Canadian Gas Association–Hydrogen: Path to Net Zero or Zero Sum?–

• Canada and the United States Pursue Hydrogen Economies

Will hydrogen fuel cells provide an energy storage solution for heavy vehicles in the transportation sector and compensate for the intermittency of wind, solar, and other energy sources? In recent months both the United States¹ and Canada² have issued federal strategies for the development of hydrogen economies, from hydrogen production to fuel cell applications, that are framed as an essential element in reaching net-zero carbon emissions.

The technology for fuel cells dates to the 19^th century, when William Nicholson and Anthony Carlisle managed to “break” water into its two elements, hydrogen and oxygen, using electricity. This process, called electrolysis, was used by William Grove to create the first functioning fuel cell in 1839 when he generated electricity from an electrochemical reaction of hydrogen and oxygen using platinum as a catalyst. Getting electricity out of the fuel cell showed that fuel cells could function as a battery.

Research subsequently produced several types of fuel cells with different properties that make them suitable for a variety of applications. Hydrogen is the fuel in the fuel cell, but when combined with oxygen, usually air, it produces electricity from a chemical reaction rather than combustion. The byproduct is water.

A few fuel cell types³ are suitable for applications that reduce the amount of fossil fuel combustion and therefore provide a means to displace carbon emissions. Governments seeking to make good on pledges to reduce carbon emissions to “net-zero” (where carbon emissions are matched by carbon emission reductions) have led the development of national hydrogen strategies.

Hydrogen is an abundant element, but typically found in combination with oxygen (water) and carbon (hydrocarbons). Each hydrogen source has vocal proponents and opponents and although the resulting hydrogen is the same, the political debate over hydrogen has become colorful — literally.

When a hydrocarbon is split into its constituent elements, hydrogen and carbon, the carbon byproduct can be released into nature or captured. Carbon captured can be used in industrial processes or stored to prevent negative environmental impacts. Hydrogen from hydrocarbons without carbon capture has been labeled “gray.” When the carbon is captured, the hydrogen is called “blue hydrogen.”

Blue hydrogen is clearly better for the climate than gray hydrogen, but there is also green hydrogen. Green hydrogen is produced through electrolysis, the process Nicholson and Carlisle pioneered. Green hydrogen proponents envision electricity produced by zero-emission methods — solar cells, wind turbines, hydroelectric dams, and nuclear power plants — as a promising method for decarbonizing economies without starving them of energy. Currently, the cost of producing green hydrogen is higher than the cost of producing blue hydrogen — and while the economics of green hydrogen may improve over time as technology advances — there will likely always be a cost disadvantage given the fact that there are multiple energy conversions involved.

This is the second reason for governments to develop national hydrogen strategies, beyond their net-zero pledges. Science is indifferent to the choice between blue or green methods of producing hydrogen; the economics of the two methods favor blue today, but green is working to close the gap. And so the choice is a political one.

For regions with large hydrocarbon resources, like Alberta or Texas, blue hydrogen production offers a way to participate in national and international efforts to address climate concerns. People in these places often have a conservative political outlook. The boom-and-bust cycles typical of commodity markets provide enough risk and uncertainty. Sticking with the tried and true, striving to live up to the values that reflect good character, are virtues that prove their worth in hard times when you learn who you can count on, and who your true friends are.

Leaders in Ottawa and Washington in 2021 are progressive and green hydrogen production has appeal for them because it reflects the power of technology to allow nations to reach ambitious climate goals. The urgency of those goals justifies major changes, overriding objections and riding over naysayers.

And yet, both Canada and the United States have adopted hydrogen strategies that contemplate the full spectrum of colours in hydrogen production. In part, this ecumenism on hydrogen supply reflects the problem of demand. Hydrogen fuel cells will advance the electrification of transportation and help electrical grids to balance intermittent generation.

The significant investments in fuel cell vehicles and fuel cell installations by electric utilities — and a major expansion of electricity generation, transmission, and distribution capacity across the continent — will be difficult while economies are still recovering from the pandemic. Building back better will require broad support and will be harder if advocates of blue and green methods of producing hydrogen start fighting now.

Member companies of the Canadian Gas Association will be pivotal in the debates over hydrogen in North America. Hydrogen supply logistics are more likely to resemble those for natural gas than for oil, since hydrogen can be produced in many places and transporting hydrogen by ship requires a maritime fleet that does not exist yet. Like gas, hydrogen may develop supply hubs that connect to consumers through pipe and some land transport of hydrogen in the form of ammonia or methanol for transit.

Adding hydrogen in existing gas pipelines is an option but carries risks because adulterating the gas affects the pressure in the pipe. A network of dedicated hydrogen pipelines would cost more now but make more sense over the medium term while demand is established. Separate pipelines for green and blue hydrogen would exponentially increase cost and provide no real benefit since the hydrogen they deliver is the same.

Washington and Ottawa will try to navigate their economies to a hydrogen transition to reach net zero. Given the recent track record of politicians agreeing on anything, the hydrogen economy might never take off. The blue versus green debate could stall the hydrogen economy, too.

CGA members know what it takes to move hydrogen as a component of methane. They understand the importance of equipment in enabling demand, and reliability in convincing consumers to choose to invest in equipment to use their product. In a rational world, the natural gas sector would be managing the transition to hydrogen if that is what consumers want.

“CGA members know what it takes to move hydrogen as a component of methane. They understand the importance of equipment in enabling demand, and reliability in convincing consumers to choose to invest in equipment to use their product.”

Progress in vaccinations and beating back COVID-19 might make our energy debates in Canada and the United States a bit more rational, but both countries’ hydrogen strategies will remain political, and therefore uncertain, as long as net zero goals are a zero-sum equation for blue and green hydrogen.

Christopher Sands is director of the Woodrow Wilson International Center for Scholars’ Canada Institute and a senior research professor at Johns Hopkins University’s Paul H. Nitze School for Advanced International Studies, both in Washington D.C.

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