A Suncor logo is shown at the company's annual meeting in Calgary, Thursday, May 2, 2019.THE CANADIAN PRESS/Jeff McIntosh

Oilsands producer Suncor and utility Atco to pursue ‘world-class’ hydrogen project

Oilsands producer Suncor and utility Atco to pursue ‘world-class’ hydrogen project

CALGARY — Oilsands producer Suncor Energy Inc. is partnering with utility Atco Ltd. on a “multibillion-dollar” project to produce more than 300,000 tonnes per year of hydrogen.

The Calgary-based companies say the project will help Canada reach its 2050 target of net-zero greenhouse gas emissions — and aid their own GHG reduction goals — by capturing and storing more than 90 per cent of the carbon dioxide produced from energy required to make the hydrogen.

The project would reduce Alberta’s CO2 emissions by more than two million tonnes per year, they said.

“That’s actually one of the joys of this is that by combining the potential demand on the natural gas system with demand that we have for our refinery in Edmonton, we can actually build at world-scale,” said Suncor CEO Mark Little.

“At 300,000 tonnes a year of hydrogen, this is a world-scale project … I do think ultimately Canada’s actually going to be a big player in clean hydrogen globally and I think this is the first big step forward.”

There’s no capital cost estimate yet for the project but Atco chair and CEO Nancy Southern said in the joint interview with Little it will certainly be a “multibillion-dollar” facility.

The project as presented is a “positive” step by industry but it’s difficult to weigh its benefit against other choices with the available information, said Chris Severson-Baker, Alberta regional director for the Pembina Institute environmental think tank.

“We really need to find ways to reduce the emissions in a significant way on an absolute basis from oil and gas and that will either happen through carbon capture and storage like this kind of project or simply reduced production, which is inevitable if the world continues to go down this track of substituting other forms of energy for transportation fuels,” he said.

Suncor is to build and operate the hydrogen production and carbon dioxide sequestration facilities and Atco would construct and operate the associated pipeline and hydrogen storage facilities.

About 65 per cent of the hydrogen would be used by Suncor in refining processes and cogeneration of steam and electricity, reducing emissions by up to 60 per cent at its Edmonton refinery.

Another 20 per cent would be added to the provincial natural gas grid to reduce emissions from uses such as home and business heating. The rest will be sold to various users.

“We think there’s going to be tremendous demand from transportation, the agriculture fertilizer industry, large heavy-haul trucking,” said Southern.

“We see that there’s going to be significant demand for the additional excess 15 per cent of the hydrogen.”

Atco announced a $6-million pilot project last year to blend about five per cent hydrogen into the natural gas stream for utility customers in Fort Saskatchewan, a small city northeast of Edmonton. It was backed by $2.8 million in Alberta provincial grants and is expected begin construction this year.

The project announced Tuesday would easily supply the blending project, Southern said.

The hydrogen production facility would be located at Atco’s Heartland Energy Centre near Fort Saskatchewan. It is expected to face an investment decision in 2024 and could be operational as early as 2028.

The partners hope to access provincial and federal financial and other support but say there are many regulatory and fiscal unknowns, such as availability of carbon sequestration rights, emissions reduction compliance credits, regulations to allow hydrogen blending into natural gas and investment tax credits for carbon capture utilization and storage (CCUS).

Bringing the project forward now in the midst of a 90-day consultation period for the federal government’s CCUS support promised in its recent budget is expected to sharpen focus by presenting a “real project” to discuss, Little said.

In the budget announcement, Ottawa said captured carbon used for enhanced oil recovery won’t qualify for a proposed investment tax credit — Little said that’s not a problem for the Suncor-Atco project because the “base case” is to store all of the carbon underground.

Both Alberta Premier Jason Kenney and François-Phillippe Champagne, federal minister of innovation, science and industry, voiced support for the project in a news release.

This report by The Canadian Press was first published May 11, 2021.

Companies in this story: (TSX:SU, TSX:ACO.X)

Dan Healing, The Canadian Press

Just Posted

The Sylvan Lake Gulls celebrate a sixth inning home run from Nolan Weger on Sunday during a game against the Edmonton Prospects. (Photo by BYRON HACKETT/Advocate Staff)
Historic opening weekend for Sylvan Lake Gulls

It wasn’t perfect, but perhaps that was the beauty of it. Fans… Continue reading

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Alberta reports 100 new cases of COVID-19

The Central zone sits at 218 active cases

Three Hills RCMP recovered stolen copper wire during recent investigation near Kneehill. (File photo by Advocate staff)
Fatal ATV rollover near Innisfail Saturday

A 77-year-old man from Red Deer County died Saturday after an ATV… Continue reading

Firefighters and emergency services workers helped celebrate Barry Young’s 85th birthday at Timberstone Mews on May 29. (Photo by Sean McIntosh/Advocate staff)
Firefighters in central Alberta make birthdays special

A fire truck arriving outside your house is not normally good news.… Continue reading

A view of Two Jack Lake in Banff National Park is shown in this undated handout photo. More Canadians are expected to leave their passports at home this summer and hit the road in Canada as the weak loonie and low gas prices prompt a deeper exploration of their own country. THE CANADIAN PRESS/HO - Travel Alberta *MANDATORY CREDIT*
Report: Alberta losing residents to other parts of Canada

As the COVID-19 pandemic slowly winds down in Alberta, residents are continuing… Continue reading

A large number of supporters were out Saturday at a rally intended to bring awareness about including Hinduism in the grade 2 portion of the K-6 draft curriculum. As it stands now, Hinduism won’t be taught until grade 6 in the proposed draft curriculum. (Photo by BYRON HACKETT/Advocate Staff)
Video: Rally to support adding Hinduism to draft curriculum draws crowd in Red Deer

The Hindu community in Red Deer came out in droves on Saturday… Continue reading

Orange shirts, shoes, flowers and messages are displayed on the steps outside the legislature in Victoria, B.C., on Tuesday, June 8, 2021 following a ceremony hosted by the Songhees and Esquimalt First Nations in honour of the 215 residential school children whose remains have been discovered buried near the facility in Kamloops, B.C. THE CANADIAN PRESS/Chad Hipolito
Alberta city cancels Canada Day fireworks at site of former residential school

City of St. Albert says that the are where the display was planned, is the site of the former Youville Residential School

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Germany's Robin Gosens, left, celebrates Germany's Mats Hummels after scoring his side's fourth goal during the Euro 2020 soccer championship group F match between Portugal and Germany at the football arena stadium in Munich, Saturday, June 19, 2021. (Matthias Hangst/Pool Photo via AP)
Germany clicks at Euro 2020 with 4-2 win over Portugal

MUNICH (AP) — Germany finally clicked into gear at the European Championship,… Continue reading

Fans cheer on their team during the pre-game warmup of Game 3 of the NHL Stanley Cup semifinal with the Montreal Canadiens facing the Vegas Golden Knights, in Montreal, Friday, June 18, 2021. THE CANADIAN PRESS/Paul Chiasson
COVID-19 concerns give way to Habs Fever in Quebec as Montreal continues playoff run

MONTREAL — The sun hadn’t yet risen in Montreal on Friday morning… Continue reading

Coronavirus cases are on the rise from India to South Africa and Mexico, in a May 19, 2020 story. (Photo by THE ASSOCIATED PRESS)
As Brazil tops 500,000 deaths, protests against president

RIO DE JANEIRO (AP) — Anti-government protesters took to the streets in… Continue reading

A black bear cub forages for food along a salmon stream below a bear viewing spot for tourists in the Mendenhall Glacier Recreation Area in Juneau, Alaska.  (File photo by THE ASSOCIATED PRESS)
Bandit responsible for vehicle break-ins is a black bear

THORNTON, N.H. (AP) — Surveillance video helped police get to the bottom… Continue reading

FILE - In this April 25, 2019 file photo, Editor Rick Hutzell, center, gives a speech to his staff including Chase Cook, Nicki Catterlin, Rachael Pacella, Selene San Felice and Danielle Ohl at the Capital Gazette in Annapolis, Md. The editor of the Capital Gazette, which won a special Pulitzer Prize citation for its coverage and courage in the face of a massacre in its newsroom, is leaving the Maryland newspaper. Hutzell, who worked at the Annapolis paper for more than three decades, authored a farewell column that was published on the paper's website Saturday, June 19, 2021. (Ulysses Muoz/The Baltimore Sun via AP)
Editor of paper that endured newsroom shooting says goodbye

ANNAPOLIS, Md. (AP) — The editor of the Capital Gazette, which won… Continue reading

Most Read