Shift by Alberta Innovates

Our Hydrogen Future and Government Policy

February 08, 2022 Shift Season 3 Episode 3
Shift by Alberta Innovates
Our Hydrogen Future and Government Policy
Show Notes Transcript

On previous SHIFT conversations, we have learned that one of the major gaps to commercializing the hydrogen market is the lack of government policy. What is our current state and what should our elected officials consider when moving this promising industry along? 

Joining us today is Heather Campbell Executive Director of Clean Technology at Alberta Innovates and Dr. Sara Hastings-Simon, Assistant Professor at School of Public Policy and Director of the Sustainable Energy Development Program at the University of Calgary.

Join us as we explore the role policy plays in helping to create a hydrogen economy, the myth of the free market, and much more!


Bios

Dr. Sara Hastings-Simon
 

Sara is an assistant professor in the department of physics and astronomy and school of public policy at the University of Calgary where she directs the Masters of Science in Sustainable Energy Development. She is a macro energy system researcher and her work is focused on understanding how low-carbon energy transitions happen within different sectors of the economy, and how policy responses can improve outcomes. She explores the role of incumbents and governments in development and deployment of new clean technologies, particularly within high carbon economies; the markets and policy structures that enable decarbonisation of electricity systems; and the response of firms to climate policy.

Sara is co-founder and co-host of Energy vs Climate a webinar and podcast that explores the energy transition in Alberta, Canada, and beyond. She is a Global Fellow at the Smart Prosperity Institute at the University of Ottawa. She is also the chair of the panel for Clean Growth with the Canadian Climate Choices Institute and a member of the board of directors of Emissions Reduction Alberta and the Pembina Institute.

Her previous roles include Director of Clean Economy at the Pembina Institute, founder of Business Renewable Centre Canada, and practice manager for Clean Technologies at McKinsey & Company. Dr. Hastings-Simon holds a PhD in physics from the University of Geneva.

Heather Campbell, B.E.Sc., LL.M., P.Eng. 

Heather has had a diverse twenty-five year energy career with technical, policy, and business roles in a full range of energy industries. She is the Executive Director, Clean Technology with Alberta Innovates. 

She holds a Bachelor of Engineering Science degree in Biochemical and Chemical Engineering from the University of Western Ontario (Western University) in addition to a Master of Laws in Energy Law and Policy from the University of Dundee. She is a licensed Professional Engineer practicing in Alberta, Canada.

Heather is an engaged, lifelong community volunteer, actively sharing her talents, resources and time by participating and often leading a purposely diverse range of organizations. She is a board director with Calgary’s performing arts centre Arts Commons, is a member of the Advisory Council for Western Engineering, the People’s Warden at St. Stephen’s Anglican Church in Calgary, and a Commissioner with the Calgary Police Commission. She is the former co-chair of Alberta’s Anti-Racism Advisory Council.

Katie Dean:

On previous Shift conversations, we have learned that one of the major gaps to commercializing the hydrogen market is the lack of government policy. So, what is our current state and what should our elected officials consider when moving this promising industry along? Joining us today is Heather Campbell, the Executive Director of Clean Technology at Alberta Innovates, and Dr. Sara Hastings-Simon, Assistant Professor at the School of Public Policy, and director of the Sustainable Energy Development Program at the University of Calgary. Join us as we explore current hydrogen policy and the opportunities for moving forward.

Katie Dean:

We have heard on our previous podcast that one of the gaps to commercializing the hydrogen market is the lack of government support or policy for entrepreneurs scaling, or even pan-government cooperation. We know that governments have the ability to create policies at override market forces, and Sara, in one of your papers, you made a really great reference to SAGD which is a Karl Clark product in invention, I guess, innovation. Let's start there. What are the policy gaps preventing Alberta from scaling our hydrogen market? Sara, I'm going to start off with you.

Sara Hastings-Simon:

Yeah. Well, great question. Indeed, as you said, I think there's very clearly a role for government in the start of essentially any market, and if you go back and look at the history of markets, whether it's SAGD or other technologies, certainly there's other examples even within the oil and gas space, the role of the US government in development of the shale fracking technology. Also, there was a significant government role there. When we talk about hydrogen, there's sort of different categories that government policy can be helpful in, and I think really it's an example where there's sort of issues with hydrogen across a number of them.

Sara Hastings-Simon:

So certainly, when you talk about proving out the technology or reducing the cost of the technology, the technology does exist to create hydrogen with low carbon footprint, but certainly, there is the potential to bring that down in cost by scaling up. There's the infrastructure needs that kind of go along with that, so infrastructure to produce and distribute technology when we talk about the carbon capture and the need for government to be involved in the regulation of the storage, and then also codes and standards around incentivizing the use of hydrogen. Really, I think it's actually a great example of a sector in which a lot of those different areas require some kind of government intervention.

Jon Hagan:

It's interesting, especially when you think in the context of maybe more traditional approaches to economy and the free market, this stands really kind of in opposition to it in a way because you get these entrepreneurs in this mindset that there shouldn't be government support and intervention. We just need to plow through that old mindset.

Sara Hastings-Simon:

Yeah, and I would call it a... I'll just jump in with one thing there. I think I would call that a myth really more than anything else and it's perpetrated. I think most recently we saw Elon Musk railing about the idea of government getting involved in innovation. Of course, he seemed to have failed to mention the significant loan that he got from the department of energy in the US to start his Tesla production facility and manufacturing plant, so I think a lot of that is-

Heather Campbell:

Ding ding ding ding.

Sara Hastings-Simon:

Yeah. It's sort of more like the way that stories are told rather than actually the way that history has progressed.

Heather Campbell:

I was going to say just into that myth space, I think about it, and Canada's oil and gas sector is the largest emitting sector and it's 26% of Canada's emissions, and without further action, those emissions are just going to increase, and globally, consumers, businesses, investors, the whole shebang are actually giving preference to cleaner fuels and investments. So, it's not as though this is some... We talked about free market. It's not as though capital markets and investors are not asking for this opportunity, so no myth with a capital M.

Jon Hagan:

No, and that's great. That's great to dispel that because it's that prevalent narrative that seems to exist, and I'm glad that you both commented and/or helping to dispel that.

Katie Dean:

But let's move into policy gaps. What gaps are you guys seeing in our current government policy around hydrogen?

Heather Campbell:

Well, I think the first thing I would say is that one of those gaps has been filled at least actually having a strategy. Canada has a hydrogen strategy, Alberta has a hydrogen strategy, the two are integrated, and that's a good thing.

Jon Hagan:

That's awesome. Yeah.

Heather Campbell:

I hate to drop that for Martha Stewart like, "Check. That's a good thing," tone but it feels right. For Canada, hydrogen is one of those exciting economic transformation opportunities. It's an opportunity to dramatically reduce emissions in the industrial sector particularly for us in hard to decarbonize sectors like for finding and petrochemicals and oil and gas processing. It's a key part of our path towards net zero emissions by 2050. Alberta on its own is probably the largest producer of domestic hydrogen mostly use, of course, in petrochemicals and refining, but having a Canadian hydrogen strategy and Alberta hydrogen strategy, that actually positions us to be a global leader in hydrogen production and that means we'd be a global leader in decarbonization.

Heather Campbell:

When I think about what's missing, it's really about not necessarily what's missing but about completing the elements of the actual strategy which is a policy piece, right? You don't rule out a strategy without it being approved by government. Now, it's closing the gaps on the technology gaps that we have. So, being able to inform the public and help them understand the scope and the benefits and the deployment of a hydrogen economy in Alberta and in Canada, identifying those technology gaps whether it's in production and storage, transportation carrier, and use markets, the whole bit, and being able to move those technologies from emerging and highly challenged from both a technical and economical space and moving them from, we talk about in Alberta Innovates, from a technology readiness level three to maybe into a six or hopefully all the way to the end and to a nine where they're fully commercialized, being able to provide those test things services so that we can actually not only just do the technical innovation, but also do the regulatory policy innovation and the market tools so that we understand actually how to implement a hydrogen economy in Alberta.

Jon Hagan:

Now, that makes me think of the entrepreneur, the person on the ground developing these innovations. As we start moving forward, and you were talking about moving from these TRDL two, three, ultimately to a nine, what is policy doing to help those innovators move across the spectrum? Let me just give you an example. One thing I think about when we talk about green technology as a homeowner, the government provides rebates for things like solar panels, they provide rebates for things like high efficiency furnaces and water tanks. Is there something, is there talk that you both have heard about some support for the entrepreneur moving their products forward to get them the industry and to get industry to adopt them, these technologies?

Sara Hastings-Simon:

Yes. One of the biggest supports that I would point to that's in place and is getting better over time is a price on carbon because certainly the business case for moving to hydrogen is reducing carbon emissions, and of course, we know that in Canada, we have an economy wide price on carbon, and that's a price that will increase over time, and so that is one of the, I think, important price signals especially when you talk about the use in industry. I think one of the other challenges around integration of hydrogen into the economy is that to some extent, we don't exactly know what the final state will look like and what exactly that role for hydrogen is within the Alberta economy and within the global economy. We know that there is some role for hydrogen within a decarbonized energy system.

Sara Hastings-Simon:

I would argue that a hydrogen is almost... I like this analogy of the Swiss army knife of fuels. You could, in theory, use it to do everything, but there may be better tools for a given job. What that means is that we could use hydrogen for all kinds of things, but of course, it's not only hydrogen producers are not competing with each other, they're also competing with other solutions for decarbonization. So, one of the challenges from a policy perspective is how do you provide that support that is going to be sufficiently targeted to advanced technologies towards commercialization and towards widespread deployment but in a way that is sensitive to where things might go with the overall energy mix and where hydrogen has that role to play. That's the fine line that I think policy makers and agencies that support innovation need to do is to try to find a way to design policies that are supportive but also keeping in mind where that ultimate market might be.

Katie Dean:

What does that look like from your perspective, Sara? You're talking about enacting some policies, so what types of policies would you recommend?

Sara Hastings-Simon:

Certainly, I think there's a role for public support for early stage demonstration projects, first of their kind pilot projects. One of the areas, I think, of policy support that if I were to pick one we may be underdo a little bit within the Canadian system is some of the financial tools. We're talking about not that really early stage direct grant support for a project and not the late stage. We have a price on carbon and there is that financial incentive, but that middle ground where you have these issues of something may be economical, but there may be either policy uncertainty, so are we going to have a carbon price in the long term? Where is that carbon price going to go? There may be this information gap so investors may perceive a risk around a technology that isn't really there.

Sara Hastings-Simon:

There's very good policy tools that exist in that space, things like loan guarantees. I mentioned before when we were talking about Tesla and Elon Musk, that's the form of support that he got. It wasn't just a gift, a grant for the manufacturing facility but it was actually a loan guarantee, so basically enabling raising of financing or direct financing which is then paid back if those companies are successful. Some of those tools that do maybe a better job of balancing the public and private risk and reward that come out of these projects, I think, is something we should be thinking a lot about in all spaces but certainly also in hydrogen.

Katie Dean:

Heather, I see you nodding vigorously. Would you add anything to what Sara just said?

Heather Campbell:

Absolutely. It is recognizing that not all of the roads towards hydrogen are clear and straight. When I start to think about hydrogen production technologies, of course, we're looking at low carbon intensity technologies, and then you get into pyrolysis and intrinsic production and electrolysis and steam methane reforming, and with CCUS, of course, to get you that low carbon intensity, but then you also start to talk about small modular nuclear reactors, which if you're keeping your head narrowed in saying, "Oh, well, that's just really we're doing an alternative energy type approach," you're not thinking about the idea that there are technologies within the small modular nuclear reactor field that produce this beautiful, lovely, clean stream of hydrogen as well along with this lovely piece of electricity that can be used to help decarbonize difficult to decarbonize industries like oil sands processing but also provide electricity for rural and remote communities particularly for indigenous communities. Boom. QED.

Heather Campbell:

So, thinking and being able to recognize that our energy for portfolio needs a policy framework that's flexible enough. It's not even just the policy but it's the flexibility within that policy to include a broad range of technologies. There's no one item that's going to deliver our decarbonization opportunities and we need to have flexibility in our energy policy to be able to include and uplift those technologies and demonstrate them so that we can know what's feasible.

Jon Hagan:

That's a really great point. I think it's not that hydrogen is going to come along and supplant everything, and now, hydrogen's here to stay and oil and gas, and any other thing is just now a thing in the past. So, it's all of these things working in tandem towards a more cleaner or as close to net zero as we can get. This makes me think about some of those bridge technologies. I don't know if that's a common term but how innovators are coming along creating bridge technologies that will help us move forward. I think that what you both said in terms of policy speaks to that if these technologies are proven and moving forward that there should be policy in place to help support them. We don't pick winners, but if something pops out, the cream rises to the top, so to speak.

Heather Campbell:

Oh, John, I absolutely do pick winners. That's literally my job. I'm okay with it.

Jon Hagan:

Tell me a little bit more about that. Let's talk a bit more.

Katie Dean:

I love that boldness.

Heather Campbell:

If we think about the work that Alberta Energy's done to develop a hydrogen strategy, one of the key elements in that is a clean hydrogen center of excellence. In that, it's clearly about closing the innovation and the financial support gaps where federal and provincial funding doesn't exist to deliver support across the entire hydrogen supply chain, so from production to end use, and close those technology gaps so that we can have a successful hydrogen economy and success is both economic and technically feasible. So absolutely, I pick winners. People try to say, "Oh, we don't pick winners." No, I'm actually quite okay with my accountabilities. I do it all the time.

Jon Hagan:

Excellent.

Katie Dean:

This conversation also reminds me of this line that I read in Sara's paper, Industrial Policy in Alberta, and I'm going to read it because it was so good. Sara, you're going to cringe at me [crosstalk 00:16:46].

Heather Campbell:

That's because Sarah is so good.

Katie Dean:

She is so good. Sara says, "Disruption, but without too much prescription, should be the Alberta government's method of choice as it shapes the province's economic future and deals with the twin challenges of diversification and decarbonization." Sara, when I read that in your paper, I was like, "Bingo." This makes sense to me but I would really love to hear you speak more about that and just tell our listeners you mean by it.

Sara Hastings-Simon:

Yeah. I think it comes a little bit to Heather's point that she picks winners and we do exactly need people like her to do that, so providing that strong government support for technologies that allows them to overcome the barriers because we know without that, it simply won't happen. Again, this kind of comes back to that myth again but the idea coming out of the innovator and then turning into some technology or hard pressed to actually come up with any examples of that, but really, this then comes down to the key of, well, how do you do that well and poorly because, of course, there are lots of examples and critics of industrial policy will fairly point out all of the potential and the real examples of wasted money and sort of regulatory capture or rent seeking behavior by industry and others.

Sara Hastings-Simon:

What I think is really more interesting than saying we shouldn't do industrial policy or we should is to focus on how you do that well and this is not an... Nobody from Alberta Innovates paid me to say this, but the idea of a place like Alberta Innovates that goes towards one of the key things that needs to happen in order to have good industrial policy which is that you have to have a state, you have to have a government that has its own competencies and really deep competencies in the technology because the idea is that yes, if you allow the government to play that picking winner's role but the structures are not supported by that direct knowledge, then they're just basically at the whim of going to industry and saying, "Well, what do you think it should be?"

Sara Hastings-Simon:

Obviously, that is not always going to lead to the best long term outcome for the public, but if you have smart scientists and engineers who are able to evaluate different options and make those choices, that's where it's not... You don't have a government that goes into it saying, "This is exactly what we want to do and it's this technology pathway, and this is going to be the thing," but it's really defining what is that challenge. We want to figure out how we're going to decarbonize the industrial sector or some piece of it, how are we going to decarbonize the production of fertilizer, for example, and then goes to the market and goes to industry and says, "Okay, give us all your ideas," and then comes back, and that goes back into government, and the smart scientists and engineers would think government can look at those and say, "Well, let's figure out what we think makes the most sense in which we want to pursue."

Sara Hastings-Simon:

That's what good industrial policy looks like and that's really what that means around that support without prescription. You're not overprescribing to industry but you're also not simply taking what they give you as the right option. Again, it comes back frankly to those different tools that I mentioned as well, too. Those are ways also, aside from having this very competent government division that can be evaluating options, but then it's also about using smart tools to get that done and smart tools that share the risk and reward, right? So, things like offtake contracts, things that provide some sort of guaranteed level of revenue for a company, for an investor, so that they're able to make that investment, but if the public is taking on the downside risk of something not working, then they can also be taking on some of that upside opportunity.

Sara Hastings-Simon:

So, they're really acting more like an investor if you want but an investor that doesn't have exactly the same profile as a private investor who's trying to maximize their own return. When it comes to innovation, one of the challenges there is that often the return that is generated by an individual company, they can't capture all of that. They generate some knowledge that benefits others, or they're doing something that provides a benefit that they're not able to monetize, and so government, as an investor, can play this other kind of role that is missing from the innovation system.

Heather Campbell:

It's Alberta Innovates as convener. I know we're supposed to be talking about hydrogen, and now we're tuning into the Alberta Innovates commercial, but-

Katie Dean:

Shameless plug. Yes.

Heather Campbell:

... it's important to say that, that multi-pronged approach that Alberta Innovates takes through investments and connections and technical expertise and applied research services, we support that innovation agenda and create those pathways that help accelerate that research and innovation to market and everyday customers. That's what picking winners is and it's okay to do that. We talk about our relationship with Emissions Reductions Alberta, and the fact that we are able to have that trusted partnership with them, they take those technologies forward and help commercialize them, and we talk about things like shovel ready. That's what that means and making that tangible and accessible for Albertans. I don't know that we do the best job at using language that they understand, but that's a problem engineers have had since the beginning of time.

Heather Campbell:

I think about as a convener, and although we're talking about hydrogen, CCUS falls into that space because it is the vehicle by which we obtain some of that low carbon intensity from hydrogen produced through small steam methane and reformers. When we're talking about the color scheme, it's the blue, and I don't ever want to talk about the color scheme ever again, but when going right to CCUS, if you think about it, Alberta innovates in all of our predecessor organizations across our hundred years of doing exactly what we do. We've been doing work in CCUS in some form or another for about the better part of 40 to 50 years. You don't get to be in a position where you can actually say CCUS is a viable vehicle for decarbonization of this sector without that credibility, that research, and that volume and quantity of knowledge, expertise, and ability to say, "This technology? Awesome. This technology? Not so cool."

Katie Dean:

If you are interested in learning more about clean technology and our pathway to net zero, you should join us at Inventures, live in Calgary, June 1st to 3rd. Early bird pricing is available until March 31st. Visit inventurescanada.com.

Jon Hagan:

Now, when we think about credibility and the experience we've had in this field, what sort of pickup are you seeing from industry? What's their appetite? You're dealing with an entrenched infrastructure, everything. It's all there for them in a certain field sector. What's the appetite like with hydrogen and all of these things we're talking about?

Heather Campbell:

It's the best thing since sliced bread. [crosstalk 00:24:36] We have the knowledge base particularly in Alberta. When you think about areas like the Industrial Heartland, you have a skillset that with, I'm going to say, help from folks like advanced ed on transformation of the workforce and not re-skilling, but maybe it is re-skilling, but re-skilling those folks to be in a hydrogen economy. There's this idea where transformation seems to infer that someone is left behind. No. There's enough space at the table, and there's enough space in the energy field, and there's enough space in the hydrogen economy for everyone. It's always about yes and no one needs to be left behind. It's just finding a new role.

Katie Dean:

Sara, you call this a local incumbent, right? That is our current oil and gas industry that is currently exists in our market. We're not taking over that local incumbent. That's what you're trying to say, right?

Sara Hastings-Simon:

Yeah. Some of my recent work kind of looks at, and again, it's kind of this fine line that I think we have to walk in terms of certainly there are... We're talking about hydrogen. There's technologies like hydrogen where there is an opportunity for an incumbent industry to basically grow into that space, right? So, if we increase the use of hydrogen, and therefore, especially if it's produced from natural gas, increase the use of natural gas, that is a new market for our natural gas. Obviously, that's attractive and I think that's reflected in this embrace that you've seen of hydrogen from the local players. As I said, I think it's clear that there is a role for hydrogen. There's a role for hydrogen, frankly, in our economy today, and there is one in a role for it in decarbonization.

Sara Hastings-Simon:

I think where one has to be careful is that we don't, as a province, overestimate the size of that ultimate role and that we don't neglect other things that we need to be doing. That's where this idea, some of my work looking at kind of what is the shape of these missions or this industrial policy that's get set by government and regions. It's obviously very informed by incumbents. That's unsurprising, but in particular that if you look at it through this lens of does the new innovation add to or subtract from the market share that they have, you find and it's always hard to a proven negative, but I haven't been able to find any examples of industrial policy or mission innovation where the stated mission or target was actually directly threatening a local incumbency.

Sara Hastings-Simon:

Some of this thinking came out of, you mentioned before that work that I did on a Austrian on the history of the oil sands, and there's even evidence that the conventional oil industry of the day back in the '70s before the oil sands industry was the dominant industry within the sector, that they were really against the development of the oil sands. Now, not everybody because there were some parts of the industry that saw an opportunity there, but there were actually rules and provincial level laws about limiting the production of oil sands, and in particular, limiting it, and this was directly stated, limiting it to ensure that it did not compete with the conventional oil sands because actually we had a pipeline. If you can believe it, we had a pipeline capacity issue back then just proving that there is nothing new in the world.

Sara Hastings-Simon:

So, I say all that because I think where I am sometimes, if I look at the portfolio at a very high level, the portfolio of innovation within the province of Alberta and even within Canada where I sometimes do have concern is that we are embracing these opportunities to grow that market share very much, but we are turning a blind eye or ignoring or not fully grappling with the other piece of that, which is technologies that are going to be needed that are already developing elsewhere for electrification and other pathways to reduce emissions that are a direct threat, obviously, to the current production of oil and gas, and so that we're not either on not even an innovation policy but just an overall policy perspective, we're not sufficiently grappling with what that means and that we're not sufficiently investing into some of those areas for innovation development.

Katie Dean:

Yeah, so we're not just soaring one market to create another market. There's plenty of room at the table here, and that's exactly what Kirk from Sefer in a previous podcast said too. I'm glad to see that we're all on the same page here, but Heather, you're nodding vigorously again so I'm going to turn it over to you. I feel like you have something to say.

Heather Campbell:

Sarah made just an absolutely brilliant point about the incumbency factor and an example just very practically about how we need to think about this and how this issue comes up. One of the issues that we're working through is from a technology perspective, can we geologically store hydrogen in our geological storage? So, caverns, aquifers, seems all of that space. We've also explored as a province the geological storage of CO2. We currently store NGLs, natural gas liquids, and other, ethane, propane, ethylene in brine caverns, particularly in Ontario, in our geological storage spaces, so do you now create a market for geological storage of energy products because that's now a competitive thing. The way that our legislation and our policies work, we wrote those when we only contemplated one or two things, not this entire marketplace of potential geological storage options.

Jon Hagan:

Holy cow. So, it's like a value add, and yeah, and other opportunity. We've talked about the federal involvement and the provincial involvement and how there's two strategies that are integrated somewhat. Talk to me a little bit about local jurisdictions. What do cities, what do towns, what role do they play in all of this?

Heather Campbell:

Well, maybe I'll talk a little bit about hythane and work that's happening and that's happened globally. We look at residential and commercial heating with natural gas, and globally, we have something happening called hythane where you actually take a percentage of hydrogen and blend that into your natural gas, and that actually goes into your residential and commercial heating, so heat for your home, and being able to adjust your systems. That's all municipally happening globally. What would that look like in Alberta? So, you would have organizations like your Enmax and ATCOs and Fortis, and others who provide energy directly to homes being able to have access to both the technology to do that and the decarbonization opportunity that comes with that for supply of natural gas. Of course, distribution of natural gas is a provincial issue where there's an actual policy and legislation in place that has to be altered.

Heather Campbell:

You have to make sure that your pipeline systems are in place, so now you're looking at a technical CSA standard and a regulatory framework to make sure that you have the technical pieces in place to deal with pipeline and embrittlement, and all of those pieces that an organization like a Sefer would absolutely have expertise in being able to advise on for that matter. We have folks from Sefer who sit on those CSA type committees, but there are a number of pieces that fit into it. There's a market and use, of course, hydrogen fuel cells. I personally drive an EV, so does Sara because we're cool like that, but it would be awesome to be able to now be looking at hydrogen fueled vehicles and hydrogen fueled buses. Transit is a fundamental issue within municipalities, heavy duty transportation. There's so many things.

Jon Hagan:

20 or 30 years ago, maybe my time frame's off, there was a company out of Vancouver that was talking about-

Heather Campbell:

Ballard?

Jon Hagan:

Ballard. That's right. What happened there? Are they still around?

Heather Campbell:

They're still there.

Jon Hagan:

It was in the news. It was maybe not as much as hydrogen is in the news now, but let's talk about the older generation, I'm pointing at myself here who's going... Old man's [inaudible 00:34:34] cloud.

Heather Campbell:

[crosstalk 00:34:36]

Jon Hagan:

Here's hydrogen again. I've heard this story before. What do you say to that?

Sara Hastings-Simon:

I would say I think that's like you can almost say that about every technology that comes into the market, all kinds of things, obviously, that we've seen as far as technological advances even outside of the energy space when it comes to IT and information and sending videos that you can watch at home over the internet. That was once a crazy idea and people would promise that and then it didn't really come through and stuff. We know that there are these very well known hype cycles around new technologies and many of them sort of fizzle out a few times before they actually get going in a major way, so I think that's one part of what's happening with the hydrogen story. I think when it comes to, again, this is where I come back to that hydrogen as a Swiss army knife versus hydrogen as the, I don't know how to finish that analogy, but as the right screwdriver for the job or something.

Jon Hagan:

The break of Panacea for...

Sara Hastings-Simon:

There's something there. I got to workshop that one, but that same thing is true. You have, again, all of these different competing technology pathways, so when it comes to, for example, personal vehicles, there was a time at which lithium ion batteries were, well, frankly, not even invented and that they were invented, but they were way too expensive and had way too little energy density and charging them took way too long. So, if you looked at the technological field at that point, it was reasonable to say that it's something like hydrogen for our personal vehicle was really maybe neck and neck or at the same starting point of the race with electrification.

Sara Hastings-Simon:

Then of course, as technologies move forwards, some of them progress faster than others for all kinds of different reasons. Sometimes, it's technological challenges. Sometimes it's actually, I think often it's actually being able to piggyback and scale up on the back of another kind of use, right? So, not to take us too far off, but with the battery example, I think batteries have definitely benefited from all of the effort that's gone into make batteries so that this phone that I'm holding can last for a whole day, and that then also those advances translated into the car that I can now drive or the e-bike that I can now ride.

Sara Hastings-Simon:

Anyway, I say all of that just to say, I think, again, when it comes to the hydrogen story, there are pathways or uses for hydrogen where it looks like it's coming out as one of the winning options or at least still very much in the race. Then there are others where I think that it is I think pretty much now within the personal vehicle side, companies, even those like Toyota who were quite bullish on hydrogen have sort of said, "Okay, that's not... It's going to be the batteries that went out there." There are other sectors where it's very clear that hydrogen is going to be a winner, and some of those input, especially for things like fertilizers and stuff, that's really more or less what you need. There's not another lot of other options, but again, I think it's important from an industrial policy perspective that we focus on those areas that have the high likelihood of success and that in that middle area as well, that we're sure to also pursue some of those other options.

Sara Hastings-Simon:

My own view on heating, for example, that's one where, yes, in Alberta where it is cold, electrification is harder for sure than another places, but it's one that is converting an entire domestic natural gas system to hydrogen and all of that all the way into that home also presents its challenges too. So, I think that's another one where really good industrial policy kind of makes sure to be working on parallel pathways but then also to be ready to pull the plug when it's clear that a pathway is winning over a different pathway.

Jon Hagan:

Right.

Heather Campbell:

That's picking winners. I think maybe between Sara and I, we can give you every example of technologies that have taken all the time. You remember solar panels? In the '70s, we had the technology for that but it is our industrial policy, i.e., climate change goals and climate change mitigation goals, that have stimulated our need to invest in acceleration of those technologies, and now, they're experiencing exponential growth because they're economic. Sara and I can drive our EVs because they're economic.

Jon Hagan:

When you talk about EVs and we talk in the context of net zero, and this is just a total complete aside, but there's energy we're required to build these vehicles. They don't come without a footprint, so this makes me think-

Heather Campbell:

You're wanting me to do a life cycle analysis for you right now?

Jon Hagan:

Not right now.

Katie Dean:

Later.

Jon Hagan:

No, what it makes me think of is I've heard that argument a lot from people who, on the one side, they don't appreciate that technology. The argument is, well, there's a footprint there, it takes mining to get lithium, yada, yada, yada. The importance of establishing the narrative, and we started our conversation off talking about a myth, that capital and myth, so the role we all play in developing the truth narrative and this is what it is. This is just hitting me as our conversation goes on. There's lots of myths that we need to dispel as we move forward in this.

Katie Dean:

Yeah. One of the phrases I really liked that, Sara, you just said was a hype cycle. It got me thinking about, in Alberta right now, we have three or four hydrogen conferences happening this spring. Not this year. This spring. So, my question is, is hydrogen, are we in a hype cycle with hydrogen, or do you see that it is actually going to scale in, we're actually going to see a market out of it?

Sara Hastings-Simon:

Yeah, I don't think those two things are, to me, it's not an either or. A hype cycle often does, then doesn't always, but it often proceeds the real establishment of a market, but it's sort of this, as you can't see, my hand waving on a podcast, but it's this hype cycle of there's a lot of excitement about it. You don't actually reach that level of deployment or that level of whatever it is, but it doesn't drop back to zero. Then you have sort of the slog of actually doing the work to get the things done. So, I think that hype cycle has that element to it, and I think part of that is similar actually with the myths.

Sara Hastings-Simon:

All of it come... It does tie back to, in some cases, there is a real information gap. In the case at EVs, we know that the footprint, even with the grid that we have in Alberta today and even when you produce the vehicles, the footprint is lower. We also know that there can be alternatives as well, too, and thinking more broadly about transition not just from internal combustion engine cars to EV cars but also other ways to reduce our transportation emissions is important. Some portion of that comes from a true information gap, but I think we should also acknowledge as with the hype cycle, as with the myths, some portion of that comes from intentional desires to shape the conversation in a certain way because that suits somebody's economic interests.

Sara Hastings-Simon:

I think that's, for me, honestly, as a scientist who's moved into more of a kind of science but with some influence of social science space, that was a real learning experience that I went through in my own career where you sort of at first like, "Oh, well, we just need to be clear on what the facts are and then that will all make sense." I think that has an important element in technological development and in the adoption of new technologies, too, that it's not just about the technology itself and can you make the engineering or even the economics behind it work, but there's all these other pieces that influence whether or not technologies get adopted.

Heather Campbell:

We've put our sustainability as a priority, and that's driven and hopefully will continue to drive our behaviors and our policy ideology.

Katie Dean:

Great word phrase there. Going back to our million conferences that we have this spring alone on hydrogen, Heather, I happen to know that you are involved in at least one of them. Do you want to talk about that?

Heather Campbell:

Sure, because after I finished recording this particular podcast, I actually have to score the abstracts for the technical session.

Katie Dean:

Great.

Heather Campbell:

We have the Canadian Hydrogen Convention happening in April in Edmonton. It's the first that we're looking to run as a clear body of both technical and policy and market. There were industry members who will be speaking on the full range of topics with respect to hydrogen. I will be moderating a panel on CCUS as part of a clean hydrogen economy. It's the very, very last panel of the entire conference, so by that point, I'm sure everyone will have packed up their luggage and they'll have it at the side of the convention center, but they won't be necessarily waiting for me in my very cute shoes to be speaking about hydrogen and CCUS because I know it's stimulating. Then there is a technical session as well that go across all of the areas that the supply chain areas I spoke about earlier, so production, transportation, distribution, carrier storage, market end use.

Heather Campbell:

There's a regulatory section, so speaking to some of those codes and standards and regulations that are required to actually deliver a hydrogen economy. We don't want to leave the regulatory and the market innovation behind when we do the technical innovation. Those three need to move in concert together and create a beautiful harmony that we can actually deliver and call a hydrogen economy for Alberta. That's happening in April so encourage folks to participate. There are site tours, I believe, on the third day into the Industrial Heartland where folks can see some of the existing projects, some of the developing projects, and get a tangible feel for what a hydrogen economy looks like.

Katie Dean:

Our last shameless plug of the day is going to be for Inventures happening June 1st to 3rd in sunny Calgary, Alberta. Thank you, Heather and Sara. This was excellent and we look forward to seeing you at the Hydrogen Conference as well as at Inventures. Heather, I look forward to seeing your really cool shoes. That's going to be the best part for me.

Jon Hagan:

Does that mean I have to wear cool shoes too? Because I'm going to have to go and buy some.

Katie Dean:

Cool shoes is the-

Heather Campbell:

All the time.

Katie Dean:

Yeah, it's in the fine print of Inventures.

Heather Campbell:

It's part of the deal.

Katie Dean:

Yeah.

Jon Hagan:

You know what? I know that sounded like we should end it there, but I think I just want to give the final word to Sara about another podcast that she thinks may be informative.

Sara Hastings-Simon:

Yeah. Thank you, John. I feel like, like half of the population, I also started a podcast during the pandemic. It's called Energy vs Climate. Yeah, it's been fun. That's with the David Keith and Ed Whittingham, and we look at all kinds of different, the shifting energy landscape, and what that means in particular for Calgary in Alberta. You can find that where wherever you listen to podcasts or energyvsclimate.com. We actually did an episode on hydrogen back, I think, last year or two, so you can listen to some more debate there.

Jon Hagan:

Excellent. Both of you, thank you so much. This is a fascinating topic and I want to learn more. I'm going to be at this convention touring around and checking out shoes.

Heather Campbell:

Heather talks hydrogen. It's a line. You could put it on a poster.

Katie Dean:

Cool.

Jon Hagan:

Thank you so much for your time. You too.

Sara Hastings-Simon:

Thanks.

Katie Dean:

Thanks for tuning in. For more Shift content, visit shift.albertainnovates.ca.