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Opinion: Edmonton region poised to capitalize on the hydrogen economy

A hydrogen manufacturing unit at the Scotford Shell site, near Fort Saskatchewan. File photo PHOTO BY RICK MACWILLIAM/Postmedia

On Wednesday, April 14, the Edmonton Region Hydrogen Hub was launched, backed by over $2 million in funding from three orders of government. This is an exciting first step in the establishment of Canada’s first hydrogen hub. As the economic development organization for the Edmonton Metropolitan Region, Edmonton Global welcomes the news of this launch, are extremely proud to partner in its activities, and are excited to see the impacts that this will have on the acceleration of the hydrogen economy for our region and beyond.

The global race to export hydrogen is on and right now we have some advantages, but we can’t assume that these will last forever. That’s why we’re encouraged by this launch. We are coming together as a region to take a proactive and strategic approach to capitalize on this opportunity and move aggressively forward.

We know that for Canada and the world to meet our climate and greenhouse gas reduction targets, hydrogen must be part of the solution. And it must be produced in ways that dramatically reduce the carbon intensity. This is where our region has a significant and global advantage. We have the technologies, talent, and abundance ofnatural gas combined with proven carbon capture and storage that allows us to produce near-zero emissions hydrogen and we’re one of the lowest-cost producers in the world. A global hydrogen economy will flourish once there is adequate demand matched with an abundance of low-cost and low-emissions hydrogen — simply put, the economics need to work and right now, the Edmonton region has what’s needed to check all the right boxes.

The economic benefits that the hydrogen economy could bring to our region are truly transformative. Make no mistake, the opportunity is massive — Canadian hydrogen has a national and international wholesale market of up to $100 billion a year.

Even beyond the production and export of hydrogen and the creation of good quality, clean energy jobs, the hydrogen economy will bring significant opportunities to our region. The establishment of a hub can and will attract OEM and energy tech companies to the region — and more. The economic spin-off potential can’t be overstated. From tech start-ups to fuel cells, service companies to innovation labs, power generation to the infrastructure needed to export, and the finance and capital markets needed to bankroll these projects — it’s critical that we are paying attention to the bigger picture to ensure that we capitalize on all aspects of this opportunity. If the hydrogen economy will eventually result in hundreds of billions of immediate and spin-off benefits, we want as much of that as is possible, to be centred right here in the Edmonton metropolitan region.

When we look at how the oil and gas sector played out in our region, we can learn a few things. While significant investments were made into our region, we failed to capture a lot of the value-added benefits of this industry. This time around, it’s critical that we embrace a bold vision — one that would realize the radical transformation of our regional economy.

We must anchor this opportunity within a long-term plan to support economic development and investment attraction across our regional economy. That’s why the Edmonton Region Hydrogen Hub has been embedded into an economic development framework. It’s an incredibly competitive world when it comes to investment attraction and we must play to our strengths. Beyond being among the world’s least expensive producers of low-carbon hydrogen — we have a high quality of life, diverse and highly skilled talent, expertise in artificial intelligence, strong logistics and supply chains, and access to global markets. With focus and collaboration across our region, we can compete to win on the global stage.

Through this launch and the bringing together of key regional partners, we have the potential to accelerate the impacts that hydrogen can bring to our region, to Alberta, and to all of Canada —we’re excited to get started.

Edmonton tech firm building bridges to net zero future

IFS has entered into an agreement with Westcan Bulk Transport and have implemented IFS’ technology on one of their trucks with five more to be outfitted in March, 2021

Edmonton based tech start-up, Innovative Fuel Systems (IFS) has developed a multi-fuel technology that allows heavy-duty truck engines to displace up to 55% of diesel fuel with natural gas or other cleaner burning fuels. Last year, they successfully filed a PCT International Application with the United States Patent Office to seek full global patent protection for their Multi Fuel Technology Platform (MFTP™). With a focus on worldwide commercialization in the road transportation sector, they are beginning the process of rolling out the first trucks outfitted with this technology. 

While businesses in a lot of traditional sectors have been experiencing increased uncertainty and anxiety throughout the global economic recession, IFS is bucking the trend as they successfully move into the commercialization stage of their technology.

“The government grants that we’ve been able to access have been really helpful in reaching this stage,” said Leland Oberst, CEO of Innovative Fuel Systems. “It’s clear that the government wants us to succeed. And what I’ve found, is that a lot of our angel investors view these grants as a stamp of approval and it really helps to move the dial on an investor’s final decision to invest in our company.” 

Already IFS has entered into an agreement with Westcan Bulk Transport and have implemented IFS’ technology on one of their trucks with five more to be outfitted in March. They’re also experiencing a lot of interest in their company by the investment banking community, which isn’t surprising when we look at global investment trends. 

Growing emphasis on ESG 

Over the last 12 months, the pandemic has overshadowed nearly every other newsworthy story in the media including climate change. But what we’ve also seen is an increased interest in ESG (environmental, social and governance) policies by international investors. This means that businesses that are paying attention to these trends are the ones thriving in our current economic climate. 

Globally, this was the year the “net zero by 2050” climate commitment went mainstream with the number of commitments to reach net zero emissions from local governments and businesses roughly doubling in less than a year. Governments and industry are prioritizing climate action in their recovery from Covid-19 and as part of the UN Race to Zero campaign, many are aiming for a zero-carbon economy by 2050. There’s also a growing alliance aiming to reach these targets as early as the 2040s. And the buy-in is significant. This alliance now encompasses 22 regions, 452 cities, 1,101 businesses, 549 universities and 45 of the biggest investors. This shift isn’t just happening in emerging sectors, traditional sectors are finding new innovative practices and technologies to lessen their dependence on fossil fuels. 

The challenge that exists in traditional sectors, like the heavy-duty trucking industry, is that the macroeconomics make it incredibly challenging to undertake this type of transition. Currently, any green technologies that are emerging for this sector (electrical, hydrogen, etc.) are incredibly cost-prohibitive. With cost savings being the biggest driver to change for this industry, there hasn’t been a significant onus to innovate. That’s where Innovative Fuel Systems comes in. 

The need for bridge technologies

IFS’ technology reduces operating fuel costs, preserves torque and engine performance characteristics, and at the same time, reduces greenhouse gas emissions. IFS’ technology, which is sold and licensed to customers as an aftermarket product, also preserves the integrity of a manufacturer’s engine -warranty making the technology infinitely scalable.

Leland Oberst, CEO, Innovative Fuel Systems

“‘Bridge technologies’ have a major role to play in the energy transition,” said Leland. “Traditionally, diesel fuel has been getting the job done in terms of functionality and transportability. But there is also a growing recognition within the industry that there is a need to reduce greenhouse gas emissions. The beauty behind our technology blending natural gas with diesel fuel is that, while it lowers emissions and introduces significant fuel savings, it is also able to deliver the same power that these heavy-duty trucks need. Natural gas is plentiful and cheap in North America and IFS’ technology doesn’t create any trade-offs as far as functionality. We really see our technology as a win-win-win scenario.”

And industry agrees. 

“Westcan is committed to reducing GHG emissions and will continue to play a leadership role in reducing both GHG emissions and fuel costs in order to make our operations efficient and sustainable,” says Mike Royer, Vice President, Fleet Services, Westcan. “Utilizing IFS’ technology gives us the potential to impactfully reduce GHG emissions and fuel costs from Class 8 heavy-duty trucks, including trucks with payload in excess of 80,000lbs.”

As Leland points out, the bridge to carbon neutral by 2050 is not a short bridge and technologies such as their Multi Fuel Technology Platform allows businesses operating in this sector to reduce their environmental impact in a way that is accessible. At the same time, bridge technologies can give the emerging green technology sector the time needed to build solutions that address the scalability issues around these innovations in a way that makes sense from a macroeconomic and business development standpoint. 

“At IFS, we believe any technology that reduces GHG emissions must also be economically viable – this ensures comprehensive market adoption,” said Leland. “By taking a pragmatic approach to product development, IFS ensures our cleantech provides customers a tangible and quantifiable economic benefit.”

A view to a carbon neutral future

It’s that pragmatic approach that has Leland and IFS keeping their sights on the future of where this industry is headed. “It’s important to note that our technology platform has ability to utilize other cleaner burning fuels,” said Leland. “As such, our patent is designed around the use of multiple fuels. This means that we’re ready to broaden the applicability of our technology with other fuels as new opportunities emerge. We know that hydrogen is likely to play a major role in energy transition broadly and in this industry specifically. When appropriate, we’re less than one year away from being able to introduce hydrogen fuel capability into our technology.”

When it comes to the future of IFS Leland is bullish about their prospects. “When I look at our company, I see rapid market adoption because our prospective customers are able to reduce fuel costs, while also reducing GHG emissions. Also, we’ve put together an experienced and driven team that’s excited about contributing to IFS’ future. There’s a real entrepreneurial spirit within our team. Our goal is to have our kits outfitted on at least 7,700 trucks by 2026, which means we’re looking to expand our customer base well beyond the Edmonton Metropolitan Region.”

Learn more about innovations in clean energy in the Edmonton Region

How growing global electric car sales could be a boon for Alberta

Lithium used in batteries found in brine already pumped by oil operations

Lithium, a key component in electric vehicle batteries, can be found in brine pumped during the petroleum extraction process. (The Associated Press)

It may sound paradoxical, but electric cars could soon be an economic driver for oil-rich Alberta.

Global sales of electric vehicles grew by 43 per cent in 2020, according to numbers recently released by sales database EV Volumes. A key component of their batteries is lithium, a mineral found in Alberta — if you know where to look.

“There’s a lot of opportunities for lithium in Alberta,” said Roy Eccles, a senior consultant with Apex Geoscience in Edmonton, in an interview with CBC’s Radio Active.

Eccles says exploration in the last decade by companies of the Devonian-aged oil and gas reservoirs — between 1,600 and 3,330 metres below the surface — has confirmed the accompanying salt-water brine is enriched with lithium.

The Leduc Formation, the source of Alberta’s first big oil boom, is also a rich lithium deposit. There are about 10.6 million tonnes of lithium carbonate equivalent identified in the province, according to the Canadian Lithium Association, and the potential could be even higher.

London-based commodity researcher and market consultant Roskill released an August report that notes demand will grow for the mineral at least until 2030. 

Eccles says current major lithium extraction areas in arid climates near the equator use evaporation pods that can take months to years and leave a large environmental footprint. 

That’s not possible in Canada’s climate, he said. Instead, companies are attempting to develop new technology that will rapidly extract lithium from the brine.

Lithium is plentiful in Alberta, and companies are hoping to capitalize on growing demand for lithium batteries by finding an easier and greener way to extract the light metal. (CBC)

Existing infrastructure 

The Alberta advantage is that it can use already existing oil operations and technologies.

“It’s essentially using infrastructure that’s already in place,” Eccles said, adding that petroleum production is measured in short timelines, pumping up hydrocarbons before reinjecting the brine back underground.

There is also an environmental feature to the process, according to University of Alberta associate professor of earth sciences Daniel Alessi.

“They’re taking something that’s already being produced, essentially, and adding value to that with very little carbon footprint,” Alessi said. 

“It’s exciting because there’s certainly a green aspect to it.”

Alessi said it would also be advantageous for Canada to have its own internal source of lithium.

The limiting factor is technology to convert the brine into a usable product.

“We’re at the point right now where the technology is, I would say, holding back the commercialization of the process,” he said. Alessi added that some key players have reached the pilot stage with aims to reach an industrial scale process in two to five years.

Daniel Alessi is an associate professor at the University of Alberta who specializes in clean lithium extraction from the oilfield. (Audrey Neveu/Radio-Canada)

Canadian companies developing processes

In December, Vancouver-based Lithium Standard announced it had successfully completed a proof-of-concept to extract lithium from a brine in Arkansas.

There are a number of companies in Alberta developing their own processes, including Summit Nanotech.

The Calgary-based startup delayed plans for testing in 2020 due to the pandemic but further developed its process, which CEO Amanda Hall says resulted in improved operating expenses and reduced end-to-end greenhouse gas emissions.

“The opportunity to grow a sector that supports the future of renewable energy storage and electromobility while in parallel continuing efforts to create a low carbon barrel of oil sets Alberta apart in the energy landscape,” she said in an email.

“We are excited to be a part of this.”

Hall said a pilot is on schedule to be commissioned in Chile this year. 

Reducing greenhouse gas output

Calgary-based E3 Metals was founded in 2016 and hopes to run a pilot of its own lithium extraction process by the end of this year. It aims to eventually drill its own project into the Leduc Formation.

CEO Chris Doornbos said the eventual operation’s greenhouse gas output will be mitigated by using electricity from its own gas-fired power plant, creating a net zero emission for the product.

He also said that compared to mining a more traditional lithium operation, the model uses only about three per cent of the land use and will not consume fresh water or leave tailings.

“When you look at it from that perspective, producing lithium in Alberta is much more environmentally responsible than most other production of lithium in the world.”

Doornbos said lithium extraction presents an opportunity for expertise already present in Alberta’s energy sector to be put to a new use.

“At the end of the day, it’s still putting Albertans back to work — it’s nothing we don’t know how to do or haven’t done before.”

E3 Metals’ current roadmap aims for commercial operations by 2024.

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