a special plugin for my Leaf; I'm just using 120 volt household current. It charges very slowly, but it doesn't matter; I plug it in when I get home and it's full the next morning. The only time to use real chargers is on a road trip. My experience with a road trip is that you drive until you want to grab a coffee and snack or lunch or whatever, plug it into a charger, and by the time you're finished eating you're ready to go--as long as you didn't have to wait in line for the charger, but that's not a technological issue. If you have to waiti in line it's a pain, but the actual charging is no big deal. And that's with on average fairly wimpy chargers; newer chargers are mostly faster, so as they install more the average charge speed will go up.
And the basic problem with hydrogen to power electric cars instead of electricity to power electric cars is, it's inefficient. You're using electricity to turn water into hydrogen + oxygen, then turning the hydrogen + oxygen back into electricity to run a car, with energy loss in both steps plus leaking hydrogen during transport--when you could have just used the electricity to run the car. It's stupid at a very fundamental level. Incidentally, I am INCREDIBLY suspicious of your little device--it is theoretically impossible for an electric charger that produces hydrogen to "charge" your car as fast as an electric charger would just charge your car with electricity, because part of the energy is lost in the "making hydrogen" process.
There are some niches where green hydrogen could come in handy--energy storage at solar farms, for instance. But for land vehicle transport it's a ridiculous solution. And of course at present, for practical purposes, it's really just a con by fossil fuel companies, so it's naive to talk about it much out of that context.
"The Quest facility reportedly cost over US$1 billion to build, with at least US$654 million coming from government subsidies."
So, at least 65% subsidized. Why can't I get that level of subsidy to install an electric heat pump to heat my home?