OTTAWA — Alberta oilpatch entrepreneur Ian MacGregor figures he’s got at least one more big project in him: pioneering a commercial process to make hydrogen fuel from the debris left over after logging companies have taken the high-value wood out of forests.
The vehicle for trying it is the new company Hydrogen Naturally, where MacGregor is executive chair.
“I’m 73,” he told The Logic in an interview. “The sand is running through the hourglass quickly for me. I’m not going to work on something I can’t do.”
Talking Points
- Alberta’s Ian MacGregor, a driving force behind the country’s first new oil refinery in over 30 years and his province’s central carbon-storage pipeline, has a new venture hoping to turn waste wood into clean hydrogen fuel and storable CO2
- Getting federal support might be challenge, because the project doesn’t fit squarely into existing incentive programs
The idea is to construct four hubs across North America where millions of cubic metres of waste wood would be run through gasifiers to produce megatonnes of hydrogen and pure, easily sequestered carbon dioxide that would otherwise be released into the air.
The province got a good deal, MacGregor insisted: “If you look at the underlying numbers on that refinery today, it’s printing money.”
Ian MacGregor, the executive chair of Hydrogen Naturally. Photo: Hydrogen Naturally/Handout
“We started thinking, well, there’s already a machine doing that, it’s called a tree. It takes 400 parts per million in the air and concentrates it to 500,000 parts per million in a tree. Why don’t we just take the carbon out of the tree and use it in the gasifier?”
Neil Dobson joined the effort last March as Hydrogen Naturally’s chief sustainability officer, from cleantech accelerator Foresight Canada—and before that, six years in British Columbia’s climate action secretariat, including leading implementation of the province’s CleanBC climate plan.
Trees do a fine job of fixing carbon if they’re left alone to grow, but logging and sawmills produce vast quantities of “forestry residuals,” Dobson said. “The tree tops, the branches, the skinny trees, the bent trees—all of the stuff that the lumber industry and the pulp industry doesn’t want.”
“We will put it through a gasification process that captures the carbon that’s in the tree, turns it into a liquid carbon dioxide and then sequesters that permanently underground in a long-term geological storage facility,” Dobson said. “As a byproduct of that process, we create a negative-emission hydrogen.”
The central problem for “direct air capture” projects is filtering widely dispersed CO2, MacGregor noted. “We started thinking, well, there’s already a machine doing that. It’s called a tree.”
“Each individual piece of our equipment is in operation somewhere in the world now,” Dobson said.
Half a million cubic metres of wood produces 480,000 tonnes of carbon dioxide to sequester and 20,000 tonnes of hydrogen, Dobson said. Processing and transporting the wood and powering the gasifier would create emissions, but less than burning the raw material or letting it decay.
- Green hydrogen, made by breaking hydrogen atoms off water (H2O) molecules using renewable energy, which is generally considered the cleanest form.
- Blue hydrogen, made by breaking hydrogen off methane (CH4) molecules and storing the leftover carbon.
- Grey hydrogen, which is blue hydrogen without the carbon storage. This isn’t considered environmentally friendly.
Because Hydrogen Naturally proposes to cut carbon emissions overall, it brands its fuel as “bright green” hydrogen, greener than green.
MacGregor met Natural Resources Minister Jonathan Wilkinson last September to try to make the case that Hydrogen Naturally’s process is more environmentally friendly than even green hydrogen. A prep note Wilkinson’s department wrote for him, which The Logic obtained under access-to-information law, briefed the minister on what a fine needle Hydrogen Naturally might need to thread: there are public incentives for systems that capture and store carbon dioxide, and incentives for systems that generate hydrogen fuel, but potential problems with federal support for a system that does both.
Consultations on how the hydrogen-production tax credit will work just closed Jan. 6.
“Canada’s approach to hydrogen emphasizes achieving a low-carbon intensity product, rather than focusing on the production pathway,” Wilkinson’s director of communications, Ian B. Cameron, told The Logic in response to emailed questions this month. “Low-carbon hydrogen production in Canada is expected to be based on a mix of pathways; this could include hydrogen derived from biomass.”
Whether the hydrogen tax credit will apply to technology like Hydrogen Naturally’s, he added, the government can’t yet say: “Once the final form of the credit is published, companies will be able to assess how it applies to them.”
As helpful as these incentives and supports would be, especially for getting the first line started, MacGregor said the only really critical federal policy is a price on carbon emissions.
North America likely has room for four regional hubs of the type MacGregor and Dobson envision, they said—places with reasonably close sources of waste wood, markets for hydrogen and potential sequestration sites for carbon dioxide.
“We’d see one in Alberta, one in B.C., one in Nova Scotia and one on the Gulf Coast,” MacGregor said.
A mock-up of a regional hub where waste wood would be processed to produce hydrogen fuel. Photo: Hydrogen Naturally/Handout
Peak Renewables, the First Nation’s partner in the pellet project, is also a partner in Hydrogen Naturally.
It’s also a “big, big, hairy goal,” he said, a bit sheepishly. “The first thing we have to do is build a single production train of a single hub.”
The first will be the most expensive, the most difficult, the most prone to mistakes and overruns. That was the case with the Sturgeon refinery, MacGregor said ruefully.
This time, the idea is to invest about $1.2 billion in getting the first production train right and tuning the composition of the wood pellets that go into it—especially learning how to combine different mishmashes of inputs, like leftovers from different species of tree, to produce consistent outputs.
“The most important thing with a gasifier is to have a consistent source of feedstock,” MacGregor said. “If it varies, you won’t be able to get the gasifier to run. I didn’t know that before I spent a couple of billion dollars building and fixing a gasifier. But now I know how essential that is.”
Second and third production trains would be cheaper—$750 million to $800 million each, MacGregor said—if the kinks are worked out with the first.
Dobson said Hydrogen Naturally will likely approach the Canada Infrastructure Bank once plans are firmer; the federal agency is meant to support green projects that have trouble attracting regular investment.
“To some degree, we are relying on future government policy in terms of carbon pricing, clean fuels markets and the like,” he said. “That may create just a bit too much risk for traditional investors.”
Where Dobson is precise and cautious, MacGregor, the oil man, talks about the financing challenges with the swashbuckling confidence of somebody who’s arranged billion-dollar projects before.
“We got an OK amount of money at our end,” MacGregor said. “We’ve got a partner who’s got an OK amount of money, so we can do decent-sized stuff. We’re well known for working at the scale we’re talking about—this is smaller than other things than we’ve done.”
Post a Comment