As the magic ingredient for turning molasses-like bitumen from the oil sands into premium light crude, “hydrogen is critical for Alberta,” Ian Potter of the Alberta Research Council said today at a conference in Calgary.

“Of $135 billion in announced projects, hydrogen is a significant part,” added Doug James, director of alternate and renewable energy for EnergyINet, a federal non-profit corporation working with industry and provincial agencies on technical innovation.

To reach current oilsands production of about one million barrels per day, the industry built hydrogen plants with output of 770,000 tonnes per year. By the time oilsands flows are forecast at least to triple to three million barrels daily or more in 2020, annual Alberta hydrogen output is projected to swell to 2.8 million tones, Potter and James indicated.

“Upgrader” plants saturate bitumen with hydrogen. The injections transform the molasses-like initial oilsands product into light synthetic crude that fetches premium prices as a replacement for dwindling reserves of conventional black gold. The hydrogen is extracted from natural gas or bitumen.

It is only natural that industrial uses for hydrogen are evolving faster than consumer products even though energy forecasters have predicted switches to the zero-emissions light gas for more than two decades, specialists in the field told a Calgary workshop held by EnergyINet and the Canadian Hydrogen Association.

Costs of industrial hydrogen plants are measured in hundreds of millions of dollars. But investments required even to make a start on switching consumer markets over to hydrogen from fossil fuels are measured in billions.

Converting only one in every 10 of the 315,000 gas stations in North America and Europe into hydrogen refueling sites would cost about $16 billion, said Bob Cassidy of Air Liquide Canada Inc., an arm of a French industrial gases conglomerate with extensive Alberta operations. Even that astronomical estimate covers only the expenses of developing hydrogen distribution, storage and dispensing systems in the best and busiest retail markets. The projection does not include costs of land and buildings for new fueling sites that would be required for long-distance travel by hydrogen vehicles.

There is still controversy among specialists over whether hydrogen can ever become a mass-market retail fuel, Cassidy said. Increased use of the element to extend the life of fossil fuels, or the approached pioneered on a large scale in the Alberta oilsands, could turn out to be more efficient and economical.

Consumer uses of hydrogen remain limited to small field trials in Europe and experiments with tiny handfuls of public transit vehicles in Canada, such as a showpiece called H2 Highway planned for the 2010 Winter Olympics in Vancouver. 

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