Canada is blessed with an abundance of natural gas, which is a good thing given how cold it can get in the winter.
More than six million Canadian households use natural gas for space and water heating. In B.C., Alberta, Ontario and Quebec alone, there are roughly 244,000 kilometres of natural gas transmission and distribution pipelines in the ground, according to recent presentations by Canadian gas utilities.
But what happens to all that infrastructure – and the natural gas companies that built it – when federal and provincial climate action regulations force Canadians to stop using cheap natural gas to heat their homes?
Canada aims to reduce its emissions by 30% below 2005 levels in the next 10 years, and 84% of residential greenhouse gas emissions in Canada come from space and water heating – most of that from burning natural gas.
“The status quo is clearly not an option,” said Richard Carlson, director of energy policy for Pollution Probe.
But neither is total electrification a realistic option.
Those air source heat pumps you may have heard so much about – though truly wonderful low-carbon sources of heating and cooling – just don’t cut it when the mercury plunges below -10 C, which it often does, for days and even weeks at a time, in many parts of Canada.
“Air source heat pumps generally struggle at around minus 10,” Carlson said.
Even if the entire residential sector could convert to electricity – using a combination of heat pumps and resistance electrical heating for backup during peak cold spells – the additional power generating and transmission systems required would be staggering.
In Ontario alone, meeting the peak heating needs in winter solely through electrical heating would require 60 nuclear power plants, according to one estimate.
“The demand on the grid would be immense,” said Carlson, one of the guest speakers at a series of webinars on hydrogen and renewable natural gas (RNG) hosted by the Pembina Institute. “Building new electricity transmission distribution takes a long time. So what can we do now?”
The answer is hydrogen and renewable natural gas (RNG), both of which can gradually displace, and eventually phase out, natural gas, without a massive disruption to utility companies that would leave hundreds of thousands of kilometres of pipe rusting in the ground.
“They manage our infrastructure assets, and we don’t want to strand those assets,” said Sabina Russell, principal at the Vancouver-based Zen Clean Energy consulting firm. “We will need them to deliver the energy that we need.”
Canadian natural gas utility companies in Canada have not been idle when it comes to planning for decarbonization. FortisBC (TSX:FTS), Enbridge (TSX:ENB), ATCO (TSX:ACO.X) and Enegir in Quebec are all pursuing hydrogen and RNG strategies.
While FortisBC is focusing largely on RNG, ATCO is focused on “blue” hydrogen in Alberta. In Ontario, Enbridge is looking at “green” hydrogen from renewable power.
Of all the provinces, Alberta has the greatest potential to be a hydrogen powerhouse, thanks to its oil and gas sector. It is already Canada’s largest hydrogen producer.
Currently, it produces “grey” hydrogen made from natural gas. But Alberta could be a major “blue” hydrogen producer using its abundant natural gas and carbon capture and sequestration capacity. Even with the added cost of carbon capture, blue hydrogen is still cheaper to produce than “green” hydrogen made from water and renewable power.
Alberta has huge geological sequestration capacity – again, partly due to its oil and gas industry, which has left a lot of empty oil and gas wells that could be filled with CO2. It also now has the world’s largest dedicated CO2 pipeline. The Alberta Carbon Trunk Line went into operation this year and can move and sequester 14.6 megatonnes of CO2 annually.
To put that in perspective, Greg Caldwell, ATCO’s director of development and innovation, said that if the entire ATCO natural gas system in Alberta was replaced with 100% hydrogen, annual CO2 emissions would be cut by 12.4 megatonnes.
Russell said Canada’s oil and gas sector has an estimated $600 billion in assets.
“Those things can position us to pivot well into a hydrogen future,” he said. “And we have a head start. We make more than three million tonnes of hydrogen per year today, mostly for upgrading. We know how to make hydrogen, we know how to handle it.
“We can see significant economic growth, both from domestic deployments and the export opportunity that hydrogen brings.”
B.C. also has potential to develop a hydrogen industry. It has both natural gas to produce grey or blue hydrogen and an abundance of clean hydro power to produce green hydrogen.
But FortisBC is currently focused more on RNG than hydrogen. It has set itself a target of reducing the emissions intensity of its natural gas 30% by 2030. Two of the pillars of that strategy are producing liquefied natural gas (LNG) and compressed natural gas for the transportation sector to displace diesel and RNG for residential heating.
RNG can be made through methane capture at landfills and dairy farms or from the production of syngas from wood waste. Currently, less than 1% of the gas Fortis BC supplies to customers in B.C. is RNG. FortisBC is aiming for a 15% RNG target by 2030. Getting there will require significant investment in biogas production, with much of that investment expected to come from the forestry sector.
“This is a bit of a game-changer and a door-opener for us,” said FortisBC RNG manager Scott Gramm. “It means there’s opportunities to partner with the forest industry and really find ways to make use of their waste product in our gas system.”
Hydrogen and RNG primer
The carbon content of natural gas is lowered when either hydrogen or renewable natural gas (RNG) is injected into the natural gas system.
An RNG molecule is no different from a fossil fuel natural gas molecule – it’s basically methane, but produced from organics in a way that is carbon neutral. Hydrogen is combustible, but produces no CO2 emissions.
Hydrogen is the most flexible of the two low-carbon gases. It can be used as a carbon-free or low-carbon additive for fossil natural gas, and is also used to power hydrogen fuel cells.
It is also a potential renewable energy storage option, with hydrogen produced from water and wind or solar power when that power is surplus, stored and then run through fuels cells to produce electricity when the sun isn’t shining or wind isn’t blowing.
