UCP govt spending $176M to subsidize blue hydrogen plant

The Alberta government recently announced that they are providing $176 million in public funds to prop up an American company’s construction of a new blue hydrogen facility near Edmonton.

Air Products, which is headquartered in Allentown, Pennsylvania, will be building its $1.6 billion facility just northeast of Alberta’s capital city. Once built, the facility will be capable of producing 165 million standard cubic feet of hydrogen every day.

The UCP government, in the media release announcing the project, claimed the facility “is designed to produce clean hydrogen”. This phrase is misleading.

There are various phrases used in the energy industry to refer to how hydrogen is produced. The two most popular are “green hydrogen” and “blue hydrogen”.

Green hydrogen is hydrogen produced using renewable energy. Blue hydrogen is hydrogen produced using methane, otherwise known as natural gas.

The latter is the process this facility will use.

To create blue hydrogen, producers use a process called steam-methane reforming, where methane reacts with steam in a pressurized environment. This process creates 3 byproducts: hydrogen, carbon monoxide, and carbon dioxide.

The phrase “clean hydrogen” refers to green hydrogen, as well as blue hydrogen, once the greenhouse gas emissions created during the blue hydrogen production process are captured and stored.

And that’s not including emissions during the extraction, transportation, and storage of natural gas, just at the point of production.

Plus, carbon capture and storage operations are often powered by natural gas as well.

One study published last year by researchers at Cornell University and Stanford University report that “the greenhouse gas footprint of blue hydrogen is more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat”.

That’s an odd definition of “clean”.

Air Products’ new facility will be producing blue hydrogen and then capturing and storing the greenhouse gas emissions created during the production process.

Not only will it consume millions of cubic feet of natural gas every day, but it’s going to take a whole lot of water, too, for all that steam. Generally, it takes about 4.5 kg of water to produce 1 kg of hydrogen.

Construction will finish in 2024 and will employ 2,500 tradespeople during that period. The completed facility will employ 30 permanent workers; although it wasn’t clear how many of those would be full time.

Of the $176 million in public funds provided by the provincial government to subsidize this fossil fuel consuming facility, $161.5 million of it will come from the province’s Alberta Petrochemical Incentive Programme. The remaining $15 million will come from Emissions Reduction Alberta.

The federal government has promised an additional $300 million to prop up this facility through their Strategic Innovation Fund’s Net Zero Accelerator Initiative.